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UK's Largest Specialist Video Games Retailer Enters Administration

Soulskill posted about 2 years ago | from the increment-steam's-kill-count dept.

Businesses 172

RogueyWon writes "The GAME Group, owners of high street chains GAME and Gamestation, which between them account for a large majority of the UK's specialist games retail market, have entered into administration. In the hours following the Group's entry into administration, hundreds of stores were closed and thousands of staff made redundant. While some of the factors behind the Group's downfall, such as stores located too close to each other and overly-ambitious international expansion, were likely unique to the UK-based company, other factors, such as price competition from supermarkets and online retailers, as well as a reliance on a fickle pre-owned games market, may have wider application."

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172 comments

Gak, the Britishisms in that article were too many (0, Offtopic)

pecosdave (536896) | about 2 years ago | (#39493779)

I'm pretty good at keeping up with British words we don't use (in that way) here in the US but that went too far. "Entered administration" - bankruptcy? I've read up on "made redundant" - BOFH has used that enough I already studied the term. I'm well ahead of the average US citizen on keeping up with those terms but this one really made me think.

Re:Gak, the Britishisms in that article were too m (0)

Anonymous Coward | about 2 years ago | (#39493851)

I think administration is technically different than bankruptcy. If the latter is more like "we have to liquidate all the assets, pay our priviledged debtors, common debtors and then shareholders" the former is more likely "if we carry like this we're gonna go bust, lets give the command to a judge nominated person trying to get a grip with all our liabilities and assets... because we've been very bad at managing". I see it more as raising the white flag and asking the tribunals/state to send someone to help.

Re:Gak, the Britishisms in that article were too m (5, Informative)

DrXym (126579) | about 2 years ago | (#39494001)

In the UK firms can't go bankrupt, they go into administration, i.e. an administrator is appointed to either wind it down, or find someone to buy it, or keep it running as a going concern. GAME is still a going concern, albeit massively downsized. It might ultimately be wound up or it may be that it carries on existing in some reduced form. Closing a bunch of stores was inevitable in any event.

Re:Gak, the Britishisms in that article were too m (1)

gmhowell (26755) | about 2 years ago | (#39494197)

From your description, UK firms most certainly can go bankrupt in the US sense. Chapter 11 bankruptcy reorganizes the ongoing business of the company, and chapter 7 bankruptcy is a liquidation of the company.

So... Sounds like it's just a word/name/vocabulary difference.

Re:Gak, the Britishisms in that article were too m (1)

DrXym (126579) | about 2 years ago | (#39494629)

It probably is analogous. Administration effectively means appointing somebody to run the company in the best interests of the creditors. That might mean winding it up, selling it off or keeping it running as a going concern. It's too early to say what GAME's administrators will do but clearly they saw no reason to keep half of the stores open presumably because they're not making enough money or the rent is too high.

Re:Gak, the Britishisms in that article were too m (0)

Anonymous Coward | about 2 years ago | (#39494739)

Well to give an idea of their over saturation of the marketplace at one point the town of Reading had 3 Game's and 1 gamestation all with a 1/4 mile circle, about 3 years ago it dropped to 2 + 1 then 6 mths ago the gamestation shut and they rebranded a GAME as Gamestation. That is now the only open store but it has almost 0 new stock and for example the PS2 pre-owned section has 1 of it's 4 shelves completely overed in "eyetoy chat" boxes

Re:Gak, the Britishisms in that article were too m (1)

mikael (484) | about 2 years ago | (#39494435)

This isn't the first time that this has happened to a British game store. Back in the 1990's, a local store was set up by a local kid who had left school at 16. The local papers were hyping his store as going up may the major chains like Virgin, Dixons and HMV.

Within six months, the store had gone into liquidation with *everything* in the store being given a price tag for auction. Everything from the company sports cars in the rear car park to the front sign above the high street doors. Even the office desk and the official company directors note pad were up for auction.

  The sad part was that you could see where he and the accountant had analyzed the inventory, the sales trends and price changes only to realize they were loaded with stuff nobody could buy. There was a bargain bucket filled with joysticks, game pads and other accessories.

thing was that you could see where he had done the n

Re:Gak, the Britishisms in that article were too m (4, Informative)

donscarletti (569232) | about 2 years ago | (#39494019)

Sometimes Americans call administration "Chapter 11". This is different to bankruptcy, which is known as "Chapter 7". It's not really good international communication to use chapter numbers from a specific country's civil code, so they instead used the correct English words.

Re:Gak, the Britishisms in that article were too m (5, Informative)

Richard_at_work (517087) | about 2 years ago | (#39494107)

Chapter 11 is significantly less harsh on th business than British Administration - in CH11, a companies board can survive the ordeal, while under Administration they instantly lose everything and leave the business.

In the US, CH11 is used strategically, for example see American Airlines - they waited until they had secured a $8Billion war chest before entering chapter 11, even buying $200Billion of aircraft in the run up to the declaration. Entering chapter 11 allows them to do things like break lease agreements (they had 50 or so aircraft sitting mothballed in the desert because they had reached the end of their useful life, but continuing to pay the leases was cheaper than paying the costs associated with returning the aircraft - but in chapter 11 one of the first things they did was just hand the aircraft back in an unflyable state...).

Chapter 11 is a business tool, while administration in the UK is a severe punishment. Huge difference in aspect.

Re:Gak, the Britishisms in that article were too m (0)

Anonymous Coward | about 2 years ago | (#39494583)

Business tools that basically allow you to cheat you mean? Whats the point in a lease agreement if it can be broken so easily?

Administration isn't a punishment - it's a realistic consequence of failure.

Allowing it to be used the way the US uses chapter 11, would essentially mean that the protections for customers of the business are being abused to the point where they no longer protect the intended recipient.

I though the Yanks were the ones that really believed in 'do or die' business ideals?

Re:Gak, the Britishisms in that article were too m (1)

advocate_one (662832) | about 2 years ago | (#39494657)

yup... just look at how much trouble SCO were able to cause (and still do) when they did a strategic Chapter 11 4 1/2 years ago when they lost a lawsuit...

Re:Gak, the Britishisms in that article were too m (3, Interesting)

asdf7890 (1518587) | about 2 years ago | (#39494967)

In the US, CH11 is used strategically

Administration is used strategically in the UK too. 7Global, a DC/hosting provider did it while we were using their services but didn't tell us. I'm not sure how it was arranged (I think it was a management buyout while in administration) but they were in administration for 24 hours meaning they could walk away from certain contracts and debts. This also nulled our contracts with them, which our clients could have been very unhappy about because that meant we were in breach of our contracts with them by not being able to guarantee things (that were previously guaranteed by proxy via our contract with 7Global). They also moved their entire operation (which went very badly leaving us with no service for days) without letting anyone know the plan (there was a planned maintenance period that night which was down as "working on the server racks") but that is another bitter story.

lt;dr: "strategic administration" happens in the UK too, and quite often in fact but it is usually not widely reported.

Re:Gak, the Britishisms in that article were too m (5, Insightful)

geedubyoo (1980822) | about 2 years ago | (#39494023)

I'm British. The terms "entered administration" and "made redundant" are in normal everyday use in Britain. I think it is reasonable to assume that the writer is British and that it would never have occurred to him that these phrases would be misunderstood by an American. I'm sure it wasn't done just to wind you up*. * I'm not sure if the phrase "wind you up" is used in the US. It means to say something with the intent to provoke.

Re:Gak, the Britishisms in that article were too m (4, Insightful)

ledow (319597) | about 2 years ago | (#39494843)

Not only that, look at the terms themselves.

If you (or your job) has been "made redundant", it means - quite literally - that they no longer have a use for you. It doesn't matter what version of English you speak, that's the meaning of the word. It may not specifically state that would mean losing your job, but the context is there and useful - and differs from "being sacked/fired" quite significantly. It wasn't that they sacked you, they didn't need you any more. It was NOTHING you did wrong. You were simply redundant to the business. We even use terms like "redundancy money" where the business compensates you when it stops your contract because it *COULDN'T* find a use for you any more.

And to "enter administration". That means that some process has taken over to administer the business. Not bankruptcy, because we have that word too and that wouldn't be administration of the business but a final "winding up", but someone is there to administer things - presumably because they can't do it themselves.

