Game & Gamestation: GAME credit woes

[Digfox]

After initially thinking GAME were well and truly screwed, after speaking to certain people in the know, apparently the situation is not as bad as some websites are making it out to be.

Yes, GAME are in some trouble, but I wouldn't expect them to close down in the next week or so. As the MCV story states, just don't expect them to have loads of stock for new releases for a while.

But this could be the beginning of a the end, or at least until they secure some more money like HMV did and somehow ride it out.

I used to work p/t for EB so I've seen the changing nature of the group and feel sad because I still know a good friend who works there. Whilst I wouldn't wish this on anyone, I don't believe the consumer or industry would miss GAME in it's current guise.

Shame because I think they have some strengths and I'd suggest; Close down a load of stores, tidy up the website but I think the web link to the stores is a strength, allow stores to fight on price on the ticket, give individual stores the ability to price and sell second-hand at their choice and stop centralised pricing, keep the good work on CE/SE/version exclusives and get more, separate the website business, do some rebranding, and try and find some USP again....something, anything, but not this horrible place it's become. Oh and get new stock levels back up again.

Maybe this is just nostalgia because the store I worked in the late nighties was a very different place.

[CMcK]

Poor game, they only made ?23 million before tax last year!

http://www.investis.com/gmg_plc/reports/2011/annual-report-2010-2011.pdf

Quite an interesting read here, you can see that GAME are expecting a new wave of consoles in the next 18 months or so.
You can see they are also very proud of reducing their operating costs by ?13.7million, that'll be all the store closures.

Which sounds like a reasonable sum of money until you look at the capital they have to borrow every year to run the business and return on investment it yeilded to the lenders. ?15million profit on turnover of over ?1.5 Billion! Gross margins are good but the net margains are a different matter altogether.

I have a friend that works for Game and I have been warning him for ages to get out of there. All the talk of new systems is going to hit sales of current systems hard and I cannot see the Vita and Wii U helping enough.

[ezee ryder]

But this could be the beginning of a the end, or at least until they secure some more money like HMV did and somehow ride it out.

I used to work p/t for EB so I've seen the changing nature of the group and feel sad because I still know a good friend who works there. Whilst I wouldn't wish this on anyone, I don't believe the consumer or industry would miss GAME in it's current guise.

Shame because I think they have some strengths and I'd suggest; Close down a load of stores, tidy up the website but I think the web link to the stores is a strength, allow stores to fight on price on the ticket, give individual stores the ability to price and sell second-hand at their choice and stop centralised pricing, keep the good work on CE/SE/version exclusives and get more, separate the website business, do some rebranding, and try and find some USP again....something, anything, but not this horrible place it's become. Oh and get new stock levels back up again.

Maybe this is just nostalgia because the store I worked in the late nighties was a very different place.

You're right, it could be the beginning of the end, but that end (as I understand it) is quite far away at the moment.

I worked at Gamestation for a good four years before the GAME takeover, and (similar to your EB situation) slowly but surely there was a change in the way the business was run. I left the company shortly after and the takeover played a massive part in that.

Personal feelings aside, I think GAME closing down would do the industry more harm than good to be honest. A high street retail presence is needed and (like it or not) the GAME group has the biggest one when it comes to specialist video game stores.

This little "crisis" just shows that they need to get their finances in order, and sort out the day-to-day operation of the business. A bit of a wake up call if they ever needed one.

[EvilBoris]

It will probably just put more of an incentive for them to sell new release games at RRP.

[elaniel]

Shame for all the people who work for them if they do go under, but they have been poorly managed by the higher-ups. IIRC, Gamestop in the USA has been doing better and better each year, so it's not entirely down to the digital/online market in my opinion that has caused this. It's simply down to GAME not being competitive either online or in store and seem to rely on limited exclusive editions to boost their sales.

I do have a large trade-in card from Game, so I hope I get the games I want, up to and including ME3 Collectors Edition. After that, I probably won't risk doing a trade-in card again just in case. I also will be wary to buy limited versions from them as well if another store stocks it as well I'll go there (to ensure my order)

[ezee ryder]

It will probably just put more of an incentive for them to sell new release games at RRP.

Yup, expect this to happen. Maybe not full RRP, but close enough to it, especially in-store.

[Digfox]

Personal feelings aside, I think GAME closing down would do the industry more harm than good to be honest. A high street retail presence is needed and (like it or not) the GAME group has the biggest one when it comes to specialist video game stores.

Maybe, and absolutely I get it's better to have a high street presence. But part of me would hope something else would spring up in it's place (either some stores bought from the administrator or independents) that would actually be worth shopping in.

[Adrock]

GAME has been outdone by the supermarkets. They do not offer anything unique at all, maybe if they eventually do close down there will be space for shops to compete and offer niche titles and a wider array of older releases. GAME was aimed at maintaining a shop front that adults buying games for kids would happily use, that again has been taken by supermarkets.

A shop that sold some of the excellent gaming paraphernalia you can find online would be perfect for people who enjoy gaming as their hobby.

[averybluemonkey]

Without a major nationwide high-street presence sales will fall, how much is debatable but you lose out on a lot of impulse buying and purchasing. The supermarkets only stock the biggest titles out there. I don't see how any shrinkage of the market can be a good thing. It's all very well saying online retailers supercede them but not everyone shops that way or wants to shop that way.

[Flabio]

EA chime in, saying they're concerned their own financials are under threat from 'difficulties experienced by a major european retail partner'.

http://www.eurogamer.net/articles/2012-02-01-ea-concerned-at-financial-health-of-major-european-retail-partner

[EvilBoris]

It must be a worry, having a retailer that may of bought 800,000 copies of your games in previous year not in a situation to be able to purchase as much or any stock.

[Flabio]

Especially as so many publishers have been using the GAME group as 'exclusive' partners for their proft margin rich special editions. (GAME shipped my SE of Soul Calibur 5 this morning apparently, so they're not dead yet...)

[Neon Ignition]

I suppose the big worry as well is despite GAME's push of second hand games they're not actually that big of a player in them compared to shops that pretty much run off such sales like CEX and if GAME goes under more people will turn to second hand sales as CEX etc will be the biggest presence.

[djtickle]

As much as I dont buy games from GAME I cant help but feel a little sad as Ive always got "New" consoles from them. Going down to my local store in Bolton at midnight to pick them up has always been ace. I can never fault them either on hardware warranty. I hope this is enough of a kick in the balls for them to sort themselves out!!

[Skull Commander]

Game group have made their own bed. They have not only ruined the Game side of the business, but also the Gamestation side. Despite making promises of no layoffs or mergers when they took over, they have slowly backtracked on every aspect of this. People were forced out the business by having their contracts reduced to a bare minimum and they have been shifting managers and staff between Game and Gamestation stores without giving them any say in the matter, often against their will. Certainly with people I know in a few stores morale is at an all time low, which certainly is not going to be helping rejuvenate the stores in their time of need.