GAME in serious trouble

Beefy78

Pageant Messiah wrote: »

IMHO the thread started about Game being in trouble (and their subsequent collapse) I think that discussion about how they got into trouble and it's future effects on gaming in general are very much a part of the discussion.

There are some posters here including yourself who quite rightly want to highlight the current situation that the staff find themselves in and that highlighting is being drowned out by the discussions. I think that a seperate "Support Game Staff" thread or similar would be warranted for this.

I completely agree. It's not off-topic. It's very much on-topic.

jill_valentine

Pageant Messiah wrote: »

IMHO the thread started about Game being in trouble (and their subsequent collapse) I think that discussion about how they got into trouble and it's future effects on gaming in general are very much a part of the discussion.

We know exactly how they got into trouble though - the Gamestation expansion fiasco, which has been detailed at length more than once and then buried in the arguments about RRPs and is cited in all the articles on the issue.

Not downloading, not Steam, not Tesco. The company expanded too big too quickly at the wrong time, got caught out by the Mergers Commission, and were left with an unsustainable footprint where they had to try and maintain three (or more!) stores in direct competition with each other on the same street.

The dawn of downloading has hurt Game sure, but it wasn't the fatal blow. The download-only future may be on the way, but it's not here yet, and the Irish stores of Game did fine business right up until the Mass Effect/EA issue undermined consumer confidence - they were sacrificed in an attempt to preserve a foothold in the bigger British market.

Procrastastudy

Again I ask what source have you that the Irish Stores made a profit?

I know for a fact that managers were never (or rarely) given P & L statements. Had GAME made a profit on every unit it sold it possibly could have supported 600 stores to be honest. Given that 70% of the business came in Nov - Jan and they couldn't even begin to accomadate the loading in late Nov to Early Jan.

While I agree that GameStation probably was the killer blow to thing that anti-competative practises from Tesco and HMV, the move to online shopping and the further move to direct downloads didn't do for GAME is a bit naive.

I also asked the Mods to detangle this about 2 or 3 pages before you did and if you have a look 2 or 3 of them just carried on the conversation - so to be fair I think we've the answer on that one. Personally I think this is a valid discusion on why they we under - but fair enough you disagree. I suggest again starting a new threat for GAME sit in news as this one seems to be very much alive on "serious trouble".

On a semantic note - can you be in "serious trouble" when you are "well and truly dead"?

Pacing Mule

jill_valentine wrote: »

We know exactly how they got into trouble though - the Gamestation expansion fiasco, which has been detailed at length more than once and then buried in the arguments about RRPs and is cited in all the articles on the issue.

Not downloading, not Steam, not Tesco. The company expanded too big too quickly at the wrong time, got caught out by the Mergers Commission, and were left with an unsustainable footprint where they had to try and maintain three (or more!) stores in direct competition with each other on the same street.

The dawn of downloading has hurt Game sure, but it wasn't the fatal blow. The download-only future may be on the way, but it's not here yet, and the Irish stores of Game did fine business right up until the Mass Effect/EA issue undermined consumer confidence - they were sacrificed in an attempt to preserve a foothold in the bigger British market.

Note - My Reply here references your original post prior to editing (originally quoted administrators quote from an article posted on mcv)

The role of an administrator is to salvage what he/she can from the assets of the company and sell them on. The last thing an administrator is going to give as reasons a business failed are reasons which any prospective buyer would also face and not be able to overcome. It's the best thing now for them to pin it all on the Gamestation over expansion fiasco - point to that as the reason, strip out a load of stores and then tout the business as being profitable now that this excess baggage has been shed.

As for the Irish stores - my understanding is that they were not profitable at all and had suffered disastrous sales drops in the last year in particular. That's only hearsay though from a couple of managers I know - no doubt you have someone in the know too saying otherwise. Only someone high up the chain could really say for sure. But all that said if the Irish stores were profitable - and given their geographical spread / non overlapping as in the UK I would have though the administrators would have kept them open and showed them as an example of how things would be post stripping out of the overlaps in the UK from the Gamestation merger. Genuine question here and I don't know the accurate answer. Has there been store / country wide closures outside of UK / Ireland in the 9 other territories they operated in ? I don't think there was but I'm open to correction. If Game Australia, Norway, France, Spain etc are still trading then it's reasonable to assume that Irish stores were closed because they weren't profitable and not as some sort of sacrifice as you said.

Game had 1200+ stores operating in 11 different countries - around half of which were in the UK. Prior to the takeover Gamestation itself was a profitable business. Game was also a profitable business (back in 2007) The gamestation stores after takeover made up a small percentage of the overall store numbers. The actual losses started only when the economy went south along which came the double whammy of all the other pricing and market issues referred to earlier in the thread. Throw in digital distribution and the loss of sales market share to it and you have a cocktail of what put the company into trouble. Yes they would have had a chance to handle it better if they were smaller, had less stores and no overlap but the actual expansion itself and just the expansion itself was not the root cause of the problems the company faced.