Though the terms are not clear-as-day, they are no worse than any other English phrasing and at least hint at what they mean (I'd expect most people to understand them by the context they are used and the inference of the meaning of the words). I don't see why you can't pick up those words from context, to be honest, or just from their meaning - especially when I spend a LOT of my time looking up what the hell certain Americanisms mean because they're not at all obvious (John Doe? Really? You can't just say you don't know their names?).

Company enters Chapter Whatever? What the hell does that mean. The fifth amendment? Eh? Which one's that? What does it say? Amendment to what? Do the other 4 take precedence?

Although the answers are easy to find, they aren't anywhere near easy to infer just from the context given. English is one of the most poetic, cross-culture, verbose and diverse languages. Use it and the facilities available within it, and people can infer what you mean. Numbering everything is only logical if everyone has a reference list of what those numbers refer to and memorises it. But the word "redundant" is present and means the same in both languages - it's just a particular instance of it that doesn't fully explain the implications of your "redundancy" but that the context does.

Don't even get me started on navigation in America. Xing-Ped (Someone had to TELL me what it meant, and that it was "backwards" and I only speak English!) and 49th/50th/51st/52nd street drive me mad. It's abuse of language where it's not necessary, no imagination, nothing to make anything or anyone stand out and not using meanings have been attached to words for centuries.

Re:Gak, the Britishisms in that article were too m (1)

TheRaven64 (641858) | about 2 years ago | (#39494765)

I've read up on "made redundant"

I thought that was international. What do Americans say instead?

Re:Gak, the Britishisms in that article were too m (2)

PopeRatzo (965947) | about 2 years ago | (#39495019)

"I've read up on "made redundant""

I thought that was international. What do Americans say instead?

Divorced.

Not a surprise (5, Interesting)

Patch86 (1465427) | about 2 years ago | (#39493789)

Doesn't surprise me, for a variety of reasons.

As mentioned in TFS, they were crazy when it came to sotre placement. In my town, there were two GAME stores and one Gamestation all on the same shopping high street. There used to be a third GAME in a department store two minutes walk away, and there was briefly a fourth GAME directly opposite one of the current two. They all stocked exactly the same thing, with no great specialisation. What on earth did they think they were trying to acheve?

Another reason- failure to move into the online space themselves. They do do online retailing these days, but they compare poorly to the likes of Amazon. When you're sat at your keyboard, and you open two websites, and one has a betteer range and is cheaper than the other, why would you use the latter? Instead of capitalising on their huge brand presence, they just let themselves slip. their digital download service isn't even run by them- it's just a rebadge of a whole different company's website.

A bigger reason, though, was just that they weren't pleasant places to be. They're competing against souless supermarkets and anonymous online mail-order companies. So what was their solution? Become as souless and supermarket-like as possible. Cram in as many shelves as possible, with no aisle space, no demo machines, no nice displays. Gaming is obviously a hobby which a lot of people take quite seriously, but instead of trying to tap into that sense of a hobbyist community, and trying to become a hub for that (lucrative) community, they just focussed on selling as many things as possible as efficiently as possible- something they couldn't hope to win on, against their competition. Compare and contrast with Games Workshop (seller of tabletop games and models); gangs of enthusiastic hobbyists hang around in there for hours at a time, playing games against each other, organising competitions, soaking up the atmosphere. You can buy Games Workshop models cheaper online or through some of the resellers- but the flagship shop is the place to be, and so is where most people buy their stuff from.

Re:Not a surprise (2)

omglolbah (731566) | about 2 years ago | (#39493831)

A local store recently dropped their whole computer-game area and replaced it with more books and board games as well as expanding their 'props' space.

With the way games in general are shifting to online systems it was a better way to go about it for them. That was the gist of things when I spoke to the owner a while back. There was little profit in it, but it took a significant amount of space. They had not lost any sales by removing the merchandise at all.. Hell, they improved their sales of books as they could keep more in stock.

Of course, Games Workshop goods are still a big part of their store. It is -the- place to go for that.

The only thing most if not all my friends used the local GAME store for was midnight releases... and hell even Elkjøp (think 'best buy' type store) has had midnight releases so they even lost that :p

Re:Not a surprise (2)

delinear (991444) | about 2 years ago | (#39494887)

The article alluded to the one benefit bricks and mortar games stores can offer, unfortunately it's one thing Game never got right. It specifically says game stores are needed so that customers can try before they buy, yet Game and Gamestation where always awful for this. If you were lucky there'd be one or two consoles switched on, more often than not the controllers wouldn't be hooked up so there was no "trying" component, and god forbid you ask them to reconnect them or, even worse, throw in a different game to the one that's looping through the start screen demo... not gonna happen. The stores themselves are cramped, every available space crammed with junk merchandise, the staff waver between jumping on you if they think you're looking at a big ticket purchase like a sale or ignoring you if you have questions about anything else (right up until it's time to pay where they'll offer you five or six point of sale offers you're clearly not interested in).

I genuinely think they should make the stores more like a hangout, big comfy sofas, a whole bunch of consoles (with some kind of hub system so you can choose which games you want to try). They could easily stop people abusing it by limiting the amount of time you can play games (have you create some kind of account in store and then use a system similar to OnLive, give you 30 minutes per title to try it out). There's not really any need to have every available shelf space crammed with copies of games, either - use that space to make the place a more inviting venue for customers. I avoid Game stores like a plague as you really feel like cattle, churned through the store (it's so crammed you can only move in one direction), channeled through the point of sale then dumped out onto the street. I'd rather wait two or three days and save money than subject myself to that. Create a more relaxed, fun atmosphere and people will be willing to spend time in your store and that in turn will lead to spending.

Re:Not a surprise (2)

FireFury03 (653718) | about 2 years ago | (#39493865)

Doesn't surprise me, for a variety of reasons.

As mentioned in TFS, they were crazy when it came to sotre placement. In my town, there were two GAME stores and one Gamestation all on the same shopping high street. There used to be a third GAME in a department store two minutes walk away, and there was briefly a fourth GAME directly opposite one of the current two. They all stocked exactly the same thing, with no great specialisation. What on earth did they think they were trying to acheve?

This one always confuses me. It isn't unique to games shops - go into any city centre and you will find like shops clustered together (here we have a bunch of banks all on the same street, the next street over there are a bunch of jewellers, etc.) I can only assume that it must work, otherwise they wouldn't do it, but I'm at a loss to understand why.

On the other hand, after hearing GAME's previous announcements about their financial problems, none of this surprises me: they appeared to have run the business by relying on regular bank loans to provide their working capital (for buying stock) rather than using their own profits to provide the working capital. One day the banks said "no" to their loan request and they were automatically screwed - they had no money of their own to buy stock. Using bank loans for one-off investments to expand the business is fine, but when you're relying on them on a day to day business for the normal operation of your business, you're putting everything in the hands of the bank with absolutely no guarantee that they won't withdraw their support without notice.

Re:Not a surprise (0)

Anonymous Coward | about 2 years ago | (#39493913)

This one always confuses me. It isn't unique to games shops - go into any city centre and you will find like shops clustered together (here we have a bunch of banks all on the same street, the next street over there are a bunch of jewellers, etc.) I can only assume that it must work, otherwise they wouldn't do it, but I'm at a loss to understand why.

For some speciality stores, clumping together creates a "destination shopping experience". Just a few blocks from where I live are no less than a dozen outdoor adventure stores selling tents, climbing gear, etc. There are very high-end stores and bargain stores and even a cooperative. Pretty much anyone in the city who needs camping equipment and such knows where to go to do some shopping.

Re:Not a surprise (1)

Canazza (1428553) | about 2 years ago | (#39494093)

This is also one of the reasons Woolworths went under a few years ago.

GAME/Gamestation had an outright monopoly on highstreet gaming up until a few years ago when Supermarkets started stocking AAA titles (rather than the usual bargain basement rubbish they used to), and even then Supermarkets are hardly High Street.

In my City, Glasgow, we had about 5 in the City Center alone (including a kiosk in Hamleys Toy shop, which is in the SAME shopping center as a fully-fledge GAME store), and about 8 in total when you count the Out-of-town shopping centers.

Kneecapping half of their stores will still give them pretty much the same presence they used to. I doubt anyone will be put out.

Re:Not a surprise (1)

JosKarith (757063) | about 2 years ago | (#39494159)

We had 2 GAMEs and 1 GameStation within about 3 mins walk of each other here. AFAIK only one of the GAME stores survived the cull. It was ridiculous to double up like that - especially when they didn't have any presence the other side of the city at all.

