33% of UK game stores in 'financial danger'
by Alexander Sliwinski 
{ Sep 4th 2007 at 11:33AM }
MCV reports that new research by a marketing group finds that 33% of UK game retail companies are "in financial danger." Companies like GAME, Gamestation, Blockbuster and Woolworths (seriously, still got those over there?) are "blatantly selling at a loss to capture market share." Pre-tax profit was found to be 0.7% and growth stood at 8%.Meanwhile, GameStop continues to have record growth and profits. All these other companies need to do is copy GameStop's Rules of Acquisition and they should be all clear. Pay minimum wage, deal in used goods, and make insane amounts of money on pre-orders. That's the way to profit.
Reader Comments (Page 1 of 1)
maxchalk @ Sep 4th 2007 11:36AM
Foolish hew-mons don't know how to run a business properly.
Jerk Face @ Sep 4th 2007 11:37AM
F*cking Gamestop. They have to be so f*cking GOOD at what they do, even though the customers suffer for it.
Fernando Rocker @ Sep 4th 2007 11:49AM
Gamestop its more like a pawn shop than a videogame store.
baby sea tuna @ Sep 4th 2007 11:50AM
What an original thought, Fernando!
Robotochan @ Sep 4th 2007 11:38AM
The thing with the UK is you can always get a better deal online, instead of buying Half-Life 2 for £35 in HMV, Virgin, GAME etc. on the high street I got it for £18 online, and it's like that for a lot of games.
Manic Inc @ Sep 4th 2007 11:50AM
I never use high street stores for buying games. Online is always cheaper, so why go anywhere else?
I doubt this will effect Blockbuster and Woolworths to a great degree. I'd guess that only a small percentage of their money comes from games, especially with Woolworths.
ThornedVenom @ Sep 4th 2007 6:10PM
Online purchasing is what the hardcore crowd does. Shops are good at showcasing.
Oh, and some people hate relying on online purchases due to security paranoia of their credit cards.
Dave @ Sep 4th 2007 11:58AM
Yeah Game used to be good but then they done away with lowest price guaranteed. I totaly agree with you guys you can get it cheaper online. Also the supermarkets are offering better prices then game and hmv these days. Asda is sometimes cheaper than online.
Dale @ Sep 4th 2007 2:28PM
They did away with that lowest price guarantee because they never bloody lived up to it!
binksy @ Sep 4th 2007 12:03PM
In the UK it's not a 'proper' high street if it doesn't have a Woolworths, or a WH Smiths...
Jimmni @ Sep 4th 2007 12:05PM
There are several reasons why games retailers in the UK are in trouble:
1. They have absurd and restrictive returns policies. If you buy a console you can't return it. Period. Even if it's still shrink-wrapped. In many stores you can't even return it for store credit, none that I know of will take it back for cash. I was stood in GAME not long ago having just purchased a Nintendo DS for my brother's birthday. They handed it over counter just as he came in. I said I hadn't known if I should get the black or white, but it wasn't too late to swap. Turns out it was. They wouldn't let me swap it for the other colour, despite me not having even left the counter. Why? Because so many people today have shrink-wrap machines. Seriously. They think people will buy a console, break it/tire of it, and then re-shrink wrap it and return it.
2. Games cost $70-100. Seriously. Why on earth would I pay that?
3. Stores fill their shelves with cases for games they don't have in stock. I went to buy C&C3 the other day. I'd ordered it from Amazon but got impatient and went to town to buy it. Three shops in town sell games, and all three had it on their shelves but after queueing (for a total of about 25 minutes between the three) they'd spend 5 minutes searching in draws and out back and then come back and tell me it was out of stock. When I asked why they still had 15 copies on the shelves, then, they told me it was because they could still order it. I'll not be buying games from any of those shops again, not if they'll waste my time so willingly.
4. They often take the games out of the boxes and keep them in little. I like tearing off the shrink-wrap, and I don't want some careless/lazy cashier's grubby fingerprints on the surface of my disc.
