Close
Report Comment to a Moderator Our Moderators review all comments for abusive and offensive language, and ensure comments are from Verified Users only.
Please report a comment only if you feel it requires our urgent attention.
I understand, report it. Cancel

Retail

GAME heads for administration, hopes to continue trading

GAME heads for administration, hopes to continue trading

Wed 21 Mar 2012 7:37am GMT / 3:37am EDT / 12:37am PDT
BusinessRetail

UPDATE: After weeks of uncertainty, retailer admits "there is no equity value left in the Group" as it files for administration

UK specialist retailer The Game Group has today admitted it is heading for administration after failing to secure financing during weeks of uncertainty.

Earlier today it voluntarily suspended trading on the London Stock Exchange, and as it seeks out an administration partner hopes that it can continue to trade in the short term.

"Further to this morning's announcement of the suspension of trading in shares of GAME Group plc, the board has concluded that its discussions with all stakeholders and other parties have not made sufficient progress in the time available to offer a realistic prospect for a solvent solution for the business," said the company.

Discussions with all stakeholders and other parties have not made sufficient progress in the time available to offer a realistic prospect for a solvent solution for the business.

The Game Group

"The board has therefore today filed a notice of intention to appoint an administrator. In the short term the Board's intention is that the business will continue to trade and discussions with lenders and third parties will continue under the protection of the interim moratorium."

Earlier in the day it admitted that the company no longer has value. It is saddled with over 180 million worth of debt with rent and wage payments due this month.

"The Board now considers itself to be unable to assess the business's financial position, and is of the opinion that there is no equity value left in the Group," said the company.

The company has over 600 stories in the UK alone, trading under the GAME and Gamestation brands, and it's now expected that at least half of those are to close. There has been talk of multiple rescue packages, with Hilco showing interest in the group's international stores in Spain and Australia, and Rothschild being appointed to seek a buyer for the whole company.

US retailer GameStop has also been seen as a likely candidate for the business as it lacks a High Street presence in the UK, although recent reports by the FT suggest it has not show any recent interest in the business.

Since Christmas suppliers have been unwilling to commit stock to the retail chain, with major publishers such as Electronic Arts pulling support forcing the retailer to cancel pre-orders and refund customers.

While the traditional publishing community has tried to help the struggling retailer, many in the digital space have been less sympathetic to the crisis, with some even suggesting the group has brought problems on itself by putting an emphasis on selling pre-owned stock and using its size to bully the market.

The fate of the business will now be put in the hands of an administrator, thought to be PriceWaterHouse Coopers, with The Game Group hoping for a pre-pack administration deal.

29 Comments

robert troughton UK General Manager, Epic Games

222 96 0.4
Suspendeds?

Posted:2 years ago

#1

Bruce Everiss Marketing Consultant

1,692 594 0.4
Damn. Just as I was going to buy some of their shares :-)

Not many tears will be shed in game publishing at their demise. Their aggressive pursuit of the secondhand market cost publishing a fortune and stifled game development. They massively harmed the industry they lived off the back of.

Meanwhile they failed to monetize their footfall in a sustainable manner. The market moved, over several years, and they failed to move with it. They did not capitalise on their strategic advantages. So their downfall is self inflicted.

Posted:2 years ago

#2

Matt Martin Editor, GamesIndustry.biz

173 113 0.7
Sorry about the typo. Developing news needs quick updates and I was a little clumsy.

Posted:2 years ago

#3

Luke Salvoni Co-Founder & iOS Developer, Officially Made Ltd

65 4 0.1
US Rvial?

EDIT: Well that was a sneaky edit, Ed!

Edited 1 times. Last edit by Luke Salvoni on 21st March 2012 9:41pm

Posted:2 years ago

#4
Guess we better look at real long term alternatives for our 2012 games.

Where do folks go to normally?

Posted:2 years ago

#5

Richard Westmoreland Game Desginer, Exient Ltd

138 90 0.7
The internet ;-)

Posted:2 years ago

#6

Morville O'Driscoll Blogger & Critic

1,590 1,446 0.9
Amazon, Play.com, Steam. Maybe HMV on the High Street? I was in the local one yesterday, and they were moving some of their video-game shelves around, but not sure why or what-for.

Posted:2 years ago

#7

Matt Martin Editor, GamesIndustry.biz

173 113 0.7
HMV stores are stocking a lot more games with greater variety from what we can see. Looks like HMV is getting a lot more publisher support. Whether that helps in the long term I'm not sure but for now it's the place to be for new and pre-owned releases.

Will be interesting to see how supermarkets react to this. Will they no longer use games as a loss leader?

Posted:2 years ago

#8
@ Morville - maybe to allocate more/less stock from those allocated to Game. Gotta say HMV has higher chance of survival due to havign a finger in every pie and diversification, allowing the casual consumer to pop in and pick up something....