Re:Not a surprise (0)

Anonymous Coward | about 2 years ago | (#39494399)

They have shut down every GAME and Gamestation in Northern Ireland and the Republic.

That'll put a few people out.

Re:Not a surprise (1)

DomHawken (1335311) | about 2 years ago | (#39494611)

Gaming was the last straw for Woolworths. It started with the decline of music sales (the CD kind) and their move to online. At one time in the 90's, it was impossible to place in the UK top 40 music singles chart without Woolworths stocking your single - they sold that many. Since Woolworths buyers only stocked around 10 new releases in any one week, much of the labels plugging budget was invested in persuading Woolworths to stock theirs. The natural move to online distribution as bandwidth and storage continues to expand exponentially (and obviously the move to cloud-based distribution systems) will naturally kill of the current stores that don't either move fast to transition to online, or continue to specialise in niche markets that retain enough demand.

Re:Not a surprise (1)

AlecC (512609) | about 2 years ago | (#39494963)

My local Woolworths has been replaced by a Wilkinson which is just about exactly the same as Woolworths was except for no attempt to sell records, games, and videos. Woolworths had a perfectly good business dating back a century - cheap household goods. Then they lucked into a windfall with music, and later video. When both the net and specialists like Game (dying, as reported, and HMV (in trouble) destroyed this business, instead of going back to their traditional strengths, they tried to keep the dead business by giving it more and more store space. People lost sight of the household goods behind a wall of games and DVDs. And the traditional business is relatively immune to the net: delivery represents too large a fraction of the cost of many items, and instant access to stuff you want for a job today has value.

It works with some competitors (1)

Sycraft-fu (314770) | about 2 years ago | (#39494171)

Car sales are an area you often see it. Car dealers will cluster together. Reason is when people are shopping for a car, they are often willing to shop at multiple places and they are more likely to go to you if you are in an area where one goes to buy cars. If you are the one guy out where there's nothing else, you probably get visited less.

However what it doesn't work for is the same store. You also never see that. Competing with yourself is stupid. So while a Walmart might move in next to a Target to try and compete, it is unlikely a Target will open up next to a Target. If they decided they needed more inventory, they'd expand the store, not create a second store that mirrored the inventory of the first.

So ya you see plenty of places with lots of the same, but from different companies. Restaurants are some of the biggest. I work on campus and there's a whole street of restaurants next to it. However there are no duplicates. There is only one of each.

Big successful chains do a good bit of research on how tightly they should pack their stores. You want enough so that you are always easy to get to, so that people don't go to a competitor because you are inconvenient. However you don't want to compete with yourself. You don't want stores operating at below capacity because there are too many near each other.

Re:It works with some competitors (2)

FireFury03 (653718) | about 2 years ago | (#39494321)

However what it doesn't work for is the same store. You also never see that. Competing with yourself is stupid.

Except you do see it, all the time, it's really really common. In pretty much any city centre in the UK it is common to see Blacks and Millets next door to each other - they are both "outdoor gear" stores owned by the same company selling pretty much the same stuff (ok, so they started off as separate companies, but they've been the same company for years and years and have ample opportunity to thin the shops out and yet they haven't).

In the city I live in, H. Samuel (Jewellers) have 2 shops about 200 metres apart. Santander (bank) have 2 shops on the same road (again, these didn't used to be both Santander, but they have had ample opportunity to close one of them down and yet they haven't).

It also applies to shops owned by different companies that aren't the sort of shop to see people "shopping around" before buying - down in the local town centre, we have Tesco Express opposite Sainsburys Local - both "grocery convenience stores". No one is going to browse one and then browse the other before buying. It would seem more sensible to space the stores out a bit so that there is a good reason for people to go in one instead of the other (it's closer to them). Same just up the road - there's a Coop next to a Premier (again, grocery convenience stores).

Re:It works with some competitors (1)

MrAngryForNoReason (711935) | about 2 years ago | (#39494745)

we have Tesco Express opposite Sainsburys Local - both "grocery convenience stores".

This is a deliberate marketing move. When Tesco started opening up Express stores all over the place Sainsburys had to fight back. The reason being that if you get used to nipping to a Tesco Express to buy convenience items you are more likely to shift your main weekly shop to Tesco due to the familiar product range, loyalty card etc. By opening Sainsburys Local stores right next to them they can pretty much guarantee that people who are already Sainsburys customers will choose their store instead of going into Tesco Express.

Even if the store loses money it is preserving 'mind share' and maintaining their customer base. It does have the side effect of killing off the small non-supermarket convenience shops as they can't compete with the branded presence of the supermarkets.

Re:It works with some competitors (4, Insightful)

MrAngryForNoReason (711935) | about 2 years ago | (#39494759)

in the UK it is common to see Blacks and Millets next door to each other

While they are both Outdoor equipment/clothing retailers Blacks and Millets were aimed at very different markets. Millets was aimed squarely at family campers and casual hikers, whereas Blacks was more specialised and aimed at serious hikers, campers, climbers etc. The seperate stores allowed them to target their stock and marketing at their particular markets more successfully.

This kind of differentiation is important when you have very disparate groups of customers. Serious hikers/campers/climbers are pretty snobby about their gear so the product ranges they demand are higher end and higher price, the kind of stuff that puts off casual shoppers.

Of course in the end both stores have suffered from the prevalence of big warehouse style outdoor equipment stores that have cheaper prices and enough space to effectively service both markets. Millets is now effectively dead and Blacks is seriously struggling.

Re:It works with some competitors (1)

AlecC (512609) | about 2 years ago | (#39494995)

Keep an eye on those Santanders. One will close soon.

The reason the keep both for a while is to let customers of the old brands get used to the new brand, and think of themselves as customers of Santander, before closing one. If you tell an Abbey customer to leave their old Abbey branch and go to a freshly rebadged Bradford & Bingley, they may ask themselves if they might not be better elsewhere. If you change the name, but assure them that all else stays the same, then later change the branch while assuring them that all else stays the same, they are much less motivated to jump ship. The Frog in a Saucepan effect. About 2-3 years after both have been rebadged Santander, one will close.

Re:Not a surprise (1)

KDR_11k (778916) | about 2 years ago | (#39494223)

Clustered stores make sense as long as they're different companies, after all they're competing with each other and when they cluster that's usually a sign that the area has a lot of people looking for that kind of store. Having redundant stores or banks of the same company is where it gets weird.

Re:Not a surprise (1)

lattyware (934246) | about 2 years ago | (#39494327)

The main issue was they bought other companies, and didn't close any stores. They bought out Electronics Boutique years ago, and then GameStation slightly later. They turned the EB Games stores into Game stores, but kept GS as a separate brand. This lead to you often having 3 (sometimes more) stores owned by game very close together.

Re:Not a surprise (2)

FireFury03 (653718) | about 2 years ago | (#39494337)

Clustered stores make sense as long as they're different companies, after all they're competing with each other and when they cluster that's usually a sign that the area has a lot of people looking for that kind of store.

It makes sense where the stores have different stock, so people want to shop around to figure out which thing to buy: if you're buying a big ticket item like a car, a house, etc then you're going to want to do some serious browsing before putting down some money, so clustering estate agents, car dealerships, etc makes sense.

On the other hand, a cluster of computer game shops, all selling exactly the same selection of games, aren't going to attract a lot of pre-purchase browsing: you know that the product you're looking at is going to be identical in the next shop, and the shop after that, so you're probably just going to buy in the first shop you come to. If you do shop around first, then you're just looking for the best price - you're not shopping around to see which product best suits your need. Something shops do not want to do is compete with each other on price alone, because this just causes a price war which lowers their profits, and this is exactly what you'll get if you cluster these types of shops. On the other hand, if you spread out, you're competing on other factors than just price - people are going to go into the shop that's most convenient and probably aren't going to trek across town to check if the next store has the same thing for a few pennies less.

