GAME Group looks for a buyer
GAME Group has two weeks to find a buyer, otherwise it will likely be forced into insolvency and its stores shuttered for good.
The Sunday Times reported this weekend that Game has placed itself up for sale, appointing Rothschild to find a buyer as its debts mount ahead of rent falling due on its high-street properties. Should Rothschild fail to find a buyer, the chain - which owns both GAME and Gamestation as well as the web-exclusive and recently-shuttered Gameplay brand - will be forced into insolvency.
The news comes as part of the company's continued financial struggles which have seen it fail to secure distribution rights for new-release games from a raft of publishers, including the much-anticipated limited edition releases of BioWare's Mass Effect 3.
Trade publication MCV, which has been documenting GAME Group's recent problems, suggests that US retailer GameStop may be interested in purchasing some stores. The company runs a web-based UK retail arm, and previously had a small number of high-street shops in the UK and Ireland before closing them in favour of online-only retail.
However, despite signs that GameStop may be interested in GAME Group's Spanish assets, there's little hint that it's planning to buy its UK stores - despite a knock-down price. Following the publicity surrounding its financial struggles, GAME Group has seen its share price drop this morning to just 1.15p for a market cap of just under £5 million.
That figure might seem like a bargain, but there's a catch: whoever buys GAME Group's assets will also buy its liabilities, in particular its massive pile of debt and outstanding rent payments for its properties. As a result, it will take a company with deep pockets and a real plan for change to consider saving the iconic retailer.
Should GAME Group fail to find a buyer, its insolvency would have a major impact on the state of the industry - as explained in this analysis by Joe. For the sake of the industry, and regardless of the company's somewhat premium pricing policies and questionable business practice with regards retro stock, let's hope Rothschild is successful.
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Discuss in the forums ReplyActually, that would be a very good idea. Tesco already has a game section, but it's relatively small. This kind of move would get more customers into the shop buying games and then toher things. :)
The problem is, deducting £25 from most items in store brings the price into line with online retailers...
LOL. Serious? You think google wants a chain of stores? You think google sells enough physical products to justify a physical presence? Sure google could pull something out of a hat and release a whole chain of products but they haven't done that and even if they do they'll prefer the flexibility of online long before they go retail.
Am I alone in hoping they go under? I don't want people to be out of work but selling digital products through retail is just so 20th century.
I'm old enough to remember when Boots (of all places) was the place to go to buy your latest game, but I came to terms with WHSmith being the new boy in town. The double-decade since then hasn't really changed much just increased the choice and increased the prices.
But now you get a better choice and better prices if you abandon high street retail. The developers (Especially independent devs) make more money via ditching retail completely. So good riddance really.
I can't believe people want Tescos to take over, it's like asking a frickin' vampire to pop in for a cup of tea! Don't invite them in!
If you abandon retail stores you will only end up paying the difference from their loss in another part of your life.
Best thing to do in a recession is spend loads of money.
Personally I like to see people employed and large companies keeping this countries economy strong.
Tesco employ tens of thousands not just in UK but across the globe, so I'm not sure I understand the vampire comment.
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and thats the main issue for alot of famillys the recession has hit them harder now than it ever did before
people have just stopped buying none essentials ( games and cloths fall into that catagory )
Look at peacocks brand across the uk known by basically everyone, Even that failed to secure a buyer for all its assets.( around 60% of stores closed) If game is brought half the stores will shut down so your still looking at huge redundencies either way.
I personally dont think they will find a buyer, The shops ive passed in the last few days have been dead and these are in prime retail locations in the metrocentre and newcastle main shopping centres so not in the middle of no place.
Ouch, 1.56p at the time of posting!
Yes, but what would be better for the economy and for people?
A) 10k people working for Tescos and brining in £10billion in revenue for Tescos?
B) 10k people working for themselves and brining in £10billion in revenue for themselves?
I've nothing against Tescos and supermarkets but a system where the vast majority of the profit lies with a single company is wrong.
Digital distribution doesn't cure that completely, but as a developer I'd much rather my products were sold online and I make 70% of the price, than them being sold in a shop where I'd be lucky to make 5% of the sticker price.
