So, it’s over. GAME are now in receivership.
And in some ways, it’s a relief. But in others – like the closure of hundreds of stores, and over 2,100 staff being made redundant, it’s a real heartbreaker.
The real question is why did it end up getting this bad?
In 2008, another UK high street giant fell under the groaning weight of bad decisions – this chain was Woolworths. The brand itself had residual value, and was identifiable. But it simply couldn’t meet its commercial and economic costs. The number of stores – all needing rent paid on the premises. The thousands of people employed, needing wages. The suppliers, needing to be paid. Woolworths couldn’t make nearly enough money to fill the demands expected of it. The result was inevitable.
GAME fell into much the same trap – it was ambitious and aggressive, almost to its detriment. It paid huge sums of money for exclusivity deals – so it could be first, and therefore somehow best. It aggressively expanded, buying Gamestation and Gameplay to further its ideals. It expanded overseas, setting roots in Europe.
All of this came at a price. And it was a price that The Game Group could simply not afford, at the end of it all.
Not to mention over the years, GAME itself became almost a cliche in itself. GAME were a games retailer – and yet, staff became blissfully unaware of the market they were peddling. As the staff became less and less knowledgeable and encouraged to sell anything, even if it were the wrong thing, they alienated the market that was knowledgeable. Which, as it turns out, is a significant portion of the market these days.
Then came its fights with suppliers. Last year, it was made very public that Nintendo – a company GAME had continued to marginalise in their stores – were not supplying 3DS machines. The solution? GAME gave their staff money to nip over to Tesco and buy the really aggressively cheap ones, which they then sold for profit. This sounds a bit dodgy, but commercially at least it held weight.
But for Nintendo, it seemed, that was really the final straw. It had enjoyed a lot of success in the UK, despite GAME, and realised – like others eventually did – that it simply didn’t need them.
As the credit crunch bit, GAME found it harder to get good borrowing arrangements on its stock. The idea was to buy the stock on credit, sell it and then pay back at a later date. With their power, you’d imagine this was unnecessary and doomed to fail when other stores and supermarkets buy their stock upfront. But did it they did. When borrowing shrunk, GAME began to lose its buying power. Rather than change it, they tried to make deals by buying extras for the games – costumes, DLC, exclusivity, prettier boxes. But it was a sticking plaster over a severed limb, doing nothing to really affect their real problem, which was they were reliant on something that was becoming harder and harder to maintain.
Had they changed back in 2008, perhaps we wouldn’t be seeing this awful turn of events. But hindsight is always 20-20 and despite interest in acquiring GAME from the likes of Comet and GameStop, RBS (Royal Bank of Scotland) is simply happy to let the value plummet so it can buy up the remainder cheaply, and sell it off again. Whether it will make a profit in this is doubtful, but will be interesting to watch.
But let us not forget as much as we disliked GAME, the staff didn’t ask for this and tried their best in tough circumstances. Once you have lost the shine on your reputation it is an incredibly tough task to get it back. GAME are victims of their own bravado and ego, thinking that what used to work would still work, even when the commercial landscape has changed so dramatically.
And it is bad news for our High Streets, which now will be cursed with more empty stores. And our national budget, as many will be forced onto Jobseekers Allowance for the near future, with no real expansion in jobs in this country to absorb another 2000+ entrants into the fray.
The demise of GAME sucks. And as much as I have mocked them, the economic and human impact is going to be hard to ignore.
GAME over. And we’re all out of quarters.