UPDATE: May 28 5:42PM: This article is speculation based, we have no official word from GAME that closures are imminent. We apologize for the sensationalist title, which we have now changed.
There is one shop on the high street that’s as recognisable as any, with it’s white font over a purple background, of course I’m talking about GAME. For as far back as I can remember it has been the go to place to pick up your day one releases, chat with the staff and search for those pre-owned classics you missed the first time round.
GAME DIGITAL Plc, which formerly operated under the name ‘The Game Group Plc’, fell into administration in 2012 after suffering a series of financial problems. More than 270 stores were closed and around 2,100 employees were made redundant before the group was purchased by private equity firm OpCapita. Since then the company has seen its shares rise and fall since it re-listed on the London Stock Exchange, and now the company has hit troubled waters yet again.
Game Digital has told its shareholders it has lost “significant” levels of credit insurance after the second year of poor Christmas trading. This means that big companies would not lend to the company in the form of stock. This is a repeat of what happened in early 2012 when companies like EA, Activision and Microsoft would not lend to the group. In the letter sent out it was quoted as saying – “reduction or removal of significant levels of insurance cover.” This is reported to be around the £100 million figure. He also said that it “has had no material impact on the group’s ability to purchase stock from suppliers on credit terms, though this may change as the group’s peak trading period approaches”, The loss of credit insurance can have disastrous consequences for a retailer, similar to what happened to the high-street stores such as Woolworths, Focus DIY and Zavvi. Without the cover, which protects suppliers, retailers will struggle to buy sufficient quantities of stock.
According to the letter, Chairman David Hamid said:
“This has had no material impact on the group’s ability to purchase stock from suppliers on credit terms, though this may change as the group’s peak trading period approaches.”
This news comes as a shock to employees who fear for the future of their jobs. We have been informed by a GAME employee that the future for the company relies on E3. He asks to remain anonymous but said:
“Staff are fearing for their jobs as we don’t know what the future holds. We have been told it all relies on E3 and what the companies announce, along with demand of up and coming games. We have had a poor few years as the transition to next-gen for consumers did not happen as quick as anticipated”
Even with 60 million “next-gen” consoles sold world-wide it has taken a few years and much longer than industry specialists thought it would for people to upgrade.
“We need something new to sell” our source said, “However the rumored upgraded Xbox and PlayStation Consoles are not what people want just yet, it’s just too early as people have only recently made the transition. Nintendo are keeping quiet about the NX and it’s still uncertain if they will release before April 2017 (this financial year)”.
“At present EA have cut ties with us and we can’t get the stock, that’s going to have a huge impact on us with the AAA games they have coming out towards the end of the year, at present we have only been given enough stock to fulfill Pre-Orders for Mirrors Edge. If this is a poor E3, or things are not coming out till later 2017 then we could be in serious danger of closures!”
This news is a sad affair, if the stores can’t provide stock then it will drive consumers towards online retailers, thus having a knock on effect as GAME loses even more custom. We are keeping a close eye on things at OutofLives as GAME is needed on our High Street and will be another loss to us consumers. I personally will miss the midnight launches and finding those hidden gems in stores. That said I won’t miss the constant “do you want to pre-order anything while your here?” question anymore. We hope this isn’t anything more than just speculation and fears of the staff, we almost lost GAME once, we don’t want to lose them now.
This article is speculation based, we have no official word from GAME that closures are imminent.