Ditch the retail model for games. It's antiquated and not needed anymore. Yes people will lost their jobs but that can't be avoided now.
My argument is basically to empower the little guy to make some money for themselves and if a few big names fall by the wayside (and we can't stop them) then that's okay in my book (Seeing as there is nothing I can do about it).
But...
It's not only digital distribution that's killed Game. It's the likes of Play and Amazon being able to undercut them and with the AAA titles still ship them out so they arrive on the day of release why buy from Game when you can save money elsewhere.
Same online, had to take a look with the news about them lately & looks like business as usual.
Even taking pre-orders.
Need for speed the run RRP £34.99 spring cleaning Sale price £34.99. :|
If they are about to go under it makes perfect sense with the amount of stores there is, nearly as common as mc donalds, surely there was never ever a need for so many game stores it's crazy, whoever made the decisions to open so many stores must be a huge part of why things are going or gone wrong.
The only likely prospect would be a company in need of a nationwide store network. Amazon could be a player here, though I doubt their margins would allow for a significant High Street presence.
Yes, but what would be better for the economy and for people?
A) 10k people working for Tescos and brining in £10billion in revenue for Tescos?
B) 10k people working for themselves and brining in £10billion in revenue for themselves?
[/lyQUOTE]
Sigh.
Where do you think that the rest of that money goes?
It doens't just get put in a cave to disappear. It circulates all over the place. Any massive profits that are made will either be put into investment (more money for the builders who make this), into shareholders (which is mainly pension pots).
Also revenue is not profit. Therefore for the economy it doesn't really make a difference as long as they paid their suppliers and taxes.
I also noticed about them still taking pre-orders - ever the optimists eh? I'd hate to see them go under but in all honesty I wouldn't be surprised. I'm amazed that they've lasted this long with games online being almost always cheaper - same applies to HMV, WH Smith, Waterstones - amazon almost always beats them on price (and supermarkets more recently) - I imagine they're feeling the pressure also...
Head to Game.co.uk and get it done, so much the better as you can empty the card on a single order and not worry about batches of x00 points at a time. Just got The Social Network Blu Ray for less than a fiver and cleared my card, though the only good Blu Rays left in stock for a good price were Fight Club, Social Network and .REC 2, the latter being £5.49 at Amazon anyway.
[EDIT] Dunno why I was being so open-minded just then, the management are either stupid or there's something in it for them to let the firm die, who leaves it until two weeks before rent day to try and rescue an entire shop chain?
No, nothing in it for them - just stupid. I feel desperately sorry for all the vast numbers of people about to lose their jobs, but the way their senior management have behaved in recent years amounts to little more than corporate suicide. Not just leaving looking for a saviour until almost the dying minute, but other decisions too:
Buying GameStation's 200+ stores in 2007. Yes, because massively expanding your high-street presence when almost everyone else was cutting theirs back was really sensible. The arriving recession wasn't their fault, but the timing seriously compounded the stupidity of that decision. Also, a huge number of those stores they bought were located close to their existing stores - effectively putting them into competition with themselves.
The argument with EA, stopping EA games being sold in their stores - management should REALLY have found a way to avoid that.
I just had a look at their online store to see it there were any bargains to be had - I searched through the £0.01-£9.99 section. Scrolling through hundreds and hundreds of games 'out of stock' to find the few that were available - probably at a ratio of about 8-1. 8 out of stock to 1 in stock. If it's out of stock, why not remove it from the webpage? Listing hundreds and hundreds of products that I can't buy, while making me search for the rare few that I can - how is that good business? I got bored and gave up after a half dozen pages - as I suspect most people would.
Just demonstrates that corporate negligence isn't confined to banks...
You don't have to live in North Wales or the Scottish Highlands to have bad internet service either, there are plenty of places on the outskirts of towns and cities that may as well be in John O' Groats for all the service they can get.
Game maybe able to survive though it will be much smaller then before, im really suprised the company has not decreased its store amount sooner.
True but services like amazon.co.uk will more than cover for a loss of most of the high street and still allow you to get physical media.
