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Posted by drew10 on Mar 22, 2012
GAME – What Really Happened?

GAME – What Really Happened?

So it now looks like GAME Stores Group is gone and it is a travesty. It is a travesty for all the 6000 employees who will be out of work. It is a travesty that the monopolies commission failed to act when they bought out Gamestation. It is a travesty that the very presence of GAME as a brand in the high street destroyed many of the independent game shops. It is a travesty because the shops themselves could have been so much better than they were. Devoid of atmosphere and personality the stores failed to capture the very essence of what it is to be a game shop. Mostly it is a travesty that the high street will now be without a dedicated Game shop, something that will harm the industry in this country, at least in the short term.

So what really went wrong? Well, dating back to the time when the Rhino Group bought the Virgin Game shops and branded them as the terribly named Electronics Boutique. EB then acquired Game in 1998 adding 86 stores to its 77, although the group was not re-branded as GAME until 2002.

GAME continued to grow and enjoyed a huge market share finally gobbling up its main competitor Gamestation from Blockbuster. It obtained Gamestations 217 stores in the process. Rather than re-brand the stores with the GAME brand Gamestation continued to operate as is. However whereas before Gamestation were a true competitor, offering lower prices than GAME, now prices were brought in-line eliminating the competition in the high street. This move seemed a great idea at the time but it is this move along with a changing market that ultimately sealed GAME’s fate. This rapid expansion, when many companies were tightening their belts as the recession began to bite proved too much of a pill to swallow.

If GAME had thought the purchasing of Gamestsation had secured its place in the high street then it was sorely mistaken. As gaming moved into the mainstream Supermarkets quickly added games to their shelves. Due to the immense purchasing power Supermarkets were able to cut new games cost by massive margins, sometimes even taking losses on new titles to get people in store and to outdo their rivals. GAME simply couldn’t compete.

Their only saving grace was the pre-owned market. But poor trade in prices coupled with high re-sell prices meant that GAME was seen as taking advantage of gamers. Then larger stores like HMV and even some supermarkets began to do their own trade-in service again pricing GAME out of their own market.

Another major change in shopping habits took gamers out of the high street and onto specialist internet retail. Less overheads meant more competitive pricing and online retailers like Amazon soon hit the high street hard.

When GAME then ran into trouble and suppliers removed their credit the writing was on the wall. As games companies removed support for the troubled chain, they tried desperately to find a buyer. A brief glimmer of hope came in the shape of OpCapita, who only last year had saved electrical chain Comet, but this proved a false dawn.

Now GAME are in administration after the board yesterday admitted there was no capital left in the business. Whilst the retailer is still trading at present shops are closing and it remains to be seen if anyone will step in and buy the chain in any guise.

 

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