Re:Not a surprise (1)

delinear (991444) | about 2 years ago | (#39494979)

Not to mention the shops are awful for browsing. What they need is some system where I can pick up a game I've not seen/heard about, scan it at a booth and pull up gameplay video, reviews, etc, even be able to try it out before I buy. Having 20 copies of an identical empty box with three lines of blurb and an artist rendition of the game tells me nothing as a potential customer. They should be doing more of what tabletop game stores do. Run game nights with leagues and competitions, help people connect with other local gamers who enjoy the same types of games, turn it from somewhere you only go if you want the game right now and everywhere else on the high street is sold out to somewhere you actively want to go and spend time. They could do most of this with volunteers (give them some kind of loyalty rewards/discount vouchers for helping out) and it needn't cost them much at all. That's how a bricks and mortar game store differentiates itself from internet/supermarket stores. Cramming people in like cattle and filling all available space with stuffed Yoshi dolls isn't going to cut it.

Re:Not a surprise (1)

mikael (484) | about 2 years ago | (#39494251)

Easy. When people go shopping for one item, they usually want to buy a complete outfit. Like buying a new suit with matching shoes, tie, shirt and cufflinks. Same with necklace, earrings and rings. Usually each store will specialize in one particular combination of material like gemstones or metals, and recommend the other shops for other items.

Re:Not a surprise (1)

Shazback (1842686) | about 2 years ago | (#39494783)

This one always confuses me. It isn't unique to games shops - go into any city centre and you will find like shops clustered together (here we have a bunch of banks all on the same street, the next street over there are a bunch of jewellers, etc.) I can only assume that it must work, otherwise they wouldn't do it, but I'm at a loss to understand why.

The reason is quite simple : Say in a town there are four shops selling kitchen goods. Two (A & B) are next to each other, whilst the other two (C & D) are in other districts. If you believe all four stores have the same probability (p) of having the type of crockery you wish to purchase, and that their prices will not be significantly different, then where will you go? To the place where A & B are, because you have a 1-(1-p)^2 probability of finding the goods, which is greater than the probability for either C or D. This means that A + B will actually have more potential customers than C + D. Increased potential customers means either prices can be slightly higher (more profitable) or more sales can be made (more volume). Thus, when E considers opening a store for kitchen goods, chances are he'll decide to establish close to A & B. Thus he will organically benefit from the customers who know A & B, rather than relying on advertising/etc. to get potential customers in front of his wares. Eventually, customers will know that the chances of finding a "better deal" at C or D than at A+B+E are so small that there's no real point in going there unless A+B+E don't have the desired good (in which case chances are C and D don't either). Ergo, C & D have lower margins & lower sales volumes, and most likely aren't profitable, which forces them to close.

The only way to counter this trend is to establish a store with a sufficiently large goods selection that the probability of finding the desired good in this store is vastly superior to any other store, whilst at the same time being able to control prices. This is of course a difficult equation, one that has been tackled with moderate success by department stores and large retailers. When F, a well-known department store that can stock more kitchen goods than A+B+E is looking to establish itself in the town, it doesn't really need to worry about establishing next to A+B+E, because not only does it stock goods other than kitchen goods, but it wants to have a "pseudo-captive" market, where people can't really just pop across the street & compare prices with another store. The longer/harder such a comparison is, the easier it is to close sales, whilst attracting people with loss-leader deals that reinforce the advertising image of unbeatable prices in all categories and types of product (which is sometimes possible given that F is a bulk buyer, unlike A+B+E).

So, this makes it quite easy to see why Jewelers or Banks work like this (department stores haven't really cracked those markets in the UK). However, this logic doesn't mean you can "create" customers by establishing a new store next to one that already exists. In the previous example, if C opens two new stores (C2 and C3, we'll call the first store C1), but doesn't increase its stock range (or improve prices), then customers will quickly learn that the probability of finding the desired in C1+C2+C3 is not better than it was in C, and is still less than A+B. So after a short spike, C1+C2+C3 will still have fewer potential customers than A+B. But now, C is spending three times as much money in rent, etc.

It's almost never a good idea to have control over several shops in a very limited district, unless the number of potential customers is so great that one store can't cope with all of them. The shops compete with each other, customers quickly understand it's not really "two shops" but "one, divided", so they're not more likely to find a product or get a better price by going to this district than to another one... And of course the business is paying more for stock (even with the most efficient centralized dispatch management system), more for employees, more for rent, more for in-store equipment... Basically, it's a very, very shitty idea. In the Parent's example, there were 5 GAME(station) stores within at most 5 minutes walk of each other. Except for the people hunting for bargain bin games, customers would know that the prices were the same in all 5 stores, the product selection was the same... Basically, it meant they had no more reason to go there than to the other side of town where there is a Virgin Megastore with a video games section. The only difference was that Virgin wasn't paying several times over for all the expenses, and was able to attract additional potential customers by selling other goods than just video games.

tl;dr GAME was stupid and it's stupid to own shops close to each other, but it's good to own a store near to similar stores.

Re:Not a surprise (1)

TheRaven64 (641858) | about 2 years ago | (#39494797)

This one always confuses me. It isn't unique to games shops - go into any city centre and you will find like shops clustered together (here we have a bunch of banks all on the same street, the next street over there are a bunch of jewellers, etc.) I can only assume that it must work, otherwise they wouldn't do it, but I'm at a loss to understand why.

It's not a new phenomenon. Roman cities were actually designed like this, with all of a particular type of shop being on the same street. You can still see some street names that are relics of this, being corruptions of the latin for 'street of butchers' or 'street of bakers'. It made life easy for shoppers, because if you wanted to buy meat, you went to the street of butchers. If one butcher didn't have what you wanted, you'd go to the next one.

The same logic still applies today. If you have shops selling similar things nearby then one will get business from people who go to the other and find that they don't stock quite what they want. They will get more business in aggregate because people wanting to buy something that they sell will go to that bit of town, knowing that at least one of them will sell what they need.

It doesn't work when you have two identical shops though. You can have two branches of the same store, but they need to specialise (e.g. have one focus on console games and the other focus on PC games).

Re:Not a surprise (1)

delinear (991444) | about 2 years ago | (#39494929)

I wonder if it's to do with capacity at peak times. Perhaps having two or three stores during their peak run up to Christmas generates enough additional profit (or at least they were hoping it would but it sounds like they miscalculated) to cover the surplus stores for the rest of the year (and since they can't just rent and outfit the stores they need for those three months, it's better to have them open than closed so long as they're breaking even). The Game and Gamestation proximity thing is easier to explain, as they were originally competitors and Game bought Gamestation out. Likely they had sufficiently long leases on some of the Gamestation stores that, again, it made more sense to keep them open and breaking even than close them but still pay rent.

Re:Not a surprise (2)

AmiMoJo (196126) | about 2 years ago | (#39493931)

A friend of mine works in the industry (for Rebellion) and he said that publishers were annoyed about them selling second hand games. Obviously a second hand game produces no revenue for the publisher, and yet Game wanted special deals on new games too. Publishers declined and they ended up not being able to compete with the discounts offered in other shops and online.

I always found Gamestation a nice enough chain of shops, a bit crowded perhaps but with a good selection of gear and reasonable prices. I think if Game hadn't bought them they would still be going, but instead they got dragged down too.

Re:Not a surprise (1)

samjam (256347) | about 2 years ago | (#39494087)

I wonder if publishers requiring purchasers of second hand games to re-register and pay some more money in order to use the second-hand game contributed to the downfall of Game.

Maybe second hand game sales didn't help the publisher directly, but maybe it helped their channel, and maybe it helped fund the purchase of new games for those who sold the second hand games or traded them in when buying new games.

How bad were these unintended consequences for Game?

Re:Not a surprise (1)

KDR_11k (778916) | about 2 years ago | (#39494253)

Rebellion is probably more impacted by that as their games lately were pretty weak and people are more likely to trade them in for the meagre amount of money that stores like GameStop offer. On the other hand you got companies like Nintendo whose flagship games (not all games but their biggest sellers like Mario Kart or New Super Mario Bros) still cost full price even 5 years after release and few used copies are in circulation because demand far exceeds the trade-in supply (also the trade-in values remain high because the demand is there, with other games those values collapse in a matter of months).

Re:Not a surprise (1)

Nursie (632944) | about 2 years ago | (#39494709)

Second hand games offer no revenue to the publisher, true. But stopping them will also affect sales of new games.

People, especially kids, only have so much to spend on games. If they can't sell old games then they won't put that money towards a new purchase. People who were buying second hand will now also be buying new, which will offset that to some extent, but they'll be buying less as well.

The turd in the punchbowl were the likes of Game that gave sellers 5 bucks a game, then turned around and resold for 5 bucks under the new price. If that business model fails then so much the better. However I have a huge, huge moral problem with the game industry's attempt to kill second hand sales.

