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.
It’s strange; I only ever go into GAME if I’ve failed to get what I want online or Gamestation (yes, I know they’re the same parent company) or Asda don’t have what I’m after. I do turn to them for pre-orders as I’ve found them reliable but it’s just not somewhere I turn to regularly on the High Street.
I almost put them in the same bracket as HMV, which I consider to be well stocked and offer a lot of choice but just naggingly overpriced compared to what I can find either online or at the supermarket.
GAME certainly have the stock levels and a pre-order system that’s next to faultless, there’s no argument there, but as you say the pricing, more often than not, is way to high or, at times, just completely bizarre.
£39.99 for a second hand copy of DIRT 2 two months after the games launch? New and pre-owned PS3 Platinum titles both at £19.99? Pre-owned games costing more than new titles in some cases? Not very consumer friendly at all.