Posted:2 years ago

#9

Matthew Handrahan Staff Writer, GamesIndustry.biz

124 114 0.9
I've been using HMV, and I have to say that it felt almost identical to the experience shopping at GAME. There was a healthy second-hand section, while the new releases were largely limited to the top 20. The closure of GAME is a gilt-edged opportunity for HMV to step in and create a more sustainable approach to video game retail, while also giving the public a recognisable brand to associate with buying games.

Obviously, the number of people with jobs on the line is difficult to bear, but the notion that the end of GAME is the end of gaming's presence on the high-street is questionable. Indeed, Asda recently held its first midnight launch for Mass Effect 3, and with GAME gone I sincerely doubt it will be the last.

Posted:2 years ago

#10

Fran Mulhern , Recruit3D

863 707 0.8
Game won't disappear. Or, at least, most of those stores won't disappear. They'll be sold off, either to a NewCo or a competitor.

Posted:2 years ago

#11

Matt Martin Editor, GamesIndustry.biz

173 113 0.7
I've updated the story, rewritten for clarity as the story has progressed.

Posted:2 years ago

#12

Patrick Frost QA Project Monitor

400 196 0.5
Would be nice if they could tell the employees rather than waiting for them to find out on the Eurogamer Network or MCV.

Best of luck to all involved, which includes 1 person that got married this week and is expecting a baby.

Posted:2 years ago

#13

Matthew Hill Head of Recruitment, Specialmove

75 26 0.3
@Patrick Frost

I absolutely agree with you it's an awful way to receive news of this nature.

However I believe GAME needs to report is legally obliged to report its decision to the Stock Exchange ahead of anyone else. As a result the media picks up on it very quickly, particularly when most were anticipating this news.

Edited 1 times. Last edit by Matthew Hill on 21st March 2012 12:53pm

Posted:2 years ago

#14
I got out in the nick of time it seems...

Posted:2 years ago

#15

Kingman Cheng Illustrator and Animator

954 183 0.2
Hm just read about them going into administration over at the Guardian.

Good luck to everyone who works there.

Think I'll be sticking to Amazon + Steam.

Posted:2 years ago

#16

James Ingrams Writer

215 85 0.4
It's going. Gamestation is also going exclusively online. So that's 2 retailer's.

The whole retail world and customers seem to be going online. And while there is a certain pride in the media announcing internet sales have increased, I see this as a disaster.

Any industry elusively on-line will drastically see market shrink in my opinion. Any industry that is not in the public eye disappears, for example 30 years ago, in the UK we had plenty of stamp and coin shops and a thriving stamp and coin collecting market amongst young people. As the stores closed, so the hobby shrank. Today we hardly have an stamp and coin shops and hardly any collector's. Many stamp and coin businesses tried to start on the web and all failed. This to me shows how retail space is very important for an industry.

Given that the average internet retail store employes one person for every eight on the high street means huge unemployment in all retail stores is everybody just buys on the internet.

Hard-core gamers will continue to buy online as long as titles are available, but I don;t see those titles being produced for long. This will leave us with indie titles and casual titles. And while some titles will always sell a million, in general, an online only game industry will have just as many unit sales, but at a $10 price-point rather than a $60 price-point that you would see much more of in a retail store. it is unlikely that $60 games will last long in an online games industry.

Posted:2 years ago

#17

Feargus Carroll Producer

23 18 0.8
@ James
That's a lot of sweeping statements and personal opinion dressed up as facts James. I think it's highly disingenuous to link gaming with coin & stamp collecting (thriving? really?).

With the Gen4 consoles no more than 24 months away, I'm surprised you don't "see those (hard-core) titles being produced for long".

And what evidence do you have of a 83% drop in the price of on-line games?

Posted:2 years ago

#18

Siyuan Lin Sound Designer

7 0 0.0
You shouldn't compare a very niche hobby to a massively popular yet not fully explored medium. 30 years ago you didn't have internet. Sure retail section is [hdisadwduw] and unemployment issue raises, but do you not see all these newly emerged internet business through youtube, twitter, etc. There are people making a living out of just talking about games and stream themselves playing games. Hard to imagine that 10 years ago huh?

As for online game prices drop --- majority of the online games are free to play. So how do they make money?? Sorry if I am being too obvious.

Edited 1 times. Last edit by Siyuan Lin on 21st March 2012 5:17pm

Posted:2 years ago

#19

Alec-Ross` Bower Journalist

7 0 0.0
They shot themselves in the foot, but it would be sad to see them go. I almost always buy online, but when I have shopped at GAME or Gamestation I have found the majority of the staff friendly and not over condescending. Plus it was always nice to take a look in the stores when I needed a break from shopping with my girlfriend, will certainly miss that.