Re:Not a surprise (4, Interesting)

mjwx (966435) | about 2 years ago | (#39493955)

GAME are also in Australia. They want A$80-100 per game (GBP 60-70 ish) I can order the same games from Zavvi for GBP 30. Same with EB games. A lot of Australian gamers have taken to importing games and I dont think it will be long before retailers like JBHiFi test the waters of direct import on games and movies (they already do it on cameras). But GAME and EB wont bother, they're locked into the old way of doing things with local distributors charging inflated prices and as a result are dying slowly.

GAME and EB Games will join the other retail dinosaurs like Harvey Norman in retail extinction.

So what was their solution? Become as souless and supermarket-like as possible. Cram in as many shelves as possible, with no aisle space, no demo machines, no nice displays

And staff it with people who know nothing about games.

EB games Australia have gone one step further and play annoying techno way too loud. If I do buy a game locally (I.E. I want it today and am willing to pay the premium) I'll generally walk down the street to the nearest JB, no music, easy to find stuff and slightly cheaper.

Re:Not a surprise (2)

snookums (48954) | about 2 years ago | (#39494265)

The EB games at Broadway in Sydney actually had some real gamers on staff - at least for a while. I had a good chat with a guy there about where to buy retro games (PS1 and earlier stuff) and he seemed knowledgeable and interested.

The retial price of games here is crazy though. It's a relic from the days of poor exchange rates. The dollar went up 50% in value, but the price of games stayed the same. It doesn't surprise me that physical game stores that don't work hard to add value are in trouble though. Most people evaluate games through reviews and downloadable demos - not by browsing a shop and reading box covers. Even if prices were comparable to online, the stores need to do more with in-store events, playable demo boxes, maybe the odd LAN party. The kinds of things that pen-and-dice and miniature gaming shops do.

Re:Not a surprise (1)

mjwx (966435) | about 2 years ago | (#39494501)

The EB games at Broadway in Sydney actually had some real gamers on staff - at least for a while. I had a good chat with a guy there about where to buy retro games (PS1 and earlier stuff) and he seemed knowledgeable and interested.

Most stores just hire bog standard retail teens. They are more interested in getting the soccer mum through the door with her 6 whining kids.

BTW, when did the PS1 become retro? (blows into cartridge and shakes walking stick at youths)

Re:Not a surprise (1)

Nursie (632944) | about 2 years ago | (#39494713)

About ten years ago, IIRC!

(/loads head alignment tape into commodore 64 tape drive...)

Re:Not a surprise (1)

Nursie (632944) | about 2 years ago | (#39494719)

I just ordered Ninja Gaiden 3 (yeah, I know, it's supposed to be bad, but I liked the last two) from amazon US for 56 US bucks. EB wanted 98 AUD.

Steam and some other online game distributors also play this trick, ripping off the Australian market, and it can be harder to work aroud them if you don't have a foreign credit card.

I was just about to post similar (1)

goldcd (587052) | about 2 years ago | (#39494097)

Acres of empty boxes on display with all the stock stashed in couple of drawers at the back. Actually that's my only disagreement with you, I don't think they did anything efficiently.
Last time I went in, was to have a look at a Vita. I knew it was cheaper online, but hadn't (and still haven't) actually got my hands on one to play with it. I'd assumed due to the window sized poster, there'd be a demo pod inside, bundle deals etc. When I went in... well there was a big poster listing the not-very-good-deals, but no Vita to prod. Eventually I spotted a guy just standing holding one, I patiently 'hovered' as he chatted to the sales-guy who he seemed to know. Once he'd had his fun, Vita gets handed back to the sales-guy, who just walks off and stashes the Vita back in the storeroom leaving me standing alone on the shop floor.
If they'd wanted to survive they should have just tried something other than just not-beating the supermarkets on the price of new games, or not-beating ebay/amazon for choice/price of used games. Maybe look to see how physical book stores are hanging in there - maybe not a cafe, but some reason to wander in - maybe just a couple of arcade cabinets like the old indies used to have. Maybe let staff post their recommendations for 'classic, but overlooked' games. Ensure if somebody is holding a game box, somebody appears next to you asking if they could boot it up for you? None of this would have cost anything and to see them not even try as they crashed into administration... Oh they deserve it.
Maybe this is all for the best. Once we've removed Game and the high street is no longer saturated with mediocrity, smaller chains and indies may return and offer something better.

Re:I was just about to post similar (1)

SuricouRaven (1897204) | about 2 years ago | (#39494377)

"Acres of empty boxes on display with all the stock stashed in couple of drawers at the back."

Common anti-shoplifting measure.

Re:I was just about to post similar (1)

samjam (256347) | about 2 years ago | (#39494671)

It's now seen to have been important for Game to have noted that anti-theft alone is not the same as pro-sales, as goldcd points out nicely.

Re:I was just about to post similar (1)

petermgreen (876956) | about 2 years ago | (#39494637)

Once we've removed Game and the high street is no longer saturated with mediocrity, smaller chains and indies may return and offer something better.

IMO you'd have to be pretty crazy to open a game store at this point, afaict most games stores make their real money on preowned games but many PC games already have anti-resale measures and console vendors are looking in that direction too.

Re:Not a surprise (2)

RogueyWon (735973) | about 2 years ago | (#39494519)

Yes, I think you've got a good point about the condition of the stores. I've done a couple of fairly lengthy journal articles about the collapse - one on the causes here [slashdot.org] and one on the repercussions here [slashdot.org].

I think the key thing for me is how little consideration GAME's management gave to what their key strengths ought to be set against supermarkets on the one hand and online retailers on the other.

Re:Not a surprise (1)

Registered Coward v2 (447531) | about 2 years ago | (#39494911)

Gaming is obviously a hobby which a lot of people take quite seriously, but instead of trying to tap into that sense of a hobbyist community, and trying to become a hub for that (lucrative) community, they just focussed on selling as many things as possible as efficiently as possible- something they couldn't hope to win on, against their competition. Compare and contrast with Games Workshop (seller of tabletop games and models); gangs of enthusiastic hobbyists hang around in there for hours at a time, playing games against each other, organising competitions, soaking up the atmosphere. You can buy Games Workshop models cheaper online or through some of the resellers- but the flagship shop is the place to be, and so is where most people buy their stuff from.

I wonder if the video and board / miniatures gamers represent two vary different markets, because of their two very different social aspects.

Miniatures and board games almost always require an opponent and face to face play to be enjoyable; much of the fun is in the interaction and, with miniatures, seeing how others have painted them and showing off your creations. Rules are to be argued over, historical authenticity debated, and playing fields to be created. In short, it is a very social activity, much like as card games, bowling, etc. where the game is only one part of the experience.

Contrast that with video games - which often are a solitary experience or one that can be done via the internet; there is no need for everyone to be physically present to have much the same game experience. While many games can be modded, that is not the normal experience; and most games provide a preset, (generally) unchangeable set of rules that govern play. The game is the entire experience, and thus much less of a social one. As a result, getting it as cheap as possible is much more valuable than with mixtures and board games, since there is no (or little) social karma, if you will, associated with the game.

As a result, Gamer's Workshop is a mecca for those gamers (and a cool one, go there whenever I am in London); and video games are sold on shelves in whatever store thinks that can make a few bucks off of them at the register.

Translate (0)

Anonymous Coward | about 2 years ago | (#39493791)

I'm guessing this translates into US english as 'downsizing' - ?

Re:Translate (3, Informative)

arse maker (1058608) | about 2 years ago | (#39493811)

I think administration means the same thing. The company is no longer running its business. Someone else has been brought in to run things either to fix the problems or bring it into bankruptcy.

In most modern countries its illegal to trade while insolvent.

Re:Translate (2)

Sique (173459) | about 2 years ago | (#39494423)

In most modern countries its illegal to trade while insolvent.

Not so. In most countries I know of, a court appointed administrator is then responsible for the company, and it's up to him to reach an agreement with the creditors how to proceed. The main reason behind the whole insolvency procedure is to avoid conflicts with and between the creditors. They should be able to recoup as much as possible of the outstanding debt, and their demands against the debitor are ranked in a law defined order. If the counsil of creditors finds that reorganizing and getting on with the business is in their best interests, the insolvent business will carry on with the trade, sometimes firming as "in insolvency" or "in liquidation" to warn potential customers and suppliers.

