In the days or weeks to come, the UK could face yet another lockdown. The Omicron variant is spreading at an all-time high, and while it appears to be less deadly than previous mutations, the British could well find themselves in a fourth nationwide shutdown, again shutting down the hospitality industry and all non-retail stores. essential.
After the reduction in pre-Christmas footfall in shopping areas across the country – in addition to the longer term shift from game retailing to online retailers, subscription services like Game Pass, digital versions only and supermarkets – you’d be forgiven for thinking of those few remaining street game stores in Britain might have 2022 written on their headstones.
You would be wrong. UK street game retail is not dying, it is already dead. Plus, while the outbreak of COVID-19 hasn’t really helped, that’s not to blame. A company’s UK market is not the victim of a thousand cuts; he became involved in seppuku, cutting himself off from those who remained loyal to him.
A collapsing monopoly
While its US counterpart GameStop has had a roller coaster ride following the infamous trading of its shares, the only major UK game retailer GAME is on a downward trajectory. In many ways, it’s surprising that it has lasted so long.
Until the mid-2010s, formerly local brands maintained a strong presence in the UK games market, such as Grainger Games of Newcastle; even after hosting one of the worst gaming awards in history (flying condoms and all), he managed to hang on for another eight years before he fell apart.
Before the financial crisis of 2007-2008, the playing field was more level. Gamestation, which for many was the most profitable company, especially in the second-hand market, was preferred by many gamers and provided huge competition for GAME.
However, this upstart was canceled when GAME bought it out in 2007. It kept the brand, but prices gradually started to climb. In the big cities, it also scattered business. In my house in Leeds, five stores owned by GAME were operating at a time; four were within a 15-minute walk.
Despite the storm of the credit crunch, things started to fall apart for the monopolized UK gambling market. Poor financial performance limited GAME’s credit conditions, leading EA and Capcom to prevent new versions from reaching stores.Mass effect 3 and Street Fighter x Tekken have been withdrawn.
The administration was looming; Activision and Microsoft have also withdrawn their products. In 2012, GAME withdrew from the London Stock Exchange; soon it was acquired by private equity firm OpCapita. Stores closed by the dozen, thousands of jobs were lost, and the Gamestation brand was gone.
And yet, GAME continued to hang on with a lesser presence on UK main streets, and it was relisted on the LSE in 2014. Bargains were scarce, but it maintained its status as a favorite haunt for new consoles, while diversifying. its range of clothing and souvenirs. For less savvy buyers, parents, and the tech-savvy, it was a godsend.
However, its value continued to decline and in 2019 GAME was acquired by one of the country’s most infamous companies. Many believed that this would only make GAME’s fortunes worse, and looking at where he is now, they will feel justified.
The era of direct sport
Despite being the UK’s largest sports retailer, Sports Direct, now marketed as the Frasers Group, is not much admired by the UK mainstream, often finishing very low in customer satisfaction surveys. Between its garish branding, its “stack it high, sell it cheap” philosophy and often incredibly cramped hypermarkets, it’s the worst nightmare for many shoppers, even without social distancing.
Still, Sports Direct is making a ton of money, and that success has helped it acquire recognizable and financially struggling brands, including the House of Fraser department store and fashion brands Jack Wills, Kangol, and No Fear. GAME was an odd addition to their fast fashion stable.
However, it soon became clear what the organization’s long-term plan was. Taking advantage of its huge stores and seeing how much GAME was spending on rent, Sports Direct decided to close a large number of storefronts and introduce the brand to its hypermarkets, which were often on the same shopping streets.
In principle, this is a smart business move that has worked for the company in the past. It diversifies the shopping experience, downsizes, provides another reason to enter, uses available space, and could increase average order value.
Ten years ago, it probably would have worked. Now? It’s really hard to see the experience last in its current form beyond the end of 2022.
Why GAME is doomed to fail
Hiding in plain sight
Aside from the odd poster in a window, you’d never know GAME was in Sports Direct. In the half-dozen stores I’ve seen, there is no lighting or signage inside other than a cardboard pillar or a hanging arrow. Next is the placement of GAME in the store; in the flagship store in Leeds, for example, it’s on the second floor, just back, next to the Beatles hoodies and half-price Yankees caps.
Sports Direct is culture shock
While most people can find a reason to go to Sports Direct, it is not the right audience for the GAME audience at all. Confusing a tech giant in a clothing store isn’t the right solution, but culturally the two brands couldn’t be more diametrically opposed.
When maintaining its own storefronts, GAME was a safe place for gamers, especially the more introverted types. The staff knew their stuff as they were almost always players themselves. While some of those employees have made the jump to their new home, the players entering the store couldn’t be more different from the average Sports Direct bettor. For some, this is exactly the kind of person they use the game to get away from, for better or for worse.
GAME was famous for selling most of the stuff at RRP, but in its new home it seems more obvious than ever. The higher costs are incredibly at odds with the general business of Sports Direct, which uses its incredible purchasing power to reduce competition from brands like Adidas and Nike by 10-20%, while selling its own brands at a very low price. price.
Parents are younger and more knowledgeable
Without an immediate presence on the streets, the allure of impulse shopping by parents is lost. However, the current generation of parents who buy games for their children – the 25-40 year olds who grew up with games and the Internet – are smarter than ever. Combined with the threat of COVID-19, online literacy has only improved and visits to crowded stores are irrelevant.
Considering its branding and obvious SEO advantage, you’d think GAME would continue to perform well online, but two major changes impacted its performance.
First, GAME’s free shipping has been phased out and replaced with a minimum flat rate shipping of £ 4.99 ($ 6.70) on all orders, to a country only the size of Michigan. It just can’t compete with Amazon and other online gaming sites, which almost always offer free shipping. While the click and collect option remains free, an apparent lack of automated store inventory verification means these orders are subject to cancellation.
Second, and this is crucial for a market that relies heavily on second-hand sales, GAME’s online trade assessment tool is gone, forcing people to take their chances when they get there. This, in particular, only further strengthens its modern street rival.
The CEX effect
CEX, formerly known as the Complete Entertainment Exchange, is the UK’s leading used technology retailer. Founded in part by Black mirror writer Charlie Brooker, of all, this 388 store network operates an often brutal supply / demand business model – for example, you can get a used PS5 right now, but for £ 650 ($ 871) – well that trade-in values are often inflated to match, causing many players to buy and sell only using store credit.
Bargains exist at CEX, while its retro market, besides ridiculous prices, attracts even more people, if only to browse. It’s a cave of Aladdin’s discoveries, unlike GAME’s more predictable and shrinking selection.
While there are still stand-alone GAME stores, and there is every chance that Sports Direct-based dealerships will last two or three years longer, their size is likely to shrink, reflecting the often unsuccessful moves of supermarkets and tech stores. to create huge game sections, only to discreetly shrink them down to only sell the top ten games like FIFA and Call of Duty.
It was a good run for GAME, but for most astute gamers the writing has been on the company wall for a long time. For my part, I will miss them when they are gone, even if they were only part of the furniture, like a side table that you never actually use and which is expensive to maintain, but which brings a lot of good memories.