Procrastastudy

Some of the territories GAME operate in had already been sold off prior to the UK parent company going under.

I find it very hard to believe that the Irish stores were profitable over the last 2 years given the massive fall off in sales and the way margins were squezed by the issues that have been described.

Korvanica

are the Dundrum lads doing having a sit in ? Walked by today and saw that the place is all packed up. Judging from the rest of the pics of shops I've seen over the last few days, the rest of the stores are not doing anything (no packing up etc..).

Zapp Brannigan

Blanch is all packed up but they're sitting in.

Pacing Mule

As a matter of interest how does the sit in work from a legal perspective when the company has leased the premises as opposed to owning them directly.

I'm presuming that for arguments sake Blanchardstown shopping centre will have been stung by Game when they fail to pay the next rent installment. In that case the staff are sitting in occupying a retail unit that effectively has nothing to do with the company they are protesting against as ownership has reverted back to the shopping centre.

Surely packing up and sending back the stock is letting go of the leverage needed to influence the administrators ?

Lucious Sweet

Limerick looks like its all packed up and gone too, though the lads are still there.

METROID

I know most GAME stores had shut up shop earlier in the week but they reported on the news that some would be trading up until end of business today. So does anybody know if any stores were open today? Were there any good offers?

Procrastastudy

They've packed up so PWC can't say they didnt do what they were asked and, inter alia, sack them all / not pay them.

They are still sitting in.

Godd Luck guys.

Procrastastudy

METROID wrote: »

I know most GAME stores had shut up shop earlier in the week but they reported on the news that some would be trading up until end of business today. So does anybody know if any stores were open today? Were there any good offers?

That either been misunderstood or just plain wrong I'm afraid.

Blowfish

Pageant Messiah wrote: »

Surely packing up and sending back the stock is letting go of the leverage needed to influence the administrators ?

Indeed.

A much more fun way to do it publicity wise would be to pack away the new stock (but not send it), then just keep opening the store every day and let the public wander in whenever they like and play random preowned games on their screens. They could even set up a competition or two for the craic.

Procrastastudy

To clarify they are indeed not sending it back. They are just packing it. In what? Who knows as PWC never sent them any boxes by some accounts

Nice idea though that when its all secure out the back let people in - might make it easier for baliffs etc to get in though. Plus there is no insurance anymore.

marco_polo

Pageant Messiah wrote: »

Game had 1200+ stores operating in 11 different countries - around half of which were in the UK. Prior to the takeover Gamestation itself was a profitable business. Game was also a profitable business (back in 2007) The gamestation stores after takeover made up a small percentage of the overall store numbers. The actual losses started only when the economy went south along which came the double whammy of all the other pricing and market issues referred to earlier in the thread. Throw in digital distribution and the loss of sales market share to it and you have a cocktail of what put the company into trouble. Yes they would have had a chance to handle it better if they were smaller, had less stores and no overlap but the actual expansion itself and just the expansion itself was not the root cause of the problems the company faced.

According to this telegraph article their market share had actually been slighly on the increase, but the total video market has contracted by something like 40% since 2008.


This article make the GameStation purchase look even worse again.

http://paidcontent.co.uk/article/419-how-game-group-blew-it-digital-strategy-was-not-adopted/

It didn’t have to be this way. paidContent understands Game Group, three years ago, sought strategic proposals for survival in the years ahead…

•Executives were given a strategy that made clear the industry would see a tipping point from physical to digital game distribution in 2012.

•In response, the strategy recommended cutting down on bricks-and-mortar store count.

•And it made suggestions for using the Game brand to power digital storefronts on PC, console and other platforms.

But paidContent understands Game, under then-CEO Lisa Morgan, did not adopt the strategy, deciding instead that such an advance was not necessary.

At a time when Game was being urged to swap bricks for clicks, it made an even bigger foray in to the high street by acquiring Gamestation. Now it is not uncommon, in some towns and cities, to find two Game stores and an additional remaining Gamestation just a few streets apart.

mossy2390

GCDLawstudent wrote: »

Again I ask what source have you that the Irish Stores made a profit?

I know for a fact that managers were never (or rarely) given P & L statements. Had GAME made a profit on every unit it sold it possibly could have supported 600 stores to be honest. Given that 70% of the business came in Nov - Jan and they couldn't even begin to accomadate the loading in late Nov to Early Jan.

While I agree that GameStation probably was the killer blow to thing that anti-competative practises from Tesco and HMV, the move to online shopping and the further move to direct downloads didn't do for GAME is a bit naive.

I also asked the Mods to detangle this about 2 or 3 pages before you did and if you have a look 2 or 3 of them just carried on the conversation - so to be fair I think we've the answer on that one. Personally I think this is a valid discusion on why they we under - but fair enough you disagree. I suggest again starting a new threat for GAME sit in news as this one seems to be very much alive on "serious trouble".