Not competitive (0)

Anonymous Coward | about 2 years ago | (#39493817)

the other day I was looking for Demon's Souls for PS3, New or pre-owned.
I found it pre-owned for 24 GBP when new from Amazon was less, around 18... Now please understand why to me their administration is _not_ surprising...

Re:Not competitive (3, Informative)

pecosdave (536896) | about 2 years ago | (#39493907)

I've been to a Gamestop here in the US, a used copy of a game was $14 and the new one was $12 in the same store and the clerks still tried to pursued me to buy used. They were unable to give a satisfactory reason beyond their profit margins are better (oh, and it's worth more customer loyalty points).

Re:Not competitive (1)

mrpacmanjel (38218) | about 2 years ago | (#39494109)

This was my biggest problem with Game - used games were waaayyyy overpriced - they dropped their prices last week(?) and funnily enough the shelves seem to empty pretty quickly.

I still think there is a market for a specialist games store. Maybe have a few consoles and allow gamers to try before buy, if possible legally download content onto media (if future consoles will still use it) and a decent online store will help too.

The business failed due to bad management.

Re:Not competitive (1)

RogueyWon (735973) | about 2 years ago | (#39494669)

I've seen the exact same thing in GAME stores in the UK. What generally happens is that there's a promotion running that reduces the price of new copies of the game - but the head office computer that makes pre-owned pricing decisions (any leeway was taken away from store managers some time ago) failed to realise that it needed to reduce the price of pre-owned titles as well.

I've seen staff confused by and apologetic over it - but there's nothing they can do about it.

Black employee humour (5, Funny)

TwentyCharsIsNotEnou (1255582) | about 2 years ago | (#39493825)

On the window of a Game store in Ireland: http://i.imgur.com/BQ8iD.jpg [imgur.com]

Re:Black employee humour (0)

Anonymous Coward | about 2 years ago | (#39493871)

Why the hell was this downmodded?

Employee black humour (3)

TwentyCharsIsNotEnou (1255582) | about 2 years ago | (#39493971)

Hmm.. maybe the word order in my original title could have been better... oops.

Re:Employee black humour (1)

Surt (22457) | about 2 years ago | (#39494155)

Yeah, I suspect you got hit reflexively for that. Maybe a kind mod will correct the issue. Your post is quite relevant. Interesting and/or funny.

Good things too (1)

Max Romantschuk (132276) | about 2 years ago | (#39493841)

While it's sad when people have to lose their jobs I do feel that it's mostly a good thing that online marketplaces are taking over the traditional store model for games (and other software too). By far the most interesting games I've played lately have been made by small independent teams. Lower barriers for entry into the business makes it easier for independents to get a shot.

Unfortunately, the online marketplaces, especially on consoles, are also in effect a monopoly on the platform. But that will likely change with time.

Digital distribution and death of second hand (4, Interesting)

gweilo8888 (921799) | about 2 years ago | (#39493857)

I would wager that, as much as it is to do with GAME's own failings, it is also down to two other things: the industry-wide switch to digital distribution (Steam, Xbox Live Marketplace, Playstation Store, Wii Shop Channel, App Store, Google Play, etc.), coupled with the engineered death of second-hand sales caused both by digital distribution and the game publishers and console makers alike actively taking steps to prevent resale, effectively turning your "purchase" into a "rental".

Re:Digital distribution and death of second hand (0)

Anonymous Coward | about 2 years ago | (#39493881)

I don't know about you, but I get all of my used games off Craigslist, eBay, or occasionally Amazon. Even the big electronics stores are starting to get in on it now. No markup; I get a cheaper game, and the seller gets more money. I'm guessing similar things exist in the UK, no?

Re:Digital distribution and death of second hand (1)

Anonymous Coward | about 2 years ago | (#39494421)

UK PC gamer reporting in. Game ceased to be relevant to me >10 years ago.

[1] There's never been much of a second-hand market for PC games - at least in my little backwater. As a result, the local Game (which at the time was Electronics Boutique) concentrated on console games. The PC section was then squeezed into a single small display.

[2] Amazon. About 8-9 years ago Amazon would regularly undercut the release prices on the high street and the free delivery option usually gets you the game the day after it's released. Since there's next to no time penalty on buying online and it's cheaper, why the hell not?

[3] Subsequently, GOG and Steam. I've only bought one 'new' game on Steam directly (normally getting the games via Amazon but which tie into the Steam account), but I'm growing to appreciate the offline backup of your games. I'm in a cabled network area, so the thought of downloading ten gig of game doesn't pose a particular problem.

For all of the above reason, the whole audience Game was attempting to cater to didn't include me. I'm sad to see anyone lose their jobs as a result of this, but my experience of the closure will pretty much be, "and nothing of value was lost".

Re:Digital distribution and death of second hand (0)

Anonymous Coward | about 2 years ago | (#39494997)

GOG allows you to download a local copy of the game (and actually encourage you to do so). No DRM either

Re:Digital distribution and death of second hand (2)

Xest (935314) | about 2 years ago | (#39494123)

This WAS part of GAME's own failings.

When I bought Dawn of War II from them a few years back I complained to them about the fact I had to activate via Steam, and specifically that Steam wasn't letting me activate at first. I pointed out that the whole reason I bought a physical copy was so that I didn't have to deal with stupid online systems restricting what I could do with a product I'd paid for. I complained because whilst there was mention of activation, there was no mention that I'd have to create accounts and give details to both Valve, and Microsoft because it used Steam for DRM, and Games for Windows Live for other features.

I pointed out quite clearly at the time that at very least they should better advertise what the requirements and restrictions would be of not using my product, but importantly questioned why they were allowing companies to get away with it. A key point I made is that it's insane that they're selling a product that forces their customers to go to their competitors digital stores - Steam, and Games for Windows Live.

Their response was the usual games industry blurb about DRM is for my own good, and how it protects me from myself and how it offers me a superior product and all that shit.

So excuse me if I can't help but feel "I told you so". They were complicit and supportive of the rise of DRM, of the rise of systems that block second hand sale of games, and that generally remove consumer rights.

They can't whinge about how they've suffered a tough time from these systems, they were fundamental to their creation. They were fundamental to the transition to these systems because they were selling and defending the tools that made this happen. They literally signed their own death warrant, despite being warned of the future that awaited them.

They decided that the people they pay (publishers) were their customers, rather than the real customers - the people that pay them.

Re:Digital distribution and death of second hand (0)

Anonymous Coward | about 2 years ago | (#39494821)

This may seem like a shameless plug but I also got sick of DRM games and found a site where a small team works hard to bring back all the classics DRM free and are working on getting hold of some more recent titles. This is the direction I would like the game industry to take so i support them.. Take a look www.gog.com

DD isn't near to killing retail (1)

Sycraft-fu (314770) | about 2 years ago | (#39494195)

It'll probably happen, but it is a long way off. People who use it tend to think it has since we tend to switch over. I rarely buy retail games these days, DD is too convenient. However that leads to a skewed perception. The majority of sales are still physical. Even for titles that are available DD, it is still mostly physical. Stardock says about 4:1 physical to DD for them.

Then you take the fact that many titles aren't available digital on consoles, and consoles are big markets. PC gamers sometimes forget since effectively every PC game is available from at least one (and usually all) of the DD services. Not so on consoles. The big games are usually retail only. Take COD MW3. Massive seller, did like a billion in sales. Not available on Xbox Live Market.

There's still plenty of retail game sales, just not enough for a monkey-fuck retarded amount of games only stores.

Re:Digital distribution and death of second hand (1)

KDR_11k (778916) | about 2 years ago | (#39494203)

Steam, sure but the others aren't replacements for retail stores as they offer completely different products.

Re:Digital distribution and death of second hand (2)

gbjbaanb (229885) | about 2 years ago | (#39494447)

There was one more aspect to this, the banks. RBS (yewp, thwe bank that had to be bailed out and is now owned by the UK taxpayer) didn't want to allow full use of the credit facilities it already had in place (games retail is a very cyclic business, and we;re just about at the bottom, waiting for new consoles), which made suppliers very nervous about supplying games to Game. This meant Game failed to get any revenue from big titles such as Mass Effect 3, and this pushed it over the edge.

RBS than received a takeover offer from at least 1 other group, which it rejected. So now RBS are busy making fees from splitting it up, whilst jobs are lost.

