Administering the Pain: the Human Cost of GAME's Collapse
The collapse of specialist retail is bad news for the UK, but worse for those whose jobs were lost in the process, says Johnny Minkley
"Angry customers hitting the doors, police en route. Horrible, horrible situation."
The big-picture consequences of it have been endlessly debated and analysed for weeks. But it wasn't until today, as the heavy axe of administration finally fell on the beleaguered Game Group, that the human cost came to the fore.
The quote above comes from an email sent to me yesterday afternoon by a Gamestation employee. I'd contacted him for store-level reaction to the news that time had run out.
Nearly half the stores of the Game Group, which accounts for a third of games retail in the UK, gone in a matter of hours
Seven paragraphs in, and then this: "As I was typing this I've had the call. My store has gone." A snapshot of a moment that was being repeated across the UK as thousands of shop staff were being told they no longer had jobs.
Instructed to close the store immediately, staff of this particular outlet in the north west of England then had to face the fury of raging customers, presumably making a desperate last-minute attempt to cash-in store credit. Sacked and threatened in the space of an hour for nothing more than doing their jobs.
A tweet about a GAME store in Milton Keynes painted a similar picture: "'I want my £30 back.' 'We can't give that to you I'm sorry' Shopping centre security now here to remove angry man."
The damage in full: 2,107 jobs lost; 277 out of 607 UK stores close with immediate effect. That's nearly half the stores of the Game Group, which accounts for a third of games retail in the UK, gone in a matter of hours. And 40 per cent of the UK workforce.
Prior to today's collapse, GAME and Gamestation had taken a lot of flak from gamers and the industry for practices and prices, some fair, some not. None of this, needless to say, is the fault or the responsibility of store staff who, speaking only from my own personal experience, have always proved professional, courteous and helpful. Exactly what should be expected, of course, but having lived in London for almost 15 years, still rarer than 'Good Service' on the Northern Line.
GAME trained its staff well - I went through the process myself, working undercover in a store for a documentary on age ratings - but what mattered above all was the knowledge and enthusiasm for video games they brought to the role for free, invaluable to casual buyers and browsers. There's no straightforward replacement for that service if another chain fails to rise from GAME's ashes.
Someone let us down by leaking information before it went public, [but] we all still deserved to be kept fully in the loop
The Gamestation manager I spoke with, who doesn't want to be named, offered insight into what it's been like to work through the incessant flow of bad news and media speculation in recent weeks.
"Someone let us down by leaking information before it went public, [but] we all still deserved to be kept fully in the loop. It's almost felt like some of the stuff we've been told was more a reaction to articles on the web than wanting to let us know what is actually happening.
"From my own store perspective, and from those I've spoken to at other stores, everyone buckled down and carried on. No matter how angry they may have been, they've pressed on. The staff in our store have of course been very concerned about the future, but we've all tried to stay positive, throwing some good old-fashioned humour into the mix. Everyone should be proud of their efforts."
GAME crumbled like a car crash in slow-motion, after it lost credit insurance with banks following a bad Christmas, then, one-by-one, publishers withheld major new releases until its position as a going concern became untenable.
The group's problems were clear enough: too many stores, a failure to adapt quickly enough to a changing marketplace, the price competition of online retailers and supermarkets. And yet, even with foresight of these factors it still failed to save itself.
"I believe it could have been avoided," says Mastertronic MD Andy Payne, "but not without radical action some time ago." For him, the sheer size of the debt the group ran up was "clearly a major issue", although he sympathises with the "sheer agony of having to manage a property portfolio" - with all the hideously protracted negotiation of leases and rates that entails.
An executive at another leading publisher, meanwhile, is simple relieved not to have a major release out for a few months so he can "watch how it plays out".
Payne is not alone in believing the crisis could have been averted. Ian Shepherd - who stepped down as CEO of GAME as yesterday's new broke - tweeted late in the day: "It breaks my heart to see a business made up of such magnificent people come to this and yes, I think we should have been able to avoid it".
Yet still it failed. But the narrative must now move on from what when wrong to what happens next.
Nintendo's revival of Kid Icarus may have charted at a decent-sounding seven, but I sincerely doubt anyone at the company will be cheering the figure behind that position
A buyer may yet emerge to launch a leaner operation from GAME's assets which, in the interests of preserving a high-profile high street presence for video games in the UK, would be the industry's preferred outcome.
But there are no guarantees - and the death of GAME is a symptom of wider fluctuations and uncertainties in an evolving marketplace.
Anyone with access to Chart-Track sales data can see how serious the situation is in physical retail. I'm not allowed to report on specific numbers, which are subject to copyright, but consider this: the number three game in last week's All Formats chart didn't even break five figures for the seven days. That's really not good, even at this time of year.
And this week, Nintendo's revival of Kid Icarus may have charted at a decent-sounding seven, but I sincerely doubt anyone at the company will be cheering the figure behind that position.
Payne points to the number of adults under 25 - core gaming's key target audience - who are unemployed and unable to afford new releases, adding also that "the sheer volume of content is making it a noisy world", fuelled by explosive growth most notably in the mobile space.
Either way, the GAME is up, and the retailer becomes a major casualty of a transition that is destabilising all parts of the business, the impact of its loss certain to be felt acutely by many in the short-term.
Not least the 2,107 who this week lost their jobs in service of it.