The GAME Is Back On: Bought Out Of Administration

By John Walker on April 2nd, 2012 at 12:00 pm.

Staying open, for the foreseeable.

It’s official. GAME, the UK’s biggest high street retailer of games, is saved. GAME, and Gamestation, will continue on, and 3,200 jobs secured. This is thanks to the company’s being purchased by Baker Acquisitions and OpCapita, recent owners of Comet. That’s good news for those who stay, which will include a “small number” of head office staff, previously made redundant, but little comfort to the 2,100 who lost their jobs, and are still facing not receiving redundancy payments. 277 stores haven’t survived the ordeal, but the new owners say there will be no further closures.

No details of how much was paid are being revealed. Not being an industry analyst, and frankly confused by the whole thing, I’m not going to hazard a guess as to how it all worked, but with the company in such massive debt (around £85m) you have to assume the price was rather low. I’d be surprised if it were more than a £1. And as awful as it is that so many lost their jobs, few could doubt the streets were a little GAME/Gamestation heavy, every town seeming to contain at least one of each, and many multiple copies left over from the EB merge of yore. Saturation, in a market where there’s an unavoidable shift to online/digital distribution, seemed an odd direction for the company to stick with. But OpCap and Baker seem to believe there’s still a place for retail.

“We are pleased to have reached agreement with the Administrator. We strongly believe there is a place on the high street for a video gaming specialist and GAME is the leading brand in a £2.8 billion 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.”

You really have to hope there are some serious questions asked about GAME’s failings, and how it got into such a mess. But my stomach tells me that the non-specialist companies that now own the chain will likely focus on things like “streamlining” and “value for customers” and other things that don’t mean bringing back in a comprehensive library of games on multiple formats – something the stores had when they were thriving.

The other big question is, how long is gaming retail really a viable prospect? By Christmas 2013 we’ll likely have two new consoles competing for our floor-space, and certainly those lumpy physical objects will be good for the shops. But surely both the new PlayStation and Xbox will have fully online markets for new games? The artificial restrictions placed on the current generation are increasingly ridiculous, and deliberately preventing gamers from having easy, instant access to games in the next gen would be madness. With PC, whether by the merits of digital or the failings of GAME, primarily online already, that leaves retail purely serving grans buying ill-advised Hasbro video games for soon-to-be disappointed grandchildren. Surely the only sensible thing for GAME to be doing at this point is hoovering up as much money as they can for the next two years, while shifting their business to a purely online model? Their US counterpart, GameStop, have made their move, buying Impulse and rebranding. Indeed, they’re already selling into the UK, albeit at ludicrous prices. GAME really needs to catch up. They do offer downloads on their site, but only on very few games, and when they do the prices can be utterly peculiar. More, you’d never guess they offer downloads when looking at the front page – it’s clearly not a priority.

For only eight pounds more!

We’re delighted that so many jobs are secured. But we’d really like to see the new owners addressing the redundancy payments of those who have been fired. At least those individuals now have an entity to sue, I suppose.

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54 Comments »

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  1. Meat Circus says:

    Saved? They’ve just been acquired by an aggressive asset-stripper. A vulture capital firm who plans to “save” GAME in precisely the same way that a similar venture “saved” Woolworths.

    • Scatterbrainpaul says:

      vulture firms, vulture funds. Very interesting listen about this practice. Actually this might not be exactly the same thing, but an interesting listen

      http://www.markthomasinfo.co.uk/section_audiovideo/mp3s/nickdearden.mp3

    • Syra says:

      Oh please, evil corporations and their evil ways. Really? That tired shtick? You are implying that private equity activities don’t occur in their thousands every year and can’t be successful.

      Frankly GAME was fucked and a change of management is what’s needed, let’s wait and see what comes of it.

      • mondomau says:

        Yes, let’s. Then you can eat your words.

      • Meat Circus says:

        It’s not evil, it’s just business.

      • Eddy9000 says:

        I didn’t see the poster call them ‘evil’, I think the terms ‘aggressive’ and ‘asset stripper’ were used.
        The point is that the article referred to the company as ‘saved’ but as the OP says the company that acquired them has a reputation for asset stripping, and it is likely that assets such as property, logistics etc. will be slowly sold off or re-purposed into other businesses owned by the corporation.

        Also meat circus, ‘not evil just business’? Please, as if one precludes the other.

