What Happened To GAME?

It all seems oddly rhetorical now, of course, given what we know about the GAME Group.  The situation seems to be that they’re struggling a bit – publishers are losing confidence, they’ve lost their handy sale-or-return policy with key suppliers and anecdotal (and largely unverified) evidence floating around the net this week suggests some employees were paid late recently.

Naturally, all this is difficult to quantise and without key facts from the company there’s a lot of speculation abound, but the story starts to tell a sorry tale whichever way you look at all this.  There’s some resolution at the end of all this, of course, and nobody really expects the group to suddenly vanish from the high street, but the road might not be quite as smooth as everyone would like.

Founded in 1991, GAME started off fairly small, the oddly named Rhino Group expanding to 77 stores when they took over Virgin Games two years later.  Another 48 months on and what was then Electronics Boutique Limited bought 25% of the company, rebranding the stores (which were then Future Zone) as Electronics Boutique, a name that still rings strong for some as representing knowledgeable staff and a wide range of products.

It's a familiar sight for gamers, but one that's slowly moved away from focusing on new titles.

It wasn’t until 1999, when Electronics Boutique bought out a range of stores called Game that the group was formed as it is now.  Founded in 1990, Game had 86 stores of its own.  Further expansion (BarrysWorld, ScoreGames and Centro Mail) happened in 2001, and EB quickly became a force to be reckoned with, before rebranding as GAME a year later.

The GameStation buy-out happened in 2007, but not before GAME gobbled up GamePlay and GamesWizards, leaving GAME pretty much the only high street national at that stage that concentrated on new titles.  Altogether the brand has around 1,300 stores at the moment, and continues to trade from its main website (alongside the rather more specialist looking GamePlay site).

In March last year, though, things started to slow.  As the average consumer started to wise up to what the core gamers had been saying for years – that cheaper deals could be had online – GAME’s once ready market wasn’t quite as enthusiastic.  And on top of this, many retailers new to the industry (which, for better or worse, includes the supermarkets) started offering trade-in deals, something the specialists like GAME once had all to themselves.

This, as you’d expect, made a massive difference to GAME.  Asda, for example, can give arguably better trade-in prices than the specialist does depending on the game (obviously it’s worth shopping around) and I’d suspect they’re not alone.  And if the average shopper picking up their weekly groceries can also nip into the electronics section of the supermarket and grab the same games that GAME are offering, and usually cheaper, then why would the same person make the trip to the high street to go to a dedicated store?

Of course, in days gone by, that same specialist would be able to impart knowledge, information, unbiased facts and perhaps even some friendly small-talk as you handed over your cash.  Admittedly, you’re still going to get the most from staff from a dedicated games retailer, and I know a few employees that pour their hearts into their jobs, but is this still widely the case?

What’s particularly noticeable, though, is the way the stock has slowly changed within GAME branches.  What was once racks and racks of new titles is now a much smaller area, with the lion’s share handed over to pre-owned games, some times considerably so.  If GAME are doing this, then they’re only really stocking a small subsection of each platform’s games new, and in some cases just what constitutes the retailer’s own top twenty titles.

Downloadable titles, too, has no doubt had an effect.  Steam has revolutionised the way PC games are bought and played, and who knows what’ll happen when the Vita appears, where every game you can buy on cartridge will also be available over the PSN, a service that GAME won’t see a penny of unless you buy your credit for the Network on a pre-paid card from one of their branches.

GAME, you may argue, has failed to evolve as the industry has.

The Vita is a new hardware launch that GAME are confident will still be a feature of the group. Many have pre-ordered with them.

News this week hasn’t been particularly fair on GAME, with some misreporting and conclusions unfairly jumped to, but what remains is a series of articles suggesting the group is struggling.  They’re no doubt not alone, but clearly a large target, and are only just admitting to their problems.  Indeed, only in the last few hours has the board commented officially.

News first broke yesterday when it emerged that the group had lost certain insurances from publishers (with some speculating this included Konami and possibly EA) and meant that the normally safe sale-or-return scheme (where GAME could just send back any unsold games) had been removed.  GAME, basically, had to foot the bill upfront.  This, in turn, meant that there were rumours new releases wouldn’t be available this week, but that appears to have been smoothed over.

MCV, a bastion of balanced viewpoints (at least in this particular case) reports this evening that the owners have “concluded discussions with its lending syndicate and agreed revised terms for its facilities” and whilst GAME are now having to “‘operate within lower limits of its existing facilities than was previously available” it does mean they’ve been given a lifeline.

They’ll continue to trade, basically, although this is going to be off the back of an £18m loss before tax for the year to the end of January.  ”We’re pleased to reach agreement with our lenders, but should be under no illusions about the challenges in our market or the hard work that is required to deliver our strategic plan,” said CEO Ian Shepherd.

There’ll be an update to the group’s strategic plans, too, which may involve the selling off of GAME’s international businesses, which currently relates to approximately 50% of the branches.

Whilst it’s apparently fashionable to think that the industry would be better off without GAME, that’s largely not the case.  The supermarkets might be cheaper now, but that’s because they’re competing for the market against GAME who hold as the last real specialist high street presence, and whilst the indies might temporarily thrive if they were left without the likes of GAME around the corner, who knows what might happen if they vanished?

I do wish GAME well, I might not shop in there as often as I once did, but that’s largely a change in my own circumstances rather than anything particularly directed at the retailer.  I do like to go in and browse, though, and seriously can’t imagine not having that option. The group might not be in top form right now, but publishers and gamers alike need them – heck, the industry needs them – and hopefully they can come through this in a much stronger position.