Digital distribution isn't as big a deal as many think - there are plenty of places that don't get enough download to get a copy of the latest game, even if Steam wants you to buy from them exclusively. Then there's the hardware that is best bought direct from a shop (usually just before christmas).

The 2nd hand sales thing - this is something the game publishers want to see dead, so maybe EA et al are happy to see Game go.

Re:Digital distribution and death of second hand (2)

Zarjazz (36278) | about 2 years ago | (#39494569)

I used to work for GAME many many years ago in their digital division. We had the developers, network infrastructure, industry clout (at the time) and the strategy to create Steam before Steam even existed. We were incredibly motivated to do this, basically it was why we'd all been hired. We all knew digital distribution was the future.

In the end the then board decided "forget the internet, we ship boxes". The entire digital team was disbanded and moved to other departments. Just one of many, many mistakes they made but from my personal perspective a bloody huge one!

on the other hand .. (-1)

Anonymous Coward | about 2 years ago | (#39493911)

but who cares though ? apart from the ill-educated spotty chav teenagers ?

I'm a little sad about it really (0)

Anonymous Coward | about 2 years ago | (#39493919)

I always liked the Game stores it's probably because in Belfast there really is nowhere else that keeps a half decent selection of titles, I've had a look in a few shops like Sainsburys and HMV and seen only a few titles people mostly already will own. I'd much rather have physical copies than digital especially when my newest system a Sony Vita has such tiny memory cards.

I hope another chain can fill the void that is left or at the very least other astores start to increase their range of titles to fill the gap.

Re:I'm a little sad about it really (1)

1s44c (552956) | about 2 years ago | (#39494571)

Amazon has already filled the void. It's sad to see this company go bust but the simple truth is that Amazon has compelling cost advantages over any high street store.

600 jobs lost already (1)

Dark$ide (732508) | about 2 years ago | (#39493929)

There's a large number of businesses failing in this way in the UK right now (Peacocks went bust about 3mths ago). GAME have gone under with debts of £180M. They claim it's due to the rise of the online retailers (as if they didn't see that coming).

It's going to have a massive effect on unemployment in Basingstoke. The only good thing is that my daughter didn't get a job at GAME when she went for an interview there about 18mths ago.

Actually many didn't (1)

Sycraft-fu (314770) | about 2 years ago | (#39494219)

A lot of game retailers really didn't (and some still haven't) noticed DD as a growing thing. An example would be Gamestop. You'd think they'd have been in on this from the fairly early days. Their whole business is games so it would be highly relevant. Well, no they had no DD presence and ignored it until it was already huge. They are in it now, but because they bought Impulse from Stardock. It was an already established DD service, quite an old on in fact (Impulse grew out of Stardock Central which came out in 2001, and that was a consolidation of two earlier Stardock DD services). Gamestop just bought it and now runs it.

In Australia... (4, Insightful)

pjr.cc (760528) | about 2 years ago | (#39493941)

Not sure what GAME uk's demise means for the australian game line, but i keep wondering how they *STAY* in business. They are consistently higher then everyone else simply for price.

Consider their biggest competitor in the retail market is probably a place called JB hifi, and in shopping centers they're often so close (physically) together that you can see the big tags advertising their price for games (Specially up coming and new release ones). Yet, GAME au's prices are always more expensive.

When they go out of business in AU, I will not be supprised. I've bought games from them (but only second hand ones, and at most 3 - typically jbhifi is cheaper for those as well). But AU's model can be summed up in 3 links:

http://www.game.com.au/diablo-iii/pc-games/DIABLO3PC [game.com.au]
http://www.jbhifionline.com.au/game/pc-games/diablo-3/654000 [jbhifionline.com.au]
http://www.game-lane.com.au/pc-mac-games/2782-diablo-iii-3-pc.html [game-lane.com.au]

To me, in AU, its not "how did they go out of business" its "how do they stay alive?".

Re:In Australia... (1)

Zeussy (868062) | about 2 years ago | (#39494935)

MCVPacific is running a story [mcvpacific.com] on what the Australian GAME is trying to do, to save it's hide.

GAME was crap (2)

DrXym (126579) | about 2 years ago | (#39493983)

GAME was a spinoff of EB Games and shared the same mentality - high retail prices and a propensity to stiff customers who traded in or bought second hand. GAME took over its main rival Gamestation and got so big in Britain that the average medium sized town / city might have 3 or 4 stores belonging to one brand or another often across the road from each other.

So you have an (over) saturation of stores in prime rent locations selling a commodity, poor customer loyalty thanks to GAME's own business practices, a recession, and increasing competition from supermarkets, online stores and digital downloads. GAME didn't bother responding in any meaningful way to any of these threats and so it lost a lot of money and went bust. It sucks for the employees but it really isn't a surprise that it happened.

Going into administration is probably the best chance it has of surviving. The creditors can cut the store down to size which might ultimately whip it into a survivable shape.

Re:GAME was crap (1)

Anonymous Coward | about 2 years ago | (#39495011)

GAME was a spinoff of EB Games and shared the same mentality - .

No - Not really. Game started as FutureZone which got into difficulty in about 1995. At that point EB in the USA took a large shareholding and rebranded the group as EB (Electronics Boutique). In those days, EB had a massive push for custonmer service and was agressive on price. EB (UK) purchased GAME from a group that was a smaller company started by ex-directors of Virgin and then bought back the share from EB in the USA and then re-branded the stores all as GAME (lets face it, it was a better name). However, in purchasing a competitor they ended up with several towns where there were tow shops on the ame hight street, and whilst both store were profitable it was always the intention to close the poorer performing of the two stores.

However, as retail turned bad, they were unable to offload the duplicate stores (this should have been done agressively years ago, but you can just see the stock market expecting growth in store numbers rather than reduction, and finding new GOOD stores was always difficult). Still, they should have reduced the portfolio getting rid of all the duplicates. And they should have maintained good customer services. And they should have been more agressive on price. And they should ..... Oh well, the list of what they SHOULD have done is far too long. That's why they have ended up in administration.

Trade-in prices (3, Interesting)

Rik Sweeney (471717) | about 2 years ago | (#39494163)

Trade-in prices is what put me off going to Game. I'd take in something recent, like, say, Street Fighter X Tekken and they'd give me maybe 13GBP for it, or 16 if it wasn't "scratched". They'd then sell it second hand for 30GBP (or 28 if it doesn't come with instructions or a box).

Meanwhile, the independent shop near it, CEX, would give me 28GBP cash, or 30GBP exchange.

Re:Trade-in prices (1)

tudsworth (1919278) | about 2 years ago | (#39494329)

they'd give me maybe 13GBP for it, or 16 if it wasn't "scratched". They'd then sell it second hand for 30GBP (or 28 if it doesn't come with instructions or a box).

Funny that you mention that game. The GAME nearest to me is selling it second-hand for £39.99. A quick search on Zavvi tells me that they're selling the Xbox360 version, brand new, for £36.95 [zavvi.com]

The other big game that they're not selling new, Mass Effect 3, is also £39.99 second-hand in my local GAME branch. I'd check prices for that, but I'm lazy, and can confirm seeing new copies being sold for somewhere in the £30 range.

As for price reductions for copies of games without boxes or manuals... you're a funny man. Another example from my local GAME branch - Lego Star Wars 2 on Nintendo DS. £15 with the original box and manual. The same game, minus manual and in a generic "we do not have the cover for this game" box... £15. Hell, that price tag is no guarantee of me getting a working cartridge/disc, either - they do reduce trade-in values if your disc is scratched, but it's a total crapshoot whether they'll, you know, clean the discs before putting them on the shelves. If they don't, it sets the eventual buyer back another £3. Or in the case of cartridge games, leaves the buyer with a paperweight. To be fair, they probably don't clean the discs deliberately - it's £3 of pure profit on top of the already ridiculous mark-up; and at one point, they actively rewarded sales assistants who managed to upsell disc cleaning for pre-owned games.

"to enter administration" = ??? (1)

Moskit (32486) | about 2 years ago | (#39494289)

It would be great if someone used terms more familiar to those international folks who don't know British law :-)

Does it mean they went bankrupt (as summary seems to say), under investigation (which forced closing the stores), became a public administration entity (who then decided to close some of the shops), or what?

Re:"to enter administration" = ??? (1)

Anonymous Coward | about 2 years ago | (#39494335)

It means independent administrators have been called in to take over, as the company is no-longer solvent.