        • Sassenach says:

          Evil is an overused adjective anyway. Very rarely to people sit and cackle for their sheer malevolence. Maybe mercenary would be more applicable?

  2. mentor07825 says:

    There is still the matter on the way they handled redundancy in the Republic of Ireland. Specifically, it is the law to receive 30 day notice before being made redundant. Since that never happened, the people previously employed by GAME are going to see if they can take them to court to receive their redundancy, since the manner in which they were laid off is illegal to our law.

    EDIT: edited for grammar.

    • trjp says:

      Redundancy law normally excludes a business going into receivership/administration – if it doesn’t in Ireland, I’d be fascinated to know how that law expects a dead company to pay it’s employees…

      The issue of a company being bought and ‘reopened’ is a thorny one with regards to this – but you can bet if it’s an issue, they’ll simply not re-open the affected shops for as long as it takes for the law to expire/not apply.

    • Wabznasm says:

      There are similar rules in the UK, although the period of notice depends on the length of time you’ve worked there. It’s one week per year of service up to a maximum of 12 weeks. However, companies can opt to give pay in lieu of notice – i.e. they can pay them wages for that period instead of giving notice. There are also minimum levels of redundancy payment depending on how long you’ve worked there.

      On insolvency, however, secured creditors have first dibs on the proceeds of the sale of GAME’s assets. If, after that, there isn’t enough left to cover redundancy payments and such like, then employees are stuffed.

      But then that’s what National Insurance is for.

  3. Rath says:

    Speaking as somebody who works for Comet, I can honestly not see good things in the future for GAME. OpCapita are systematically stripping Comet of anything of worth. It is because of them and their business practices that I am looking for a new job when I’d previously been happily with the company for nearly a decade.

    • Meat Circus says:

      There’s three steps to vulture capital.

      1) Saddle the victim company with vast amounts of debt (loss-making companies pay no tax)
      2) Identify, remove and sell off anything and everything of value.
      3) Dump and write off as a tax loss the shattered remains of whatever you can’t sell.

      Comet are at stage 2, GAME at stage 1.

      • Rath says:

        The interesting thing is, there are certain larger Comet stores that have a GAME in-store. One of the news articles I’d read when OpCapita first indicated their interest in acquiring GAME, they’d mentioned a desire to “create a synergy” between the two companies. This was just after announcing that Comet would be pulling out of video games retail, hence that 20% off all consoles clearout that was held recently.

        • Vorphalack says:

          I wait impatiently for the first Gammet store to open its doors.

        • wcanyon says:

          “Does our plan include the word ‘synergy’ somewhere??”
          “No.”
          “Add it you idiot.”

      • mrtypo says:

        1) That’s incorrect, loss making companies don’t pay corporation tax (a tax on profits) because they have no profits. They remain liable for all other taxes, such as accounting for VAT, capital gains and payroll. Secondly you’re incorrect because saddling a company with vast quantities of debt as happened during the wild days of the pre-credit crunch is quite clearly no longer possible.

        2) You’ve just said they’ll be saddled with vast quantities of debt and now you’re saying they can sell off the assets which will form at least part of the security for the debt. They have paid for the assets and have taken on the debt of the company they’re entitled to do whatever they want to with it. Besides, what do you think would have happened if it hadn’t been bought out? Have you any idea what administrators/receivers do with such entities?

        3) This doesn’t even make any sense.

    • Gasmask Hero says:

      Last I heard their lines of credit had been cut, and nothing was being shipped in or out of their RDC. Have they got things moving again, then?

  4. Premium User Badge

    Skeletor68 says:

    Yeah walked past Game on Dawson Street in Dublin yesterday. Poor bastards still on the sit in. I actually thought they were really nice in that shop so it is quite sad. I’d be surprised if that store wasn’t making enough money to stay open.

    What I’d like to see from more gaming retail is some of the other merch. I bought a Little Big Planet doll thing for the house yesterday and would definitely pick up a few t-shirts or companion cube keyringsetc. if that stuff was available in store.

    • zarfius says:

      That’s a pretty clever idea to sell other merch in a gaming retail store. I think these retails stores have to consider other options because buying games online is such an attractive option these days. Getting a game in a box with a manual just doesn’t cut it anymore. Many games are just as good if not better on PC over the console and in Australia a game on Steam costs half as much as the retail version. So many customers are running out of reasons to walk into a retail store.

