Game Over for Game – But why?

Right now if you visit GAME’s official website  you’ll find it “down for maintenance” with a message explaining the company’s gone into administration, who’s been appointed to handle the process and a disclaimer that the company is “currently reviewing and processing orders placed on this website.”

Why is a huge question – right now many of the company’s employees are asking the very same question and with good reason – Game is a games retail giant – or at least it was. Their failure is probably the biggest British retail collapse since Woolworths when its 815 stores went under at the end of 2008.

So what went wrong for Game? Well, depending on what sources you read you get different viewpoints. Here is my take on reasons why they could have gone under.

Sky High Prices

Ask any gamer why Game has struggled and they’ll point to one fact: high prices. Game products always had a higher price tag to their competitors. If you think about Amazon and Play.com, they regularly shave a good £10 off of launch day prices. One could argue that with Game you are guaranteed the game before its release date but really who cares when you could be paying as much as £50 a pop.

Shoddy service

I remember the days when I would order from Game and get the game about two days before the release however, when they changed the website the service changed too. It was clunky and difficult to navigate, games would take an age to arrive, orders might go missing etc. Try and complain and you would be told to wait at least 20 days to see if the game would turn up. It’s enough to make you want to hurl your controller.

Better alternatives

Game made the majority of their profit from those looking to trade in their old titles. This was a fine move; some would even say inspired. However they made enemies out of the software giants who wanted more of a cut. Ever wondered why nearly all games require you to purchase an online pass in order to play your pre-owned game online? That is the games company trying to reap more cash from the pre-owned market which arguably Game helped to build. However it was these same enemies who promptly decided to turn their backs when Game was calling out for help like a little baby. Have these enemies pull out the big titles from Games shelves, Fling in a couple of rivals like CEX, and Game was on a slippery path.

Non PC Support

Head into a GAME store and you will see the scarcity of space dedicated to PC gaming. They simply just don’t really cater for PC owners – it’s ridiculous considering that they’re the single dedicated high-street gaming retailer and should be the first physical port of call for all gamers regardless of platform. What’s more nearly all of the titles released that have had a huge impact such as Minecraft and Skyrim, were PC based first and all but the exclusive console games such as Uncharted reach the PC platform eventually.

New Digital Distribution Methods

As fast broadband connectivity continues to spread across the nation, so too does the prevalence of digital download platforms for all sorts of media. Gaming is no different. The Xbox 360 has the Xbox Live Arcade; the PlayStation 3 has the Sony Entertainment Network; the Nintendo Wii has the Wii Shop Channel; PC gamers look to Steam and Gamefly. Some sources have said that the next generation of consoles will not be disc based but Sony have spoken out directly in contradiction to this because of inconsistencies in Broadband quality which means that to take this leap could cut many consumers out of the loop which in turn would effect sales.

Mobile Gaming Is On The Rise

One of the reasons Game could have fallen so badly is the rise of mobile gaming. Whether you have an Android, Windows Phone 7 iPad or iPod touch owner, chances are you’ve got access to more than a few games at your disposal.  As the quality of mobile technology gets greater so does the graphics and so does the gameplay. Right now some people are so addicted to Angry birds that they are writing songs about it – and…erm less interested in Sonic or pesky plumbers and whats more these titles are just a download away – meaning Game cannot make any profit from these sales.

Lack of Passion

In the words of my manager – when the passion is gone, it is time to move on. I have spoken to many gamers since I heard the news about Game – and guess what? Many of them weren’t at all surprised. One lad told me ‘If you go into HMV, there is theatre, excitement, things are fxxxing happening- you go into Game, and sure you can talk to them about games, but the shops are cramped, you cant really play the games and they are not really into it!’ Well, I cant really say any more than that.

We’re All In This Together

Yes – we have heard those words before haven’t we? This may seem like an obvious point but it is a true one. We’re in the middle of a recession, and everyone has less cash to spend on luxuries, which videogames ultimately are. If it’s a choice between a meal and rent payments or a PS3, it’s pretty obvious which choice people are going to make.

Game – The High Street Games Retailer Goes into Administration

The high street games retailer Game fell headlong into administration today leaving thousands of high street workers faced with losing their jobs and millions of pounds still outstanding to its debtors.

The group, which has 609 stores and 6,000 staff in the UK, has effectively run out of cash and rumour has it that it was unable to meet even its basic rent and wage payments which were due this week.