The administrators job is to try to make the company profitable if it can, or sell off any assets with value to get as much money back to the creditors as they can. What normally happens is the profitable stores are kept running, while the unprofitable ones are closed and sold off / staff sacked. Then the profitable stores can be sold on as a going concern, and the pile of money from that and the selling of other stores is used to pay back the companies creditors as much as possible. Shareholders in the company typically get nothing, unless there is money left over after paying off all the creditors, but in that case it would have probably been restructured and emerged from administration as a going concern rather than being sold off.

I worked in game for several years.. (1)

tiniebras (2158384) | about 2 years ago | (#39494517)

There was much I enjoyed, and much i loathed. GAME did a good job of importing the american customer service model in an effort to become more profesional as it grew. It was a very sales driven environemnet, where the goal was to engage the customer, and help steer their choices. Some people like that some don't. The GAME stores were constantly in competition against each other for sales, and also against their own sales figures from previous years. Sadly, whilst the company moved towards focusing more on the customers, it failed to focus on its staff. There was no benefit to the Sales assistants in selling more, other than their manager shouted at them less. The company had a big chip on its shuoulder about staff theft as it tried to transition and exapnd from a small chain to a more profesional outfit. This led to routine searches of staff before leaving the store, and treating all staff as potentional thiefs. I agree with the above posts that what really killed GAME though,was the reduction in footfall. "Young" game buyers moved across to internet shopping a long time ago, but GAME survived on the key period of Christmas presents. December+january takings were equall to takings for the rest of the year in some concessions. With the appearance of not jsut games, but also hardware in supermarkets, this too began to ebb away. I loved checking out games at GAME when I was young. I loved working there in my early 20's. I want to say I wish it was still there, but when I think about it, I haven't been to GAME to buy anything for over 5 years. I go to browse, and catch up with friends. But never to buy. In the end, I guess I killed GAME.

Re:I worked in game for several years.. (3, Interesting)

ledow (319597) | about 2 years ago | (#39494747)

The American customer service model does not work well in Britain. A lot of American chains forget that when they come over here. If an Englishman wants help, he'll come and find you and ask. Otherwise, leave him the hell alone.

If you come up to me all smiles and "Hello Sir, can I help you", I don't think "Oh, that's nice", I think "What are you trying to sell?" and "How can I get rid of you?". If you try to learn my name, or start trying to steer me towards products, I actually feel more like a number, not like you're helping. And English sales assistants can't do smalltalk well at all, and you find them approaching you with an offhand comment about the weather before launching into sales patter as an example of their "engaging" with the customer.

If you approach me in a shop as a member of staff, you will be politely turned away. If you're persistent, I will just walk unless I really *NEED* the thing I'm trying to buy - I've done it several times. I *KNOW* whether I need your help or not, so listen to me when I tell you. If I look incredibly baffled, of course you can try to ask, but chances are that most geeks and kids will say they're fine and want to carry on on their own. And, kid, I was writing computer games before you were even born - don't try to tell me "What you really want is...". If you haven't got what I want, tell me. Hell, point me to your competitor. Because you won't make any money out of me, I'm costing you valuable sales time AND I will return if you're honest and help me buy what I want rather than what YOU want me to buy.

To be honest, it baffles me even in Europe, and is a small part of the reason why the English are considered rude abroad. You can spend 30 minutes talking to a pharmacist in Europe (even as a native) when all you wanted is some sunscreen, and they will deliberately put things out of reach or on counters that deter browsing just so they *can* talk to you.

In England, walk up to the shelf, pick it up, buy it. There's usually a nice assistant available if necessary but if she says more than "Hello", she's getting in your way. The English sometimes see such "personal" service as fake because - well, we don't have it and don't understand it, and a lot of the time it is completely fake. Do I really believe that spotty oik #8 cares about me leaving his shop with what I wanted to buy, even if it's only a £5 game?

GAME were incredibly annoying for this. "Do you need help?" four or five times per visit. Not buggering off when I don't. When I do (or the person I'm with stupidly launches into a ten minute explanation of why we're there), they steer you to things that you just said you DON'T want (whether because of sheer stupidity, high sales pressure, or just bad knowledge of their industry area) and hassle you to buy a DS when you only went in for a £5 PC game. And NO imagination over what to stock. Top-end £50 Wii-titles and nothing else, tiny PC section at the back with top-end £50 AAA titles that need Steam accounts of GfW to activate anyway. Where's the budget section? Where are the indie games? Where's the stuff that people WOULD want to buy on impulse?

They also had high prices compared to online sales and, I'm sorry, nothing that I'd actually buy. I used to be in there all the time as a teenager, but haven't bought anything in one for literally YEARS. The pre-owned section gets the most attention from other customers, and the only time they're busy and not just a small shop of geeks and kids is when Christmas is coming and they've secured a few units of whatever the next big thing is. They remind me a lot of the Games Workshop stores - from outside it's all kids and geeks, which is enough to put off e.g. girlfriends, mothers, grandparents, etc. but at least Games Workshop have half-decent service and sell them what they wanted.

In comparison, the other geek/kid hangout of the local exchange shop (Cash Convertors, CEX or some local equivalent) had lots of customers of all ages, lots of cheap stock, some new, some pre-owned, on just about every platform available, and nobody told you what to buy or hassle you. I still visit those and buy from them regularly.

In the DOS days, Game worked well. With the Internet, it doesn't. They didn't reinvent themselves, they just tried to compensate with a harder sell and higher margins. They drove their own customers away, basically, and ended up with barely-profitable kids constantly swapping pre-owned's and lost grandparents who bought the latest gadget at Christmas and never went back.

I'll miss my local GAME (1)

RivenAleem (1590553) | about 2 years ago | (#39494811)

The GAME store in Dundrum, Ireland has/had (I'm not certain if it is closed) some great staff. They always seemed really into the games they sold, and never offered any kind of judgement.

I once pre-ordered WotLK expansion in Gamestop in Bray (Wicklow, Ireland) and I was excited to play it, so had taken 3 days off work and arrived the morning it launched at the shop door, just as they were opening. There were 3-4 other people there waiting for the store to open. When the clerk arrived and opened the door, you could see this look of "What a bunch of saddos" written plain on his face.

On the otherhand, the staff at GAME were totally different, offering midnight release of Cataclysm and SWTOR and other games, like MW3 & Battlefield 3 (though I didn't go to them), getting into the spirit of it and lamenting that they would have to be there for a few more hours, and thus not able to go and get playing themselves.

That GAME store definitely felt to me to be a shop by gamers for gamers.

It's their own fault (0)

Anonymous Coward | about 2 years ago | (#39495015)

It's their own fault really!
Over the years they have had an increasingly worse selection of Games. Made worse by having piles of unsold of 'Title X' from 6 months ago alongside a similar sized pile of traded in copies of the same game (with no real difference in price). My local branch seemed to stop bothering with newly released PC games a long time ago.
They completely messed up their strategy w.r.t. to Nintendo Wii and DS releases. The sections were tiny in comparison to PS3 and XBOX360 (and even PS2 and XBOX) for a long time after release - despite them having the largest userbase and, it would seem to me, having the userbase most likely to buy a game while out shopping on the High Street.
Their customer service was often awful. I've lost count of the bad advice I have overheard them give to people who have succumb to the full rotation of staff nagging them every few seconds. If I want your help I will come and ask you for it! And more recently they have seemed to stop employing as many 'gamers' (or perhaps they have just exhausted the supply with their saturation of shops) so there hasn't been anyone to answer questions about more obscure titles.
The 'grown up crèche' aspect of being able to while away a few minutes trying out the latest titles while shopping partners were looking at shoes (or whatever they did while I was looking at games) hasn't been present for quite a while now. The almost invariably powered off cabinets shoved to the corners of stores.
Finaly; Their online presence was just plain awful - it didn't seem tied to the shop brand in any way except the logo (and to some extent the uncompetitive prices).

I seriously doubt that they can come out of administration in their current form. Even with the lower overheads of fewer shops and general separation of chaff that the administrators will perform. I predict a selloff of stock at rock bottom prices from a select few well positioned stores in big cities (to generate a bit of buzz similar to what happened with the closure of Woolies) in an attempt to get the creditors something. Followed by winding up entirely.

The good that may come out of this is that there will be a space for a good independent games shop in many places - just got to find a business plan/model that'll work.

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