GAME.co.uk in big trouble?

[DJ-Daz]

Source: TheSixthAxis
According to NowGamer, GAME might be struggling to stock new videogame releases.
The site has quoted an unnamed source who said that the retailer has “lost credit assurance with most of its publishers.”
If the company has lost this assurance then publishers will not allow GAME to stock their games due to the financial risk involved.  “If true, it could have a huge impact on the upcoming PS Vita launch,” says the story, although doesn’t state that one of the publishers is Sony.
NowGamer’s source also states that staff wages will be withheld in an attempt to make GAME Groups finances appear better than they are, which seems baffling.
We’ve reached out to our contacts at the retailer for comment.
In the meantime, trade magazine MCV has refuted these claims, “we can absolutely confirm that GAME has NOT ‘lost credit assurance with most of its publishers’” it tweeted.

Update: NowGamer seems to have misunderstood or misrepresented the story.
MCV has already been in touch with Game and has been assured that, although there are concerns over the retailers credit insurance (markedly not “assurance”), their relationship with publishers is still good and new releases will, of course, still be available this Friday.
We’re still waiting to hear back from our contacts at Game.

Update 2: We’ve just heard from an anonymous employee at the retailer who told us their pay was late, confirming at least one of the allegations above.

Update 3: It appears it’s the ‘sale or return’ that GAME has lost with the publishers in question, something backed up by Eurogamer. This basically means that any games not sold can’t just be sent back to the publisher, and GAME is being asked to pay upfront for these games now.

[InfiniteStates]

Source: TheSixthAxis
...
Update 2: We’ve just heard from an anonymous employee at the retailer who told us their pay was late, confirming at least one of the allegations above.

Update 3: It appears it’s the ‘sale or return’ that GAME has lost with the publishers in question, something backed up by Eurogamer. This basically means that any games not sold can’t just be sent back to the publisher, and GAME is being asked to pay upfront for these games now.

They may not be in trouble today, but they are definitely sliding down the slippery slope if this is true. Not being able to return unsold stock will be fatal and I've never seen a company yet recover from wage disruption...

[DJ-Daz]

Yep it's bad news, but they've been in trouble for a while now - Supermarkets nuff said.

[InfiniteStates]

Really? I know they've been in trouble, but didn't realise supermarkets contributed. They are the last place I will go for games, unless it's really old and they want to clear the stock. Supermarkets are good for a lot of things, but not new games/DVDs.

[DJ-Daz]

The supermarkets started getting into the second hand games market a while back. There's a post somewhere...

my local Asda, Tesco and Sainsburys are all into it big time now, then theres the massive price reductions on the big games.

While you and I dont go there for games, a lot of other people do, even if it's just the casual browsing sale that they get, it get people into the idea/habbit of going there for games. Maybe not my first choice, but they are usually cheaper on all counts.

[DJ-Daz]

New reports in today from Eurogamer suggest that game and gamestation are no longer stocking EA games beyond SSX.
If it's really true then then it's bad news for game, we all know how big EA games is.

Any refunds are now provided via credit notes and not cash.

[YorkshirePud]

u not sticking that on the blog daz?

shame for the employees but its unsurprising really.

sigh i rember the days of electronics boutique, and even before that when the only video game shops were private ones run by private individuals, there was this crackin gon in Wakefield, this is during the C64 Amstrad CPC daze

[DJ-Daz]

The original post is on the blog, but not the follow up.

[YorkshirePud]

huh couldnt see it must be my bad

[DJ-Daz]

they are selling used consoles at rediculous prices:
PSP:

BASE MODEL: £29.99
2000: £39.99
PSP GO AND 3000: £49.99

WII:

WHITE: £39.99
BLACK: £49.99
BLUE WITH LONDON MARIO OLYMPICS: £59.99
RED LIMITED EDITION MARIO: £59.99

PS3:

40GB, 80GB AND 60GB: £99.99
120GB AND 160GB: £129.99
250GB AND 320GB: £149.99

XBOX 360:

20GB AND 60GB; £69.99
250GB SLIM: £129.99

NINTENDO DS:

ORIGINAL: £19.99

Pre-owned games:
Xbox 360

Stranglehold 98p
Top Spin 3 £1.98
Guitar Hero 3 £1.98
Too Human £1.98
Gears of War 2 £1.98
Forza 3 £1.98
Halo 3 (classics) £1.98
Alone in the Dark £1.98
Kane and Lynch 2 £1.98
Bulletstorm £2.98
Brink £2.98

PS3

Resistance: Fall of Man 98p
Fifa 11 98p
Fight Night 3 £1.98p
Fallout 3 £1.98
Tom Clancy’s HAWX £1.98
F1 Championship Edition £1.98p
Resistance 2 £2.98

In addition, rumours are starting to emerge that it’s looking like some new (as in, not pre-owned) titles will be next to go on sale – everything’s being done manually by the store staff (which must be horribly demoralising for them) so timing might be important – and then we’re also hearing that pre-owned hardware might be on the cards too.

[InfiniteStates]

Sounds like they're trying to clear stock before imploding to me.
Also sounds like a ripe time to grab a bargain
Fuck 'em - I shop online. They just rape me for impulse buys...

[DJ-Daz]

Yesterday the Sunday Times reported that Game is up for sale, but warned that their quarterly rent bill is due at the end of the month, and failure to pay will put them into administration.

Selling part of the group in such a short time frame will no doubt be a challenge, but reported that GameStop is interested in the Spanish part of the group.

Today however the managment team are warning shareholders that their equity is worthless.

Shares in game are down to their lowest level ever at 1.21pence per share. This puts estimates for the entire group at around £3 million, down from £15 million just last week.

game shares.png (8.66 KiB) Viewed 2270 times

Over the last two weeks loss-making Game has had to tell its customers to shop elsewhere for new releases, such as Electronic Arts' (EA.O) Mass Effect 3 and Capcom's (9697.T) Asura's Wrath and Street Fighter X Tekken, after failing to agree terms with the suppliers.

The firm said it remained in talks with suppliers and lenders in relation to terms of trade that would allow the business to operate within the banking facility agreed last month with lenders led by state-backed Royal Bank of Scotland (RBS.L).

Game is also seeking alternative sources of funding and reviewing the position of all of its assets in the UK and international territories.

The firm, which faces intense competition from internet players and supermarkets, who often sell new blockbuster titles as loss leaders, is up against it as it must pay a quarterly rent bill in two weeks time. Failure to meet that could result in administration.

Shares in Game, which prior to Monday had lost 94 percent of their value over the last year, were down 2.5 pence at 1 pence at 0917 GMT, valuing the business at just 3.4 million pounds ($5.3 million).

The firm has been closing stores and moving into digital gaming, aiming to avoid the fate of other struggling specialist retailers, such as music and films group HMV (HMV.L)

Game may look to U.S. rival Gamestop (GME.N), long seen as an obvious suitor, for a rescue deal. However, analysts doubted if any serious bidders would emerge ahead of an administration.

"We suspect that any potential suitor would prefer to wait for a formal administration process. Through a pre-pack the suitor would have much greater flexibility around store liabilities," said Singer Capital Markets analyst Mark Photiades.

He advised investors to sell now rather than face losing out to a potential administration.

[InfiniteStates]

R.I.P Game.
Don't see them pulling out of this. Just prolonging the agony.

[Symonator]

I'd love to look at the accounts.
How can such a big name fuck it up so bad?

They are like a household name, even if you don't use them - you know who and what they are.

I just read more stuff on eurogamer about various memos and problems it doesn't look good.

A company that turned over 1 billion in 2011 has now got shares plummeted by 90% making it worth less than 4million to buy.

In reality the real problem is high street shopping, not many people do it, alot of things get sold online these days.
Remember my little independant shop i went to for games for at least the past 15 years? - he had to close last week permeantly, said he can no longer compete with online prices, they sell the games cheaper than he can get them delivered half the time.

I think GAME demonstrates that even large market high street shops can be left to rot.
If it was me, i'd of just done digital, close all the shops, all the rents, wages and everything else that goes with it and sell direct online, not both.

Play.com, shopto and amazon do well at it, hmv are starting to make profits from doing it, game still a little behind in the sense that they are like woolworths, thinking high street shopping was always there for them, and of course, it's not.

People go elsewhere for games, or where they can get a better deal.

[Killzone_Kid]

@Sy Several times that I've been physically to a Game shop, I didn't find what I was looking for or my experience was sub par.