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Legal battle kicks off between UK distributors over 'malicious falsehood'

A disagreement between UK games distributors Gem and 20:20 has come to legal blows, it emerged this week, after 20:20 reacted to allegations that it plans to open a chain of videogames stores.

A public spat between UK games distributors Gem and 20:20 has exploded into a legal battle, it emerged today, as Caudwell-owned 20:20 reacted to allegations that it is poised to open up a High Street chain of videogames stores across the UK.

A letter leaked to UK trade newspaper MCV from 20:20 legal chief Steven Lloyd to Gem sales director Chris Peacock revealed: "It has been brought to my attention that representatives of Gem have been informing game retailers that 20:20 intends to open a chain of game retail outlets in the United Kingdom."

But Lloyd argues that 20:20 has no such plans, insisting "this statement is completely false," and has commenced a filing for 'Malicious Falsehood' against its distribution rival.

Harlow-based Gem Distribution, the exclusive distributor to independent videogame stores for the Microsoft Xbox, Take-Two and Sega, among others, is determined to fight its corner and denies ever making any claims that 20:20 Games has plans to open a retail chain, and is reportedly taking legal advice of its own.

Gem managing director Paul Donnelly hit back in MCV that it was "fair" to question 20:20's videogaming plans. "We don't think 20:20 would go into retail. Why should [it]? [It is] a distributor, but [its] parent company is already in retail. In fact, [it] owns one of the most successful mobile phone retailers in the UK. So I think it's fair to wonder whether that part of the group might want to be in games too."

Indeed, the Caudwell Group is currently 'restructuring' its Discovery Store chain, and already has a heavy retail presence in the shape of Phones4u, where it has been dipping its toe into the games market with the Nokia N-Gage - the source of the simmering tension between the two companies.

Since the N-Gage saga, and the arrival of the 20:20 Games distribution arm, many in the industry have come to the conclusion that this growing interest in the games business is a precursor to it becoming a challenger to the likes of Game in the High Street - an assertion Gem claims didn't originate from its company.

Meanwhile, Gem isn't the only company to find itself in something of a battle with 20:20, after it began importing cheaper PlayStation 2s from around Europe with unofficial leads - much to Centresoft and Sony's dismay.

20:20 has so far refused to comment.

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Kristan Reed avatar
Kristan Reed: Kristan is a former editor of Eurogamer, dad, Stone Roses bore and Norwich City supporter who sometimes mutters optimistically about Team Silent getting back together.