When's the going out of business sale? :P

Posted:2 years ago

#20

Andrew Goodchild Studying development, Train2Game

1,254 421 0.3
Did stamp and coin collecting shrink because the shops closed, or did the stores close because the amount of collectors shrank to a point where staying open wasn't sustainable.
If it was the second, (which would be my guess, but I could be wrong) any attempts to revive the hobby online would fail, due to lack of interest. It may be worth noting that the tiescale you gave for those hobbies coincides with the 80s licenced toy boom, and video games and VHS players becoming commonplace, seems young collectors may have found more interesting things to collect.

In terms of new, rather than pre owned games, it seems game have barely more selection than the supermarkets these days, which is pretty tragic for the UK's biggest specialist. So it won't be much harder to pick up the games you want, the popular games will be sold at Tesco, Asda, Sainsbury's, etc even if HMV and blockbuster don't last, the rarer games weren't consistently sold in Game for the last few years anyway.

Posted:2 years ago

#21

James Ingrams Writer

215 85 0.4
It is highly unlikely that gen4 machines will be for hardcore games. That is a supposition on your part,but others have said they'll go for online
casual type games.

Posted:2 years ago

#22

James Ingrams Writer

215 85 0.4
HMV doesn't carry PC games, so console games may go on for a while, but PC games?

Posted:2 years ago

#23

Preet Basson Studying Mathematics with Statistics, University of Portsmouth

92 13 0.1
Retail world wide made one huge mistake. They didnt embrace the internet fast enough, & companies that did are swimming in more money than retail ever made. Examples are eBay, Amazon, Play.com, Apple (due to iTunes), etc the list could go on. How are they going to compete against free delivery on a item, compared to one that you could get there & then but could get cheaper in 1 day later. GAME is going against supermarkets, Amazon & co, etc. If someone like Apple can sell like hot cakes & also keep interest in retail shops, we all have something to learn.

Edited 1 times. Last edit by Preet Basson on 21st March 2012 10:43pm

Posted:2 years ago

#24

Preet Basson Studying Mathematics with Statistics, University of Portsmouth

92 13 0.1
The irony that no game publisher even supports GAME that in itself says something.

Posted:2 years ago

#25

Sanjay Jagmohan Project Monitor (Functionality Team Lead), SEGA Europe

10 0 0.0
I'm a little disappointed about the news. GAME and Gamestation were the few places where you could walk in, find something interesting and walk out. I found a few gems in there too.

I agree with Preetpal in that they didn't utilize their online service as effectively as they should have. While I haven't had any bad experiences with them, many of my friends and colleagues have done. Mainly poor return policies and really slow response times. They should have priced products closer to their competition.

We just have to see what happens from here...

Posted:2 years ago

#26

Morville O'Driscoll Blogger & Critic

1,590 1,446 0.9
@ James

HMV really does sell PC games. You should check things before posting such sweeping statements. :/ (I was in their yesterday, so I should know. They may not sell many, but that's a different matter).

"Hard-core gamers will continue to buy online as long as titles are available, but I don't see those titles being produced for long. This will leave us with indie titles and casual titles."

Hardcore and indie are not mutually exclusive. Look at Super Meat Boy. Dustforce. Dear Esther. Evochron Mercenary. (Why, yes, I do have Steam open, thankyouverymuch. :) ). In fact, it could be argued that indie titles are far more "hardcore" than a lot of mainstream productions, since they are aimed at a specific sub-section of the gaming market, rather than being catch-all titles like Mass Effect or Call of Duty.

Edited 3 times. Last edit by Morville O'Driscoll on 21st March 2012 11:53pm

Posted:2 years ago

#27

Dominic Jakube Student

92 13 0.1
I think that the fact that the UK the worlds 3rd biggest market for games cant support a nationial dedicated games store chain says how dissfunctional the retail games sector in the UK is.The profit margins on new games and hardware is 10% at best, no retail sector exept high volume supermarkets is that low.
I know GAME got a lot of flak for selling pre-owned but the realality is that without that higher margin revenue stream they would have gone belley up years ago.
I guess the indie stores and HMW will fill the market void and Grainger games will expand southwards but without a high street presence and the free marketing that goes with it I feel the industry will diminish in the publics eye.
No more mid-night luanches and I will be suprised if the next call of duty game breaks day one sales for the fourth year in a row.

Posted:2 years ago

#28

Andrew Goodchild Studying development, Train2Game

1,254 421 0.3
Dominic, all signs indicate that the UK could support a dedicated games chain, Game's revenue was high, but too many unnecessary stores near each other combined with a failing overseas business meant their costs were to high.

Posted:2 years ago

#29

Login or register to post

Take part in the GamesIndustry community

Register now