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Administering the Pain: the Human Cost of GAME's Collapse

Administering the Pain: the Human Cost of GAME's Collapse

Tue 27 Mar 2012 6:45am GMT / 2:45am EDT / 11:45pm PDT
Business

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

Gamestation manager

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.

23 Comments

Joe Bognar
PR Account Executive / Journalist

99 2 0.0
Great article!

Good luck to all affected!

Posted:2 years ago

#1

gi biz
;,pgc.eu

341 51 0.1
Well, for those advocating the end of Game, this was to be expected. The opposite would be kind of unrealistic... All we can blame is the staff responsible for setting ridiculously random prices (not so random from a certain closed minded point of view) and for coming up with all their little scams, damaging customers in primis.
I hope those people without a job will find something soon. Those in London are at least lucky enough to be in a city that has so much to offer.

Posted:2 years ago

#2

Kingman Cheng
Illustrator and Animator

952 180 0.2
Again good luck to everyone who's affected by this. :/

Posted:2 years ago

#3

Bruce Everiss
Marketing Consultant

1,692 594 0.4
Tragic for everyone involved. A big hit for the industry to lose so many committed, knowledgeable people who spent their working lives spreading the message. A pity they weren't better led.

So many people who now work in so many other areas of the industry have working at GAME somewhere in their CV. It was often the first job for game enthusiasts who wanted to become a part of the game industry village. I have seen this in many job applications.

Posted:2 years ago

#4

Emily Knox
Associate Designer

47 96 2.0
It's been dreadful reading this news as it unfolds, and I feel so sorry for all the staff at GAME and Gamestation. I'm appalled that in the remaining stores some customers are incapable of being courteous or respectful to those on the shop floor after all they've been through, it's disgraceful.

Although MCV have kept us all thoroughly updated, I hope the staff don't bother reading deeply into the comments left in their articles' wake, it's been unsavory at times to say the least. I'm at a loss as to why anyone decides that now is a good time to weigh-in on why they don't like the company, or continue to repeat how indifferent they are as to it's demise (people who are genuinely indifferent on a subject are usually mute on it, too). When any company folds, related to games or otherwise, there's usually at least a somber reaction and regret for the jobs at stake. I am sad that some people cannot manage to muster this, people who had one bad experience and thoughtlessly tarnished thousands of people with the same brush, who can't comprehend that for many folks this was not only a job but a livelihood and a passion.

My boyfriend has worked at GAME for years, we're lucky his store wasn't shut yesterday, unfortunately the same cannot be said for many friends and acquaintances, from part-time students to full-time parents, who are now undeservedly out of work. Being unemployed is a wretched experience. Good luck everyone.

Posted:2 years ago

#5
I worked at Gamestation until a few weeks ago and the team spirit was one of the best things about the job, some of them have done that job for 10 years and then to suddenly be told it's gone...
It's a shame but hopefully something positive will come from it.
Good luck everyone!

Posted:2 years ago

#6

Private
Industry

1,176 182 0.2
Game draged this out for ages and in the end the course they took was telling people during the day they are out of job and payed only until the end of the week.

To top it off they suspend gift cards and yes they are in administration but people payed for the gift cards and I fail to see where this can be legal and same goes with pre order deposits. Administration cant make it legal to steal money from people.

The first once to go should be Shepard and co who are responsible for this mess without pay to stop wasting company money on their salaries.

Good luck to the people who worked in the stores and lost their jobs.

Posted:2 years ago

#7

Emily Knox
Associate Designer

47 96 2.0
Ian Shepard already resigned, as administrators are in control now, it is my understanding that they are the ones who informed the stores they were closing that day.

Posted:2 years ago

#8

Thomas Dolby
Project Manager / Lead Programmer

335 283 0.8
Everyone saw this coming, so I can't believe there wasn't a more graceful shut down and notice period for the employees. You shouldn't have to find out you're going to be out of a job in the newspaper, they should have had some official notice that they'd be out of work soon, not just told not to come in tomorrow.

