High-street chain GAME has today warned that it’s survival is in doubt after failing to secure terms with prominent publishers.
The news prompted the FTSE100 listed company to put itself up for sale as the group’s shares dropped to a little over 1 pence. The news comes not long after the group announced that it was no longer going to stock new titles from the likes of EA games after failing to agree more favourable terms. Other publishers are reportedly reluctant to supply the company as they fear a situation where they would be unable to reclaim stock if the company went under.
GAME group includes not only the 600 high street stores but also second hand specialists Gamestation and mail order specialist Gameplay.com which recently shut down. The company employs over 10,000 people across its operations.
GAME has long struggled with several market challenges. The main threat has come from the big supermarkets who discount big releases such as Call of Duty, FIFA and Gears of War against a typical weekly shop.
The rise of digital marketplaces such as Steam, Direct2Drive and Origin along with the rapidly expanding casual game market has also made life difficult for the group as consumer habits change. Rumours that the next generation Xbox may not even have an optical drive is a fine example of how the gaming market is evolving away from relying on retailers like GAME. Under these circumstances it’s hard to see a business like GAME having a place in a broadband connected world.
Im no fan of GAME. They have catered more for the console market rather than the PC niche I’m interested in but unfortunately it’s another British high street chain that will probably disappear altogether. The loss of jobs for the people working for the group isn’t welcome news.
