The cost of GAMEing

Posted February 19, 2012 by Thomas.Mullin in Articles, Opinion, Retail

Over the past few months, there have been growing concerns that the high street games specialist GAME was in financial trouble. This turned out to be more than just a rumour as there was a huge mataphorical fire to substantiate all the smoke. GAME had run in to financial troubles, and had lost the backing of their lenders. I’ll leave the financial breakdown to the brokers and financiers, but having struck another deal they’re in the clear…for now.

GAME are not the only store to have suffered at the hands of declining sales though, and following poor sales figures in the UK, the American gaming giant Gamestop pulled out of mainland Britain last year. Last month saw the closure of their stores in Northern Ireland; ditching the traditional brick and mortar point of sale for online sales.

Knee jerk specialists, those within the industry and beyond, have attempted to hammer home the responsibilities that each store has to the gaming industry and in particular, there has been a strong active and vocal damnation of the pre-owned and trade-in services ran by these companies.

It’s odd that this sector of the business has come under fire as of late when you consider the raging success Gamestop sees in its U.S. stores, not to mention that the market has had a second hand sector for years, but nonetheless it’s easy to blame pre-owned sales, seeing as how project $10 reared its ugly head, and now we’re working with online passes.

Rather than wax lyrical about my issues with online passes, the deliberate removal of on disc content, and not to mention the ivory tower whining of profitable multi-million dollar/pound companies, I’d like to point out some factors that, while you may not like it, fall a little closer to your own doorstep than you may have considered.

I’ll be honest for a moment. I’m no politician, so I’m not going to argue whether we are, or aren’t, still in the middle of a recession. It is, however, safe enough to assume that consumers are spending a lot less on the high streets in general, which outwardly affects our overall economy.

Gaming after all, is a luxury commodity and it would be foolish to think that this takes preference over the likes of, you know, food. If we’re not spending it, the retailers aren’t shifting stock, making profit and in turn their investors begin to lose faith in the ability of the store. GAME’s situation is a relevant, if not obvious, example of the declining need of luxury commodities.

Developers’ release windows are usually so tightly packed, that a consumer with little to spare on their favourite hobby has to be very choosey about their purchases. It’s fine if your wallet is overflowing with freshly minted notes, in which case you’re probably wondering why you’re still reading and not spending your cash frivolously, but for the rest of us more humble folk we have to think more rationally about our purchases or consider alternatives.

The first of these alternatives is online. Shopping online has become big business since the turn of the century and since broadband being prevalent in more and more areas, it’s more accessible. Online businesses cut prices and, on occasion, slash them substantially. In this process, they are shooting the brick and mortar sales in the foot. Selling at a reduced price of ten percent, or more, is enough to convince weary shoppers to stay at home and fire up the laptop.

Both Gamestop and GAME are guilty of this practice themselves. If you compare the cost of a new release in their online stores to the £39.99 to £45.00 asking price in the high street, in most cases you’ll notice that they shave a few quid off in almost every case. It’s possible that this practice is having an adverse affect on in-store sales, though GAME have taken measures to create a click and collect initiative, but why bother when you can have it delivered direct to your home?

Obviously, there are factors that account for the reduced pricing in online shopping such as lower overheads, fewer staff and the need to stay competitive with their online competitors such as Amazon and, but in the end it leads to fewer in store sales, as has been the case with Gamestop in the UK.

As consumers spend their money on online purchases, their cash is directed away from traditional high street shops which, affects business slowly over time. I wonder how many people actually thought about it that way. Is it possible that you’re playing a part in the downfall of the high street?

The second alternative to buying from a gaming specialist is to shop around for a deal at a less traditional outlet. In the last five years, supermarkets have latched on to the popularity of gaming and, in their own way, are creating a stranglehold that’s getting tighter.

Head down to your local supermarket on the release date of any major game, and there will be an elaborate POS stating that the latest title is on sale for around thirty of your sterling if you spend over a certain amount on your shopping. It’s an intriguing offer, there’s no denying it. It saves you, the consumer, from shopping around, dragging loved ones into a game store and you get the weekly shopping done. On top of the convenience, you’ve saved £10 or more and spared yourself the hustle and bustle of town.

I’m not going to sit here and tell you that you need to get out to the stores and spend, spend, spend, nor am I going to suggest any one person is at fault, I’m merely considering the factors that are leading to the decline of high street sales in specialist gaming stores, without the need to point fingers. It’s not an issue that can simply boil down to one lone factor or group of people, and we’re not even talking about the wants of developers and publishers either.

It could simply be a recession that is keeping the industry in a slump, or it could be the culmiantion of all the factors that has seen lowest sales over the Christmas period in years? It’ll be interesting to see how sales in 2012 pan out, with new IPs and a selection of reboots on offer. Perhaps a fresh series of releases will see the market spring to life with a new vigour, and our trusty high street stores may live to fight another day.












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