5. Game shops here are always, and I mean always, packed with kids, mostly trying desperately to convince their dad that they need ANOTHER new PS/Xbox/PC game. The smell of sweat and farts gets pretty much unbearable at times. The only chance you have is to go during school hours, which, being a teacher, I can't do.
I'll stop there, but there are many more reasons if people want them.
GunForHire @ Sep 4th 2007 1:32PM
Wrong, wrong, wrong.
GAME has a 28 day returns policy, so long as the product is still sealed, you can exchange or refund. I know this, because I've worked there.
And GAME doesn't sell shrink wrapped machines, that's BS. Hell most of the games they sell aren't even in the factory plastic anyway.
Daniel @ Sep 4th 2007 3:35PM
GAME sold me pre-ordered Bioshock. I'm an online man now.
opifex @ Sep 4th 2007 12:17PM
the reason why these stores are sucking is because they are dumbasses when it comes to price. almost every person in the UK that knows what the internet is buys games online.. places like gamestation, HMV whatever.. sell games at stupid prices.. for example, when HL2 was released it was priced at 40-50£ and it stayed at that price for over a year or 2???
steampowered (offical owners of hl2) sold the game for what.. £20? at the moment its only £10 on steam.. so are the rest of the games on steam either 50-75% cheaper than stores.
that goes for other sites out there like play.com or ebuyer.com.. i havnt bought a game from any high street stores in some years now, saved a few hundred quid tbh! :D
Dale Massey @ Sep 4th 2007 1:22PM
Dumbasses when it comes to prices?
I see, so you're supposed to drop the retail price of a game to below cost price, to please people?
Pardon my ignorance but aren't business there to make money, not lose it?
ThornedVenom @ Sep 4th 2007 6:52PM
@ Dale: What he basically means is that whether stores aren't competing hard enough against online (whether it be ads, promotions or price reduction), or that stores aren't a viable way to sell videogames in the UK anymore.
And concerning your comment on profit... it doesn't look like they're making much right now or are facing danger, after reading the article. They have to adapt if they want to survive.
pimpdee976 @ Sep 4th 2007 12:24PM
are you serious the U.K has woolworths I haven't seen a woolworths in NY since I was 12 I'm now 32 wow
SeriousKriss @ Sep 4th 2007 12:25PM
Online sales and digital distribution is growing much faster than traditional retail. Analysts in particular should wake up and realise this already, because ATM the data they're working with is fairly incomplete.
whookid @ Sep 4th 2007 12:53PM
Its all to do with the u.k. the prices are so poor compared to other countries. In stores games are like £40 which is $80.... that says it all
Sam @ Sep 4th 2007 1:07PM
What else is hilarious is that if you go into a high street GAME store a game will cost you 39.99/29.99, whereas on their OWN website that usually does free 1st class delivery (thats next business day for non uk people) they will sell for 32.99/24.99
And that's not even counting the other online retailers who usually sell PC games for £17
James @ Sep 4th 2007 3:41PM
If GAME are selling anything at a loss, I am yet to see it.
adium @ Sep 4th 2007 1:22PM
all games in my city from shops like GAME, Woolworths, Virgin, HMV, they are £49.99 (±$100) opened, (this is more for GAME) any of them could be a return or where the shop has bought it back second hand dirt cheap.
Play.com or say ASDA, i can get it for 37.99-39.99 sealed.
who actually buys games from these shops?
Dale Massey @ Sep 4th 2007 1:32PM
Play and Asda sell sealed because they either A: Dont have a shop front, or B: Put live stock onto the shelf with security tags.
HMV, GAME, etc more often than not HAVE TO put the cases of the games on the shop for display, as they only received dummy boxes for certain games. If there arent any dummy boxes, splitting sealed stock and putting the contents into storage and the cases on the shelf is the only way to advertise and sell stock.
