Is This The Beginning Of The End For Videogames’ High Street Presence?


Questions are being raised this week about the future of GAME after a number of reports have arisen that indicates the specialist videogame high-street retailer is struggling to stock newer games following a number of its credit agencies withdrawing credit insurance on behalf of the chain. GAME is now having to pay for new stock of games up front if it chooses to sell them, something it has now had to rely on until now. There were serious concerns earlier this week that GAME would fail to have Friday’s triple-A releases (Final Fantasy XIII-2, Soul Calibur V, Metal Gear Solid HD Collection) on store shelves as a result, while concerns over the company’s long-term future meant Sony’s long-awaited portable successor to the PSP, the PlayStation Vita, was also rumoured to be following suit. 

GAME Group has since insisted tomorrow’s releases will be stocked and that the aforementioned titles were being processed in time to line store shelves on Friday morning. Meanwhile, PlayStation Vita’s launch throughout GAME stores has been guaranteed by the retailer. Still, GAME’s fortunes are looking ever bleaker – customers have reported that pre-orders for Bioware’s closing chapter in the Mass Effect saga, Mass Effect 3, were being turned away, while Metal Gear Solid HD Collection was temporarily unavailable to buy on GAME's online store. GAME has since hinted that it is considering selling a substantial amount of its international game stores, including those in Australia (where the Group has 94 shops), Spain and Portugal (288), France (197) and Scandinavia (67). 

You needn’t have the backing of Wall Street or accredit yourself as a highly-specialised retail analyst to have predicted what is shaping up to be GAME’s unfortunate demise – the retailer has reiterated time and again the ill-fortunes of videogames’ retail presence in light of the current economic climate. CEO Ian Shepherd acknowledged when announcing the company's 2011 sales results that the videogames market last year “was just awful” and that it was at just 60% of the size it was when it peaked in 2008 - scary figures when considering the videogame industry was once considered to be ‘recession-proof’ by vocal industry analysts. Apparently not. Total sales across 2011 as a whole tumbled by 14.5% and like-EA's CEO John Riccitello revealed concerns yesterday over a “European retailer's issues” that could “adversely affect” the publisher's Q4 results. A gentle reminder of the wider implications for the industry if GAME indeed does collapse.for-like sales fell by 12%. GAME Group's shares consequently crashed by 2.44p to 4.31p, valuing the company at less than £15 million - “the equivalent of about three days' sales”, according to The Telegraph

Though with sales across high-street retail stores continually on the decline in the current marketplace, the videogame industry continuing to see lay-offs, poor sales figures (especially when concerning lower-profile releases) and online retailers growing ever-more competitive with prices warranted by low overheads, it's becoming increasingly difficult to see how GAME, or indeed any other specialist game retailer on our ill-fated high street, will survive. Is GAME's' fate a sign of things to come?