Posted:2 years ago

#9

Morville O'Driscoll
Blogger & Critic

1,536 1,339 0.9
@ Werner

Posted:2 years ago

#10

Preet D Bass
student

92 13 0.1
To all the Staff that lost ur job, well good luck. As for Shepard I dnt think GAME group going into Admin is going to look good on ur CV.

Posted:2 years ago

#11

John Donnelly
Quality Assurance

313 38 0.1
Seen this on the RTE news

http://www.rte.ie/news/2012/0327/game.html

Posted:2 years ago

#12

Morville O'Driscoll
Blogger & Critic

1,536 1,339 0.9
Fair play to them. Doubt it'll make a difference, but good on them for trying.

Posted:2 years ago

#13

Chris Nash
QA Engineer

47 23 0.5
@ Werner and Morville -

I'm sure you probably know this, but things like credit on gift cards and reward points are "unsecured credit" and low on the list of things to be paid by the administrators. The terms & conditions probably cover this eventuality too. UK business law means that creditors can't take legal action to recover what's owed to them once a company enters administration. Recall the Farepak hampers business a few years ago, where most customers lost everything they'd paid into the scheme, with no hope of recovering it.

That said, haven't PwC made statements to the effect of "if we find a buyer we'll look into restarting the reward card and gift card scheme"? All may not be lost.

Posted:2 years ago

#14

James Verity

132 25 0.2
Good Luck to those that are now without a job, some of you will need all the luck you can get...

Really bad to hear that people have lost the money on the gift cards... surprised more people hadn't cashed them all in last week... also all those that had pre-orders have lost money... not good at all!

Not looking good for the Gaming Industry at the moment, too much of the chuck it out and patch it later strategy being used... and ripping gamers off with DLC already programmed before game is released... Devs change your ways or you'll end up going to the ground too...

Posted:2 years ago

#15

Pete Thompson
Owner / Admin

177 101 0.6
Shame that game have gone under, I think it's been expected for a long time now as they have the dearest priced games/hardware/accessories in the country, I've not bought a game from them in years because the likes of Amazon & Shopto.net

I wish good luck to all that lost jobs though, as that's not good!

Posted:2 years ago

#16

Private
Industry

1,176 182 0.2
That`s from the cached Game.co.uk site

"GAME may vary these terms and conditions for legal, security or regulatory reasons or may suspend or discontinue the Gift Card scheme where necessary due to circumstances beyond GAME's reasonable control. GAME will give such notice of any variation of the terms and conditions or any suspension or discontinuance of the Gift Card scheme as is reasonably possible, whether by notices displayed in GAME stores, on the www.game.co.uk website or otherwise."

Even giving the people 1 day of notice is reasonable, suspending them right away without giving any notice isn`t reasonable. I didn`t had a gift card and I told everybody to use their credit 2 or 3 weeks ago, but I keep up to date with news. Game knew very well they go into administration last week and at that point they should have already said to their customers that they should use their credits now because later they might not be anymore valid. You can`t get whatever is on the gift cards in cash, they are not selling that many game obviously and at leats people might go their have 20 on the card and buy something for 40 and give them 20 cash. Now why would you go there? The in store prices are in a lot of cases still not competitive with other retailers, you can`t use your points and cards and there are not that many games they have anyway.


If they find a buyer and they just rebrand the stores would they be legaly forced to accept the Game gift cards and reward points?


@James: That`s the fault of the mismanagment of the people in charge of GAME. Games sell good, but if you have a Games store chain and that`s nothing more than a cash converters focusing on second hand and stocking only the bigger games as new you are bound to fail. You know how often I want in the last 2 years into Game looking for new released games that are not so much known and couldn`t find them, but that where stocked at the HMV and GameStop 50 meters away? A lot. And then they where going on about how much money and how profitable the second hand market is for them.