Are customers expected to presume the stores have all the new release behind the counter to sell to you? Its the case with many people, if they cant see something, they dont ask for it at the counter, and often have rude responses when it comes to any retailer asking them if they need assistance.
Jay @ Sep 4th 2007 1:34PM
Ferengi FTW!
James @ Sep 4th 2007 2:11PM
So they're charging us £39 for PC/Wii games and £49 for PS3/360 games and they're still losing money?
Gaming is in such a sad state here. There's a little shop in Glossop that stock import games, I think I paid about £17.99 for the US Advance Wars 2 when it was months from a UK release and at £29.
Fuck the Queen. Cept for independant shops, Asda and online stores.
Dale Massey @ Sep 4th 2007 2:27PM
Yeah, theres money to be made on import games, thats how an independant can sell for £17.99 before a game comes out, adns till make a decent margin.
The problem is, UK suppliers are bullied by the supermarkets, the suepr markets get the games at much lower prices than entertainment / specialist or independant stores, much to the point where in some instances it is cheaper to go into an ASDA to stock up on the weeks new releases rather than using a supplier to obtain them.
For a store to match an ASDA price means the store will lose money. Price protection only goes as far as when an RRP is changed, if people just decide to cut prices without an adjustment of an RRP, there wont be any protection for it. Stores would have to attempt to sell things at RRP just on the off chance an ASDA goes out of stock and the odd couple of games are sold at full price to make up for previous price cuts.
I guarantee you that in a few weeks FIFA 08 will be £24.99 in ASDA for the PS2 release. I also guarantee you that anyone who attempts to match the price will be losing bucket loads of cash.
rusted3572 @ Sep 4th 2007 2:57PM
I am sorry, but i have never seen one of those stores sell for a loss!!. They are losing out to supermarkets and the internet. I know very few people who even buy their games from a brick and mortar store anymore. Its their own fault really, why would anyone go to GAME and pay £40-50 for a new game when you can go online and get it SSOOO much cheap. For example, I am enjoying my £30 Bioshock that i imported from the us. wooooo.
Daniel @ Sep 4th 2007 3:27PM
My copy of Bioshock was £30 out of HMV, though it was the PC version. On the other hand with Vista, the PC version is allegedly better so swings and roundabouts.
James @ Sep 4th 2007 3:36PM
Uh, impulse buyers? People who want games on launch morning? Casual gamers? occasional better deal (GAME had Dawn of Sorrows for £19, whereas online and other high street stores were charging £29. My Excite Truck from Gamestation was only £19 2 weeks after launch).
Neebs @ Sep 4th 2007 2:37PM
Perhaps it should be noted that with that picture, the person who played "Quark" on Deep Space 9 plays Andrew Ryan in Bioshock.
Daniel @ Sep 4th 2007 3:25PM
And yet we pay 40% more on games than the US? So if not the stores, just who is screwing us?
Flipside @ Sep 4th 2007 4:00PM
The reason I went to Steam is 3-fold, 1st is choice, very little of what gets released makes it into the shop, only the 'Big' titles ever see the light of day, and often that means endless variations on the same themes and little in the way of original stuff, and 2, because shops like Dixons started dictating what it considered 'family friendly' software and refusing to stock stuff it didn't agree with, a la the Bully fiasco.
Considering you can pick up Leisure Suit Larry MCM - Special Edition, which was rated AO in the US, at PC World (owned by Dixon's group), but they refused to stock the UK release of 'Bully' most certainly lost me as a customer. Not because I wanted Bully, I don't even own a console, but because I take offence at having my choices dictated by people I'm giving my money to. And it WAS a loss for them, I probably spent the equivalent of $120-200 a month there in games and hardware.
Finally, is, obviously, price, the simple fact is that importing via the Internet is a damn site cheaper than going to the shops.
Flamehearted @ Sep 4th 2007 4:02PM
I think for me the pricing is the problem.