Staff took to technology websites and forums to express their anger and disappointment at what one called a ’horrible situation’.

The difficulties experienced by Game are testament to the current ‘age of austerity’ marking a squeeze on living costs and a change in shopping habits and games technology. Additionally no further consoles have been released of late so some pundits have pointed at the lack any new technology to get games players excited and into shops.

The retailer had a £21m rent bill due last Sunday and faces an eye watering £12m wage bill this weekend. It is estimated that another £40million owed to suppliers and £10m in VAT seems unlikely be paid.

Administrators said the stores would remain open as it attempts to find a buyer for the business as a growing concern. It seems certain that hundreds of stores will go and thousands of employees will be out of work within weeks.

While the bulk of the Game business is in the UK, with 609 stores and 6,000 staff, there are around 700 other outlets and 7,000 staff in sister chains overseas.

The fate of the company is now in the hands of administrators at PwC. Speaking to the press today – Mike Jervis, joint administrator and partner at PwC, suggested the firm had ‘simply run out of cash’.

Mr Jervis said: ‘The group has faced serious cash-flow and profit issues over the recent past. It also has suffered from high fixed costs, an ambitious international roll-out and fluctuating working capital requirements.’

Poor sales at Christmas led the games giant to signal that losses for the year to the end of January were likely to be around £18million.

However, Mr Jervis insisted there is still demand for a mainstream high street computer games retailer.

‘We believe that there is room for a specialist game retailer in the territories in which it operates, including its biggest one, the UK,’ he said.

‘As a result we are hopeful that a going concern sale of the business is achievable.’

It is understood that the latest financial crisis was triggered when one of Game’s main lenders, the taxpayer-backed Royal Bank of Scotland, objected to the terms of a rescue deal with private equity firm OpCapita, which recently bought electrical goods retailer Comet.

Game has suffered dire trading in recent months, which forced it to ask suppliers for more generous trading terms. However, several responded by deciding to protect themselves by refusing to supply the retailer with any new releases, such as Mass Effect 3 and Street Fighter X Tekken.

The group has also been battered by competition from cheaper rivals on the internet, such as Amazon and Play.com, and the major supermarkets.

Separately, many people now download game Apps direct to tablets or smart phones, rather than buying software to be loaded in to consoles like the PlayStation, xBox on Nintendo Wii.

If you visit Games’s official website  you’ll find it “down for maintenance” with a message explaining the company’s gone into administration, who’s been appointed to handle the process and a disclaimer that the company is “currently reviewing and processing orders placed on this website.”

The failure represents the biggest British retail collapse since Woolworths and its 815 stores went under at the end of 2008.

Brits Rely on Their Mates when choosing a Tradesperson

Word of mouth x 4 more powerful than Advertising – survey reveals

Happy customers are the most powerful form of marketing, according to new research from Checkatrade.com – the UK’s most trusted website for monitoring the reputation of tradespeople.

The research, conducted amongst 2,000 homeowners, found that more than two thirds of people said they valued a reliable recommendation from a friend or family member friend more than any advertising or marketing.

In contrast, only 15% said they were content looking through the local directory to find a tradesman – just a quarter of those who favour the views of friends and family. However, despite rogue traders and cowboy builders on the rise and increased internet usage, only 1 in 20 people are taking the trouble to consult a tradesperson review site before employing a trader.

Brits rate tidiness
The survey also highlighted that, with the exception of price and workmanship, Brits rate tidiness above all other qualities when choosing a tradesperson. Almost two thirds (61%) cite it as the deciding factor, and, despite our increasingly hectic schedules, just 1 in 13 property owners favour tradespeople who simply get the job done quickly.

Meanwhile 1 in 7 busy homeowners are more concerned with whether their tradesperson turns up to the job on time, and 1 in 7 homeowners say being polite is the best way to win them over.
For one in twenty people builders arriving in scruffy overalls simply won’t do – they say it’s more important than anything else that their tradesperson is clean and well presented.

Commenting on the findings, Kevin Byrne, founder of Checkatrade.com, said: “Our research findings just go to show that tradespeople competing in difficult times need to offer the whole package – accuracy, speed, punctuality, politeness and personal presentation. Homeowners consider it vital for tradespeople to treat their properties with respect.

“Reputation matters. Word of mouth and recommendation are immensely powerful and this is what we have built our business on. Customers remember a job well done, but neither will they be quick to forget poor service.”