      That said, I do wonder about the shelf life of t-shirts and keyrings. Many games tend to have a fairly short shelf life and maybe the merch wouldn’t sell once people get bored with the game. It would work if they where selective with the merch though. Portal and GTA merch would be pretty timeless.

    • serioussgtstu says:

      It’s weird that you mention that specific store; I actively avoided the GAME on Dawson street because I’d had such bad experiences with their staff. It was impossible to have a conversation with them, like I usually would with staff in other stores and I continually felt like I was being talked down to by them because I liked video games. It was really bizarre.

      But that’s just my experience, I’m sure I’m wrong. I hope their sit in pays off. Also just as a side note, they once asked me “Xbox or Play Station?” when I was buying my nephew a copy of Halo reach. It must have been his first day or something.

  5. Premium User Badge

    drewski says:

    I guess most of the people who lost jobs would be in casual positions anyway, so probably aren’t entitled to a redundancy payment.

    What usually happens in this type of situation is that the buyer assumes the debt, then pays a purchase price of “what the administration spent adminstrating + £1″. Doesn’t leave much, if anything, for unsecured creditors unfortunately.

  6. LuNatic says:

    What’s the bet that the management staff who ran it into the ground kept their jobs?

    • Optimaximal says:

      I don’t think they did. Gamestation’s CEO has been appointed head of the new ‘management’. No mention of the GAME heads.

    • Premium User Badge

      jezcentral says:

      Seriously, I’d love to know what the people who were in charge thought they were doing. People have been complaining about GAME saying exactly the same thing for YEARS. I honestly think that anyone who has posted on a gaming forum in the last few years would have done a better job than at least one board member. They genuinely seemed clueless and just slept-walked their way to administration.

    • Premium User Badge

      El_MUERkO says:

      I’ve felt for a long time that GAME was a very slow Pump and Dump, they expanded past anything sensible, small towns with 3/4 GAME and/or GameStation’s in them were never going to be viable, it was just smoke and mirrors to dazzle potential investors and push up the share price.

      I’d bet good money that GAME senior management or associates of them made a tidy sum selling off their shares before the inevitable implosion.

  7. Premium User Badge

    sonofsanta says:

    Ways to save GAME:
    * Have a decent range of stock. You would never go into a record store expecting only the top 40, so why when I go into game do I only see the current top 20? There’s a five year back catalogue for the current gen, numbering hundreds of games, but you wouldn’t know it. Don’t say that people “only want what’s popular” – as the major retailer, it is your job to broaden people’s horizons.
    * Have gaming nights in the style of Games Workshop. Get people to come in 7-10pm to play Mario Kart multiplayer on a big projector, few rounds of MW, and show off a new release of that week. Give people double points if they buy it there and then.
    * Stop pricing your pre-owned so ridiculously. SotC/Ico on PS3 is more expensive pre-owned in GAME than as a download from the PSN, which is a Sony-run monopoly for PS3 digital distribution. That’s insane.
    * Let people try games there before they buy, and bring back demo systems. Online demos might make this seem unnecessary, but anything to get people through the door.
    * Actually fill your bloody floor space; 80% of any game store is big open space, and they’re never that busy to need that much walking room.

    There. Job done. Shame they’ll be stripped down and sold off now instead.

    • jalf says:

      Don’t say that people “only want what’s popular” – as the major retailer, it is your job to broaden people’s horizons.

      Er, no. As a major retailer, it is your job to be profitable. Broadening people’s horizons is only relevant to the extent that it increases your sales. Which it might do. Carrying *nothing* but top 20 games certainly means you lose out on revenue, but that’s a different argument, and has nothing to do with whether they are obligated to broaden anyone’s horizons.

      * Have gaming nights in the style of Games Workshop. Get people to come in 7-10pm to play Mario Kart multiplayer on a big projector, few rounds of MW, and show off a new release of that week. Give people double points if they buy it there and then.

      Good idea, but (1) requires you to hire staff who cares, and who has a clue. They’re more expensive than your average guy desperate for *any* job he can find. (2) those staff become *even more expensive* when you have to ask them to work 7-10pm. I’m not saying it wouldn’t work, but like anything, it’s a tradeoff, and there are downsides as well as advantages.