Posted:2 years ago

#17

Morville O'Driscoll
Blogger & Critic

1,536 1,339 0.9
@ Chris

Oh, yeah I know (I had this same discussion with someone on the PC Gamer site :) ). It's just bad practice. Not sending out a memo last week saying that gift cards and rewards cards shouldn't be promoted or sold does only negative things - harms the name of the brand, and consumer goodwill.

Edited 1 times. Last edit by Morville O'Driscoll on 27th March 2012 8:34pm

Posted:2 years ago

#18

Christopher Bowen
Editor in Chief

420 581 1.4
To be completely honest? Anyone who still has credit on their reward programmes, I have little sympathy. It's been clear to anyone who even picks up a regular newsppaer that GAME has been in trouble for some time, and I say this living in America.

Posted:2 years ago

#19

Damien Robson
Studying Games Software Development

15 0 0.0
I did a Christmas temp job at GAME last year, and it was one of the most memorable experiences I've ever had. It was my first step in an industry I hope to be thoroughly involved in in the coming years, and I wish all the people involved all the luck in the world; being a student, I know how hard it is for those with a passion for anything, let alone games, to have a chance at finding what they really want to do in life.

I've yet to check if the Game I worked at has closed, but where I live, there's 2 GAME stores and 1 Gamestation store within throwing distance of one another. As Johnny points out, too many places I've visited have had too many stores bunched up together. Fair enough if they're place in areas where the potential for business is high, but surely, in this day and age, people are prepared to walk the extra thirty seconds they would have had to walk had the store not been there? As an example, I've often had one store ring the other to find out if a product is in stock for me to go and collect. If I'm honest, I would have rather cut the time waiting for store 2 to answer, do a stock check, etc. and make my way around the corner to the other (they are literally that close). I'm not much of a property magnate, but surely merging the two stores into one big store would be cheaper and more beneficial to everyone?

I've seen stores such as HMV expand over a 2x2 shop radius within a year, and they don't suffer a single loss at the expense of paying slightly more rent. More product = more customers. The victims of this entire scenario are the employees and the general puublic. Yes, GAME may have been slightly more expensive than some, but the level of service that was offered more than justified the extra few quid.

Kudos to the GAME staff, I say. They are some of the most dedicated people you'll find in any industry, and they deserve a whole lot better than what they've been given.

Posted:2 years ago

#20

Private
Industry

1,176 182 0.2
I always found the people in the Game I went to in the past here in Dublin nice, altough I didn`t buy much there in the last year due to not having what I was looking for, but the people where friendly and nice and It`s not their fault what games they stock. As it looks now they closed all of the stores here. I don`t know how much money they made but closing all of them is strange given the one I always went to was well visited. Looking at that what I could imagine is PwC talking with GameStop and having almost a deal finished with them, because they have a strong presence in Ireland and woudln`t need the GAME stores because whereever you have a GAME a GameStop isn`t far away.

But yea it`s a shame all those people loose their jobs and having no notice at all. The writing was on the wall and so on, but it`s not that easy to find a new job and I know from experience sometimes you can be overly optimistic to keep your job and ignore clear signs if you like your job and want to stay where you are.

Posted:2 years ago

#21

Alex Byrom
Studying Multiplayer Online games design

33 0 0.0
tbh if people didn't use there gift cards by now it's there own fault, we all saw this coming. It was only a matter of time, at the first sign of trouble me and all my friends dumbed our reward points. Still I wish the best of luck to those looking for a new jobs.

Posted:2 years ago

#22

Morville O'Driscoll
Blogger & Critic

1,536 1,339 0.9
"we all saw this coming"

Yeah. We all saw this coming, because we all read this website (and others), and pay attention to the business pages. My friend who worked at one of the local stores (and who's a pretty hardcore gamer), didn't see this coming. Why? Because, until a company actually goes bust, it's not front page news, and she assumed that the company would give her and the people she was working with notice. I wonder how many students, too busy doing degrees to pay attention to the games sites, saw it coming; I wonder how many grandparents and parents just assumed that the store would still be there in a few weeks time. :/

Posted:2 years ago

#23

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