Sure, for you lucky ******* with a fast enough internet connection. I have a 700Kbps connection. Steam and other download services are not practical for me. Interesting fact, on my phone standing in my back garden i get ~850Kbps download speed on 3G, faster than my landline connection. Screw you BT and your point blank refusal to upgrade the lines in the last 5 years.
That's thankfully true, but as Farting Bob just pointed out, that's not what people like Gradius were talking about - a form of: "I'm all right Jack, stuff everyone else".
If Game hadn't left it so ridiculously late then there could have been a number of options available to potential buyers - there's a good chance the business could have survived in some reduced form, and that other options may have been available for the rest of the stores and staff. As it is, it's almost impossible for other companies to put together a studied game plan and carry out the required due diligence in time. It's a self inflicted catastrophe due to corporate negligence. If I were a large shareholder I'd be asking serious questions and, potentially, considering personal lawsuits against the board members.
Talking of Amazon, I think the time has probably come for them to start opening high street shops/collection points - so that people can conveniently go and collect the stuff they bought online from their local high street, (as many potential customers find it difficult to use online shopping due to difficulty taking deliveries). This may have been a perfect opportunity for them to do that with a ready-made network already in place and ready to go - but probably not at this short notice.
It's all such an unnecessary waste.
The people who caused this problem, upper management, will just waltz into another roles elsewhere... the actual shop workers though...
We've seen this before with DRMed music services - customers losing out following the closure of the likes of Virgin Digital and Yahoo Music. Don't be too quick to volunteer as the next victim.
Agreed -- It's not a good thing. I live in a relatively remote area and Game is just about the only retail store I know of within 25 miles that sells games, period.
A lot of titles are overpriced but conversely I've seen premium titles cheaper (at least online) from Game than on Steam.
That said, has anyone else felt that the online Game store has felt like an oddly barren throwback from 2004 for quite some time? I can't quite put my finger on it -- maybe it's the odd Wii peripherals and plush versions of Wario that they sell.
I will certainly miss Game and Gamestation as I have many memories of buying the games from there and they often provide a welcome reprieve from when I get dragged around shops by my mother and sister.
They also provide a convenience. Although I often buy online, a lot of games and peripherals I buy I would buy in store. I mean if im in town I will usually drop in and browse the charts and 2nd hand section for some interesting games but also for being able to see the hardware so you can tell if you can actually use it and that it is comfortable to use.
I would much prefer to have the physical disk mainly as collateral eg. if my computer breaks and I can't remember my steam password (because it is on auto login) im screwed for a while. What if my computer gets and the games get stolen, physical media is always covered under house contents insurance. The data is not. ie. If a hard drive is stolen and a game is stolen you can get a replacement for both but if you cannot prove what is on the hard drive you cannot get the data back (ie a downloaded game).
This however is just my personal preference and I will likely continue to use amazon more than steam and origin.
Why not? Things will take a bit longer but you'll still be able to download games. What does that equate to? 3.5hrs per Gig? If you're in a real hurry you can order a physical copy.
Trouble is everyone is so used to things happening instantly that even moderate delays seem to take an age.
I remember when I first started to rip my CD collection, you know how long it took? 1Hr! Per 3min track! And that was only to 120Kbps MP2!
Game going under is going to put some people out of work. In the same way that a lot of local fishmongers, greengrocers, butchers, coopers and black smiths went out of work when the retail model / buying habits and technology changed.
A lot of people prefer buying digital copies (I do), and people are spending more and more on mobile and casual gaming - a model that isn't compatible with retail chains.
Dedicated gaming retail stores have been dying a death for a few years now. Their days are numbered.
I'd love to see some stats of bit-tech members here and tot up how much you've spent online (Steam, Play, Amazon, App store etc) compared to how much you've spent in retail. I'd wager that online sales have had the edge for a while.
For me, I think I haven't bought a physical copy of a game in over four years. Last one was probably GTA IV.
That's most of the reason why they're in this mess. GAME can't afford to drop their prices down to competive prices! I stopped buying there a year or 2 ago.
If they cannot compete, bye bye. It's just the way capitalism works.
But they had key chains!!!
They can pretty much **** off and die.