      • Premium User Badge

        sonofsanta says:

        But by broadening peopoe’s horizons, they are encouraging them to come in and buy more games more often than just the MW/Fifa stuff that is sold as a loss-leader by supermarkets. It would make them more profitable. And I think it is their responsibility, because at the moment they just whinge about competition from supermarkets and the effect that a big game being delayed has, when they themselves are the people with the most power to change this.

        Game nights may require more knowledgeable staff, but it doesn’t seem to have hurt GW’s profitability and share price (although having a significant portion of the popular mindshare for their middle-class crack helps them as well, of course). And again, more knowledgeable and helpful staff would lead to greater brand loyalty and in turn, more sales.

        Of course, the obvious answer was actually doing downloads right, as everyone else on the internet has rightly pointed out. It just seems like they sleepwalked into this when they were so many things they could have tried to reverse it.

    • Milky1985 says:

      “Stop pricing your pre-owned so ridiculously. SotC/Ico on PS3 is more expensive pre-owned in GAME than as a download from the PSN, which is a Sony-run monopoly for PS3 digital distribution. That’s insane.”

      Its supply and demand, theres little supply but a bit of demand so the price stays high. Its als the case that if they have spent £20 on a tradein, they would be stupid business wise to lower the price for about a year so that they can make money on it. Also sony undercut themselves with the retail price, maybe this monopoly is being abused?

      “* Let people try games there before they buy, and bring back demo systems.”

      I agree with demo systems, would be awesome, but would only ever be for the big games you mention.

      “Actually fill your bloody floor space; 80% of any game store is big open space, and they’re never that busy to need that much walking room.”

      Actually stores i have been in have been the opposite, and reports from what other people have said seem the same as well. The stores are too small in places, the hammersmith and westfield stores are far too cramped and hard to get around if theres more than 5 people in there! Not sure how they can fix that really without annoying either end of the market.

      Lets face it, and this may be shocking, us as people who like video games a lot and do our research are NOT there primary market. What we want is probably not what there target market wants :/

      • Premium User Badge

        sonofsanta says:

        Lets face it, and this may be shocking, us as people who like video games a lot and do our research are NOT there primary market. What we want is probably not what there target market wants :/

        But if they can’t keep us happy – us, the major geeks, the big spenders and investors in this sector – then effectively their business model is “keep the proles ignorant”, which is a pretty daft tactic. Essentially they’re committing to a high turnover of customers – as people get more into gaming, talk to more people about it, they’ll realise that online is cheaper to buy, and GAME are then relying on another newcomer to fill their boots. Which has worked ok so far because gaming is still growing, but once the market starts to mature, well… it may not be a coincedence that all this has happened just as gaming has become the biggest entertainment sector in this country.

    • cosmicolor says:

      About the gaming night suggestion, HMV do something like that known as ‘Gamerbase’ and it actually works quite well when they don’t half-arse it. One of the HMVs that were in my area (Reading) had the flagship one until it closed down :(

  8. Nallen says:

    When I went in the very store pictured above on Saturday I attempted to purchase 3 items all on the shelves, none of which they had. Apparently they have to keep it on display due to ‘policy’.

    On the flip side, they appear to have a million copies of Fifa 10 on PS3 in a warehouse somewhere as they had 30+ copies of that out at 99p each.

  9. Premium User Badge

    Big Murray says:

    Sounds like they’re …
    *shades*
    … back in the game.

  10. Tony M says:

    I think you can count on the Console companies carefully controlling online prices (ie keeping them high) in the next gen, so there will still be a big market for boxed console games, unlike PC where “online” often means “cheaper”.

  11. Velvetmeds says:

    “The other big question is, how long is gaming retail really a viable prospect?”

    Forever. Retail >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> DD

    • Delusibeta says:

      I imagine you don’t play many PC games then, or have yet to discover the joys of GOG.

      • Phantoon says:

        Anyone want to play Descent 2 deathmatch?

      • Velvetmeds says:

        What does gog have to do with anything?

        • Optimaximal says:

          They stock digital versions of a number of PC games that have long since been discontinued by their original publishers. You would not find their products at retail, hence in this case, *ahem*…

          DD >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>> Retail

  12. sockpuppetclock says:

    This is the meanest April Fools ever.

    Next Article: GAME Turned Off While It Was Saving: Back To Administration

  13. Jorum says:

    Game’s biggest problem (other than stupidly large number of stores) is obsession with pre-owned games and top 20.

