The 21st of April saw shockwaves sent through the industry as high street games retailer GAME saw CEO Lisa Morgan step down after 14 years of service. COO, Terry Scicluna, also announced the same morning that he is also to stand down, handing over the reins to interim CEO Chris Bell, who joined the board several years ago.
The news came in the same week as GAME announced a further fall in profits along with a cut in staffing hours across the chain at store level. The company’s total annual profits had fallen 10 percent across the 1,400 outlets that currently operate across Europe and Australia, with GAME Group’s share price dropping to 89 pence within an hour of the financial and strategic update. Add into the mix the announcement of 127 store closures by 2013 and things aren’t looking to rosy for the retail giant.
GAME, however, are confident in their future prospects with chairman, Peter Lewis, stating: “We have delivered the second best trading performance in our history. Our results were delivered against the backdrop of a very difficult trading environment, which saw the global PC and video games market decline by over 20 per cent.”
Chris Bell also went on to insist that Lisa Morgan’s decision to step down is in no way related to the company’s current financial status. Whether there is any truth to this, and given Lisa Morgan’s obviously successful career-for the best part-with the company, is something that only the top brass at GAME will ever know.
So what future does lie in wait for the UK and Europe’s number one video games retailer? While there is no doubt that the economic turndown has had an impact on the company’s overall profits the last year or so it’s abundantly clear to anyone that there is more to GAME’s falling profits than meets the eye.
In recent times GAME, more than once, has come under fire from consumers for not meeting the demands of a competitive market. Accusations that GAME are “fleecing their customers”, according to one gamer we spoke to, are arguably well founded when you can walk into any GAME branch and find second hand titles for as much as £42.99; titles that are as much as £5 less anywhere else – £10 if you shop online – and are also brand new. Of course, no one is forced to shop at GAME, but with mounting pressure from online retailers and the supermarkets offering vastly discounted prices to that of the high street, perhaps customers are choosing to take their wallets elsewhere when it comes to purchasing their video games and accessories?
Whatever the case, whether its recession or consumers perceiving overpriced products, it’s clear that GAME’s current business model isn’t working and desperately needs addressing if they’re to continue to be a dominant force in the retail games sector.