UK's Largest Specialist Video Games Retailer Enters Administration 172
RogueyWon writes "The GAME Group, owners of high street chains GAME and Gamestation, which between them account for a large majority of the UK's specialist games retail market, have entered into administration. In the hours following the Group's entry into administration, hundreds of stores were closed and thousands of staff made redundant. While some of the factors behind the Group's downfall, such as stores located too close to each other and overly-ambitious international expansion, were likely unique to the UK-based company, other factors, such as price competition from supermarkets and online retailers, as well as a reliance on a fickle pre-owned games market, may have wider application."
Not a surprise (Score:5, Interesting)
Doesn't surprise me, for a variety of reasons.
As mentioned in TFS, they were crazy when it came to sotre placement. In my town, there were two GAME stores and one Gamestation all on the same shopping high street. There used to be a third GAME in a department store two minutes walk away, and there was briefly a fourth GAME directly opposite one of the current two. They all stocked exactly the same thing, with no great specialisation. What on earth did they think they were trying to acheve?
Another reason- failure to move into the online space themselves. They do do online retailing these days, but they compare poorly to the likes of Amazon. When you're sat at your keyboard, and you open two websites, and one has a betteer range and is cheaper than the other, why would you use the latter? Instead of capitalising on their huge brand presence, they just let themselves slip. their digital download service isn't even run by them- it's just a rebadge of a whole different company's website.
A bigger reason, though, was just that they weren't pleasant places to be. They're competing against souless supermarkets and anonymous online mail-order companies. So what was their solution? Become as souless and supermarket-like as possible. Cram in as many shelves as possible, with no aisle space, no demo machines, no nice displays. Gaming is obviously a hobby which a lot of people take quite seriously, but instead of trying to tap into that sense of a hobbyist community, and trying to become a hub for that (lucrative) community, they just focussed on selling as many things as possible as efficiently as possible- something they couldn't hope to win on, against their competition. Compare and contrast with Games Workshop (seller of tabletop games and models); gangs of enthusiastic hobbyists hang around in there for hours at a time, playing games against each other, organising competitions, soaking up the atmosphere. You can buy Games Workshop models cheaper online or through some of the resellers- but the flagship shop is the place to be, and so is where most people buy their stuff from.
Digital distribution and death of second hand (Score:5, Interesting)
Re:Not a surprise (Score:5, Interesting)
GAME and EB Games will join the other retail dinosaurs like Harvey Norman in retail extinction.
And staff it with people who know nothing about games.
EB games Australia have gone one step further and play annoying techno way too loud. If I do buy a game locally (I.E. I want it today and am willing to pay the premium) I'll generally walk down the street to the nearest JB, no music, easy to find stuff and slightly cheaper.
Trade-in prices (Score:4, Interesting)
Trade-in prices is what put me off going to Game. I'd take in something recent, like, say, Street Fighter X Tekken and they'd give me maybe 13GBP for it, or 16 if it wasn't "scratched". They'd then sell it second hand for 30GBP (or 28 if it doesn't come with instructions or a box).
Meanwhile, the independent shop near it, CEX, would give me 28GBP cash, or 30GBP exchange.
Re:I worked in game for several years.. (Score:4, Interesting)
The American customer service model does not work well in Britain. A lot of American chains forget that when they come over here. If an Englishman wants help, he'll come and find you and ask. Otherwise, leave him the hell alone.
If you come up to me all smiles and "Hello Sir, can I help you", I don't think "Oh, that's nice", I think "What are you trying to sell?" and "How can I get rid of you?". If you try to learn my name, or start trying to steer me towards products, I actually feel more like a number, not like you're helping. And English sales assistants can't do smalltalk well at all, and you find them approaching you with an offhand comment about the weather before launching into sales patter as an example of their "engaging" with the customer.
If you approach me in a shop as a member of staff, you will be politely turned away. If you're persistent, I will just walk unless I really *NEED* the thing I'm trying to buy - I've done it several times. I *KNOW* whether I need your help or not, so listen to me when I tell you. If I look incredibly baffled, of course you can try to ask, but chances are that most geeks and kids will say they're fine and want to carry on on their own. And, kid, I was writing computer games before you were even born - don't try to tell me "What you really want is...". If you haven't got what I want, tell me. Hell, point me to your competitor. Because you won't make any money out of me, I'm costing you valuable sales time AND I will return if you're honest and help me buy what I want rather than what YOU want me to buy.
To be honest, it baffles me even in Europe, and is a small part of the reason why the English are considered rude abroad. You can spend 30 minutes talking to a pharmacist in Europe (even as a native) when all you wanted is some sunscreen, and they will deliberately put things out of reach or on counters that deter browsing just so they *can* talk to you.
In England, walk up to the shelf, pick it up, buy it. There's usually a nice assistant available if necessary but if she says more than "Hello", she's getting in your way. The English sometimes see such "personal" service as fake because - well, we don't have it and don't understand it, and a lot of the time it is completely fake. Do I really believe that spotty oik #8 cares about me leaving his shop with what I wanted to buy, even if it's only a £5 game?
GAME were incredibly annoying for this. "Do you need help?" four or five times per visit. Not buggering off when I don't. When I do (or the person I'm with stupidly launches into a ten minute explanation of why we're there), they steer you to things that you just said you DON'T want (whether because of sheer stupidity, high sales pressure, or just bad knowledge of their industry area) and hassle you to buy a DS when you only went in for a £5 PC game. And NO imagination over what to stock. Top-end £50 Wii-titles and nothing else, tiny PC section at the back with top-end £50 AAA titles that need Steam accounts of GfW to activate anyway. Where's the budget section? Where are the indie games? Where's the stuff that people WOULD want to buy on impulse?
They also had high prices compared to online sales and, I'm sorry, nothing that I'd actually buy. I used to be in there all the time as a teenager, but haven't bought anything in one for literally YEARS. The pre-owned section gets the most attention from other customers, and the only time they're busy and not just a small shop of geeks and kids is when Christmas is coming and they've secured a few units of whatever the next big thing is. They remind me a lot of the Games Workshop stores - from outside it's all kids and geeks, which is enough to put off e.g. girlfriends, mothers, grandparents, etc. but at least Games Workshop have half-decent service and sell them what they wanted.
In comparison, the other geek/kid hangout of the local exchange shop (Cash Convertors, CEX or some local equivalent) had lots of customers
Re:Gak, the Britishisms in that article were too m (Score:4, Interesting)
In the US, CH11 is used strategically
Administration is used strategically in the UK too. 7Global, a DC/hosting provider did it while we were using their services but didn't tell us. I'm not sure how it was arranged (I think it was a management buyout while in administration) but they were in administration for 24 hours meaning they could walk away from certain contracts and debts. This also nulled our contracts with them, which our clients could have been very unhappy about because that meant we were in breach of our contracts with them by not being able to guarantee things (that were previously guaranteed by proxy via our contract with 7Global). They also moved their entire operation (which went very badly leaving us with no service for days) without letting anyone know the plan (there was a planned maintenance period that night which was down as "working on the server racks") but that is another bitter story.
lt;dr: "strategic administration" happens in the UK too, and quite often in fact but it is usually not widely reported.