    By only focusing on “top 20″ they are competing with Tesco. So yeah good luck with that…

    Pre-owned games take up like 75% of their space. Which because of pricing sits on shelves wasting space until they are so out-of-date no one is interested.
    And with pre-owns they are competing with all the other trade-in stores who do this better than them, (sell cheap, quick turnaround etc) rather than concentrating on their supposed market position as a specialist retailer.

    So instead of competing with Tesco and Cash-Converter crowd, how about actually being a specialist retailer and stocking a comprehensive catalogue.

    If I want the latest Harry Potter or celeb biography or Madonna album I go to Tesco.
    But if I want a particular book or album I go to Waterstones and HMV because I know they’ll have it, and I’ll also just go there without anything in mind because I might find something cool just browsing. That’s where Game should be.

    The last time I tried to buy a non-downloadable game I went looking for Xenoblade and Last Story and could find neither despite my town having three game/gamestation stores. So they lost out on £80 right there.

    I’m led to believe that new PS will have account -based DRM for everything, which will remove pre-owned market. Rather than hurt Game it may actually help them if it forces them to concentrate on holding proper stock of games.

    • Milky1985 says:

      The pre-owned market was keeping them afloat, they make sod all on new games so the bit you hate is what they need to work cause publishers have been playing hardball with prices and trying to wise RRP when stores know people will not want to pay that price (ironically people say they are playing hardball because of pre-owned so its another one of those self fulfilling prohacy’s, publishers don’t want pre-owned so they push retail, so they need to go pre-owned to make the money :P)

      • Jorum says:

        Fair enough. I can’t really see any long term viability then.

        Given that games are by definition digital products competition for an outlet that has to pay for rent, wages, lighting, heating etc seems hopeless.

        GOG et al are in an even better position than people like Play and Amazon – they at least have to pay for warehouse services, GOG just needs a server.

  14. Hentzau says:

    By the way, while high street retail has been dead to me for a long time I wouldn’t start ushering in the Glorious Digital Revolution just yet when so much of the broadband in this country is — if you live outside of a built-up area — frankly atrocious. I have a 50 GB download cap that I have to share with two other people; this lets me download maybe one small (~6GB) game per month, and I can’t even do that if someone has decided to release a multi-gigabyte patch that month. Physical media is still very useful if, say, I want to play Shogun 2 without downloading 25 GB of data.

  15. trjp says:

    What I found was quite funny was their comment about “refocussing the business in the online space” – the business had, until recently, THREE websites selling games…

    How do you ‘refocus’ that!? 4?? 5?? Just one decent one???

    Put another way “we intend to make a website using the charred and dying husk of the name because everyone will love that – remember Woolworths?”

    Game was a stupid name for a business anyway – never name your business after what it sells (see Amazon.com and not Books.com)…

    • Jorum says:

      Possibly they mean going into digital distribution. Unfortunately for them that’s already probably saturated marketspace. Can’t see much room for yet another channel, especially without any unique selling point to get foot in the door. And really, do you want to trust Game with your download and customer support
      etc.. At least at the moment once you’ve got the disc from them they can’t fuck anything up.

  16. Initialised says:

    Your GAME is being saved please do not power off or shut down!

  17. Snargelfargen says:

    “They do offer downloads on their site, but only on very few games, and when they do the prices can be utterly peculiar. More, you’d never guess they offer downloads when looking at the front page – it’s clearly not a priority.”

    The disparity between boxed and online prices is because Game is sitting on a large inventory of boxed product from closed stores. Game loses money for every product that sits in a warehouse (or closed retail store), so it isn’t surprising that they are pricing the boxed games more attractively at the moment.

    The last resort is sending the product back to the distributor, who may refund a percentage of the price, but at that point shipping and storage costs have already been lost.

    Edit: Their priorities are still messed up though. Game should be in the mindset of using the online storefront to make a profit instead of mitigating another department’s losses.

  18. InternetBatman says:

    I can only speak for Gamestop, but I assume the same is true for Game. They need to lower their prices competitively with other retailers like Amazon and Steam. Deus Ex is a great example. Within four months it was below $20 on Steam and Amazon for sales. It took months and months for Gamestop to follow afterwards. They wouldn’t have to keep prices the same, just at a similar range while people are still talking about a game.