GAME used to be a thriving place where gamers flocked on a daily basis for their videogame fix. If you weren’t trading in your Playstation 3 for an Xbox 360, you were checking out the newest releases or placing a pre-order on a future blockbuster title.
Sadly games are no longer nestled in a plastic bag with ‘GAME’ emblazoned on its side. Instead many videogames are getting cosy with a floret of broccoli as many gamers are finding it not only easier, but far cheaper to buy games from their local Supermarket.
Not only does GAME have to compete with this high street threat, but they now struggle to keep up with constant deals online from gaming sites that have no shop front. So whilst GAME has to foot an annual rent bill of £80 million, retailers online need only pay for hosting on their website, which is a fraction of the cost.
Problems have been going on for a while now for GAME and Gamestation, but this past Christmas was the wake up call retailers were not expecting. Retail sales across the board were down 30% for high street stores, with GAME coming close to that mark with an 18% drop in turnover. The figures above confirmed the retailers worst nightmares, their Christmas sales would not be enough to pay off their mounting debts.
Surely having a shop front isn’t enough to force retailers into dire straits, especially considering UK gamers alone fork out £2.5 billion a year on videogames. What’s more with such a wide variety of titles on offer there must be little threat from supermarkets when it comes to gaming sales. Sadly that is not the case, the main issue high street gaming stores have with Supermarkets like Tesco is their ability to sell games for a loss, yes you read right, they are effectively paying you, the gamer, to purchase your favourite title from their stores.
So how can they do this, simple really, marketing. Companies such as Tesco and Asda know that when you go into their stores even if you’re not buying the weekly shop, their well placed sales advertisements and product placements invariably have you picking up more then just your game. So while GAME struggle to shift the latest COD for £40, Tesco are laughing all the way to the bank as Mom’s by their sons the game for £25 along with their groceries.
The games themselves are by no means helping with the pre-owned market being hit hard by new innovations such as the EA online pass. This pass allows for one EA online pass when a new game is bought. Once the game is re-bought, say after being traded in GAME, then the pass is no longer valid in the game so the new owner must fork out a further £8 or so just to get online.
With such stiff competition it’s no wonder that GAME is re-borrowing money from the bank just to keep its doors open to gamers who don’t want to walk in. The sad reality is that it doesn’t look like the future is any brighter either for games retailers. With supermarkets constantly selling below cost, and online shops working with no rent and being able to offer games for a lot less than their front of shop counterparts, you have to wonder where GAME & Gamestation figure in the future of videogame sales. In this ‘save and scrimp’ society that the economic crisis created, it’s hard to imagine someone willing to spend more on exactly the same product if only to keep their local gaming store ticking over. Even if you can save just a single pound, it’s enough to tempt anyone away from their favourite high street store.
I think it’s about time we all waved goodbye to GAME.