Game Group has been saved by private investment firm OpCapita in a move that will safeguard more than 3, 000 jobs and ensure that the Game and Gamestation brands continue to exist on the high street.
Game's administrators PricewaterhouseCoopers (PwC) closed 277 stores last week, resulting in 2, 104 job losses, but the sale of the group to OpCapita will ensure the remaining 333 UK stores continue to trade as normal.
Nearly 3, 200 staff will keep their jobs as a result, with a small number of staff who were served redundancy notices last week set to regain their jobs at the retailer's head office.
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OpCapita, which has picked up Game Group for £1, specialises in turning around troubled retailers, following on from its recent £2 acquisition of electronics specialist Comet.
Henry Jackson, managing partner at the private equity firm, said: "We strongly believe there is a place on the high street for a video-gaming specialist and Game is the leading brand in a £2.8bn market in the UK.
"We have assembled a strong team of experienced industry operators to implement the programme of operational change that is needed. There is a huge amount to do, but we look forward to the challenge of restoring Game's fortunes in partnership with its employees and suppliers."
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Game has struggled to modernise its business in the face of increasing competition from internet retailers such as Amazon, as well as from the UK's major supermarkets.
The retailer fell out publicly with suppliers at the start of the year after being unable to honour deals. As a result, stores were unable to stock Electronic Arts game
Tesco is ramping up its aggressive moves into the gaming market and last week ran a press campaign positioning itself as the "home of gaming", with claims that the supermarket has the largest number of gaming stores in the UK, alongside more than 10, 000 games available online.This post was inspired by an article I read a little while ago which detailed some of the financial issues facing GameStop. Here in the UK we don’t have the chain GameStop, at least not in a big way. But many of the same issues apply to shops here in the UK – as indeed they apply to those around the world.
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When I was younger – and much more into video gaming – there were a number of different gaming shops on the high street. Even in the relatively small towns near where I grew up, there could be two or even three such outlets. The ones I remember most prominently are of course Game – the biggest, and the only one still around as far as I know – Electronics Boutique, Virgin Games, and Gamestation. Shops like Woolworths, HMV, Dixons, and Virgin Megastores also had prominent video games sections – so it could be worth shopping around for the best deals!
There were three pretty great things about this from my point of view as a kid/teenager looking to get SNES, Nintendo 64, Dreamcast, and finally Xbox games. Those were the consoles I had in my youth, by the way. The first awesome thing was that I could choose what to spend my hard-earned(!) pocket money on for myself. If I wanted a newer, more expensive title I’d have to save up for it, perhaps even forgoing trips to the cinema or other social activities, or simply wait longer. Or I could try my luck on a cheaper title – and then end up bringing it back a week or two later to trade it in, which was the second benefit of the abundance of specialist gaming shops. Finally, I could try to get games that weren’t suitable for someone my age!
The concern I have as shops like Game here in the UK, and Gamestop in the US and elsewhere, continue their decline is that for children and young people in particular – as well as people on a lower or fixed income, as I am myself – the relationship they have with gaming as a hobby is going to become more difficult.
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Video gaming as a medium is increasingly digital. More and more transactions are taking place in online storefronts, with titles being downloaded with no need for a disc or cartridge. Increasingly, games require large patches or updates after release, so even buying a disc can still mean an internet connection is required. And often – especially in the PC gaming space – buying a “physical copy” just means you receive a box with a download code in it. Why bother at that point, right?
For young people, the transformative years between the ages of, say, nine or ten and thirteen or fourteen are where a lot of important skills are learned and honed. Money management is one of them. For someone too young to have their own bank account or debit card, how are they supposed to learn the value of saving up, of pocket money, etc. when the only way to buy a game – if that’s their hobby – is to get mum and dad to do it with their credit card? Not understanding the value of money leads to some kids ending up spending insane amounts of money on in-game microtransactions – they simply lack any concept of money as to them it’s simply numbers on a screen. And yes of course there are still plenty of things in the real world for young people to spend money on, but for someone in the position I was in at that time of my life, where gaming is their primary hobby, there are fewer such opportunities and I think it will have an impact.
The lack of trade-in opportunities will also change the way people on a lower income – including young people but also folks with disabilities like myself – engage with gaming. A game ceases to be an asset – something with resale value – if you only own it digitally and can’t transfer that ownership to someone else. It means people will need to be much more careful when making purchases – because a game is now a permanent fixture in a Steam library or on a console hard-drive.
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All this is to say that I’m confident that businesses like GameStop and Game will not survive the decade. And unfortunately, many people will be the worse for their demise, even if they don’t realise it yet.
Physical shops of all kinds find it very difficult to compete in a world where the likes of Amazon exist, able to deliver anything to your door within 24 hours. The high street in the UK has been in trouble for some time, and many smaller towns – again, like those in the area where I live – have high streets which are full of charity shops, betting shops, takeaways, and not much else any more. As more and more commerce goes online, high street shops find it hard to compete. If that’s the case for physical items, a product like a video game which can be entirely digital is even more susceptible to the world of ecommerce.
From the point of view of game publishers it makes a lot of sense. They need to spend less and less money on discs, boxes, printed labels, and shipping, and they no longer need to split the cost of a game with whatever shop it was sold in as well as the platform it’s being played on. Console manufacturers can take a bigger cut of game sales as they each now have their own, exclusive, digital shop. And increasingly we’ve seen publishers like Ubisoft, Epic Games, Electronic Arts, and of course Valve running their own digital shops for PC gamers. Valve, who once made such titles as
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Series, are now essentially a company who run a digital shop. They do have a couple of multiplayer-only games, but the vast majority of their income nowadays comes from Steam, the biggest digital shop on PC.
As the current generation of consoles winds down, there had been speculation that next-gen consoles – currently slated for release later this year – may not even have disc drives any more, and that all games would be fully digital. It does look as though Microsoft at least has pulled back from that, offering at least one model of the poorly-named Xbox Series X with a disc drive. There was a certain amount of annoyance from gamers at the prospect of all-digital consoles, but compared with the backlash Microsoft received in 2013 with its always-online Xbox One it was much more muted. This upcoming console generation looks certain to be the last where physical game discs are commonplace.
Not that there will be anywhere left to buy them in another seven or eight years, at least not in person. A few years ago, post-release patches or fixes for games were uncommon, often reserved for fixing major bugs or for delivering major updates and expansion packs. But nowadays, almost every game seems to launch with a major patch on day one, with multiple patches and
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