All new 360 releases in Game are full retail price which usually £40-50 quid. They seem completely inflexible about this - as you say who would want to pay that much on a regular basis when online is cheaper ?
Secondly the way they price second hand games seems to be completely random. In my local game a second hand copy of Shadowrun costs £40 and Klona £25.
They do seem to be quite greedy - I'm sure they could reduce their prices and still make money.
Mr Khan @ Sep 4th 2007 4:09PM
Rule 13
Anything worth doing is worth doing for money
Triple 8 @ Sep 4th 2007 4:31PM
Actually, Gamestop makes most of it's money off used sales.
Last week Gamestop employees were told to stop pushing reserves because they're trying to maximize the amount of used sales.
Justin @ Sep 4th 2007 4:34PM
Game and Gamestation selling at a loss? I don't believe that for a minute, they are the most expensive places to buy games in store.
Tesco + Asda FTW
ALH @ Sep 4th 2007 5:06PM
when a game first comes out, sure, but when they have their massive sales you can often get a pretty good deal on something the supermarkets stopped selling yonks ago.
ComradeTrotskii @ Sep 4th 2007 5:09PM
If you are going to succeed at retail you do one of two things:
1) Sell it cheaper.
2)Offer a superior customer service.
All of the stores mentioned in the post fail spectacularly on both counts.
I can pick up new copies of my 360 games at Tesco with my shopping for a lesser price without being subjected to the 'customer service assistants' at GAME or Gamestation. If Tesco don't have it I'll get online, again cheaper.
As pointed out the only way that any of those stores are going to make cash is dealing in used goods but most of the time I am so insulted by either the price that they offer me for a product or the price I have to pay for a used product. ("We've got that for £3 cheaper used!" "F%@*, really £3 cheaper for a used copy with no instruction manual and what appears to be human excrement on the box! How can I refuse that!")
ComradeTrotskii @ Sep 4th 2007 5:12PM
If you are going to succeed at retail you do one of two things:
1) Sell it cheaper.
2)Offer a superior customer service.
All of the stores mentioned in the post fail spectacularly on both counts.
I can pick up new copies of my 360 games at Tesco with my shopping for a lesser price without being subjected to the 'customer service assistants' at GAME or Gamestation. If Tesco don't have it I'll get online, again cheaper.
As pointed out the only way that any of those stores are going to make cash is dealing in used goods but most of the time I am so insulted by either the price that they offer me for a product or the price I have to pay for a used product. ("We've got that for £3 cheaper used!" "Wow, really £3 cheaper for a used copy with no instruction manual and what appears to be human excrement on the box! How can I refuse that!")
[I am sorry if this is a double post}
Dale Massey @ Sep 4th 2007 5:37PM
Yeah thats right, stores make 40% on games.
You keep thinking that.
Dale Massey @ Sep 4th 2007 5:37PM
Look at GamesIndustry.biz for GAME and GameStation fiscal earnings.
Theyre always plummeting and at the moment their profit is 2%. Im betting this 2% is only kept from the items which dont devalue, ie magazines, world of warcraft cards, and their own brand accessories.
Sihylm @ Sep 5th 2007 11:07AM
Ah the wonders of Karma. Over price your games and have either arseholes or morons as your customer service and you will eventually be buggered as a company.
I'll admit though that most games that I can't get from Steam or Tescos, I'll go to GAME or Gamestation to get, and I often take a trip to GameStation to see what the trade ins are like. BlockBuster has been boycotted by me ever since I bought Super Mario Advanced 2 (which was super Mario world on the gba) Thanks to blockbuster's grubby little hands method of putting carts in games I was given the wrong game (Super Mario Advanced 1 which was super mario 2).
When I went back and pointed out the mistake the complete moron on the counter said it was the right game. When I pointed it out for the fifth time he said that I was not allowed to trade the game back because the packaging had been opened (BY THE FREAKING SHOP) half an hour, a sacked retailer and a phonecall from an angry disctric manager later I left with Super Mario World on my little purple GBA.