On a semantic note - can you be in "serious trouble" when you are "well and truly dead"?

i have seen the sales sheets, The Irish stores as a whole were NOT profitable, around half of the Irish were making a profit but not enough to make up for the losses in the other stores and the set up and distribution and the extra management costs etc..etc.

it was pretty inevitable really unless the stores seriously increased there sales game could not operate their Irish stores at a loss for ever.

unfortunate but true

PseudoFamous

mossy2390 wrote: »

i have seen the sales sheets, The Irish stores as a whole were NOT profitable, around half of the Irish were making a profit but not enough to make up for the losses in the other stores and the set up and distribution and the extra management costs etc..etc.

it was pretty inevitable really unless the stores seriously increased there sales game could not operate their Irish stores at a loss for ever.

unfortunate but true

Now, this might sound completely mad, but why didn't they just close the ones not making a profit?

Pacing Mule

PseudoFamous wrote: »

Now, this might sound completely mad, but why didn't they just close the ones not making a profit?

It's not as simple as that. If they were tied in to long leases on those stores they couldn't shut them down without paying any penalty clauses in those leases (at a minimum they'd be liable to pay the rent for the remainder of the lease but in some cases may have a penalty clause above and beyond that for an early shut down) It could have cost millions to shut down select stores only. If the company liquadates as a whole then those leases are effectively torn up. You'd also have the situation of operating 4-5 stores only in a foreign territory with the expense of area management, local offices etc being spread out over less stores - possibly making the handful of profit making stores loss making.

mossy2390

^ yeah that in a nutshell, there is a lot more to it than store profits there is the whole back office, area management etc to take into consideration.
meaning even if the profitable ones were left open it may not have covered the costs of the irish operation itself as a whole

jill_valentine

Over in the UK, Game/PWC were canny enough this time to get the stores packed up and keys handed back before informing them they weren't getting paid notice and redundancy.

http://www.mcvuk.com/news/read/former-game-workers-furious-at-late-wage-admission/093715

blackius

BBC news this morning is reporting a venture capital purchase of game and that all stores will reopen with all jobs being saved.

Oafley Jones

blackius wrote: »

BBC news this morning is reporting a venture capital purchase of game and that all stores will reopen with all jobs being saved.

No they're not. From the BBC


The investment group, Opcapita, will announce on Sunday it is buying a large part of the troubled Game Group out of administration, the BBC understands.

The deal will keep open 333 stores and save 3,100 jobs.

Half a dozen banks, led by Royal Bank of Scotland, who are owed £85m, have approved the takeover, says BBC business editor Robert Peston.

Last Monday the video game retailer went into administration, with 277 stores closing down immediately.

Administrators PricewaterhouseCoopers (PwC) also announced 2,104 staff would be made redundant but the remaining 333 stores were kept open as they searched for a buyer for the business.

The retailer had suffered from high fixed costs and an ambitious international expansion.

Its' business has been hit by competition from online retailers.

Richard Wilson, chief executive of games industry trade association Tiga, welcomed the deal but said Game would have to develop its online business to survive.

He said: "It's important for the company to change to consumer spending habits, and it's really vital that Game also appeals to video game developers. Many video game developers in the UK are of course selling online as well.

"Game is going to have to change its strategy but that doesn't mean it's impossible, and the fact that Game has got this new backing behind it, this new management, I think that's all for the good."

FutureGuy

So help me, if these stories about Game reopening in Ireland are April fools jokes, shame on the people that came up with them.

AceCard Jones

I've heard they're keeping 300 odd stores in the UK open but like most have heard nothing about their plans for Ireland. Apparently GameStop is still interested in their foreign business so let's hope that doesn't include here. I Hope they reopen here.

Notorious

I work for game. There's no news of reopening stores.

Edit: sorry, worked.

jill_valentine

This stuff is not a joke to some. It's been the only thing on my mind for the last seven days I've spent trying to sleep on cardboard boxes under lights I can't turn off and muzak I can't turn down, with a bunch of other people, in a heatwave. No I didn't buy it, but that doesn't diminish the fact that its in pretty crappy taste.

Notorious

jill_valentine wrote: »

This stuff is not a joke to some. It's been the only thing on my mind for the last seven days I've spent trying to sleep on cardboard boxes under lights I can't turn off and muzak I can't turn down, with a bunch of other people, in a heatwave. No I didn't buy it, but that doesn't diminish the fact that its in pretty crappy taste.

I share your pain, except we can shut off our lights and we tend to knock off the music at a respectable hour.

Fight on brother (or sister)!

RobbingBandit

I apologize for any offence caused by the stupid April Fools I posted earlier today.

Mr E

It was in bad taste, RB. Game employees are reading (and posting to) this thread.

Let's draw a line under it and move on. I'll remove some of this afternoon's posts around the topic.

gubbie

RTE saying that the deal doesn't include the Irish stores:

http://www.rte.ie/news/2012/0401/deal-saves-british-game-stores-irish-jobs-lost.html#video