GAME GROUP SLUMP AND THE FUTURE OF BUYING GAMES FROM THE HIGH STREET

As many of you already know, historically my experience with GAME is not very positive. This is mainly due to me being a thrifty gamer and GAME prices are just too high in these uncertain times, not to mention that their sales tactics can be too aggressive for my liking and in general, their customer assistance is more than a little over bearing.

Despite all this, I was a little saddened to hear to all too familiar headlines of the GAME Group announcing that they are expecting to have average, year-end net debt of up to £70 million and could even end up missing its EBITDA (‘earnings before interest, taxes, depreciation, and amortization’) covenants set by lenders, when they are tested on February 27th. The big newspaper headlines will send shockwaves throughout the industry because the lenders could take action against the group for breaching the terms of its loans. In reality, this probably won’t happen, but it was still enough for their shares to take a massive dive after the revenue warning.

Although it was a very poor Christmas for the chain, with sales down 17.6% in the eight weeks to January 7^th, Online sales over the holiday period actually increased 3.9%, with annual takings climbing and half a million new customers also signed up to the GAME loyalty programme.

Gamers rushed to buy latest releases such as Skyrim, Call of Duty: Modern Warfare 3, Battlefield 3 and FIFA 12, but consumers cut expenditure on other games that didn’t sell as well as expected, along with peripherals and hardware.

Can PS Vita save the Game Group?

GAME is being squeezed by online competitors and supermarkets who can offer top titles at more affordable prices. However, retail analysts note that next-generation console launches expected in 2013 will provide a much-needed future boost. All eyes will be on the highly anticipated PlayStation Vita, which launches on 22nd of February, and the Nintendo Wii U later in the year.

Although the future of other stores on the high street, such as HMV, also look very uncertain, I think that GAME and Gamestation will be fine for the immediate future. However, in order to survive they need to follow Clint Eastwood’s advice in the film Heartbreak Ridge, which is simply “Improvise, Adapt and Overcome” as the gaming industry starts to move into the digital distribution era.

If the future consists of no HMV, GAME or Gamestation you could be left with the unsavoury feeling of CEX and the infamous Grainger Games to choose from, so even critics such as myself, should be very careful what you wish for.

The current economic climate is starting to bite and these kind of stories become the norm as people look at ways of cutting the costs. This usually starts with a quick look on the internet rather than costly trip to yet another faceless shopping centre.

Although I will fight against ‘clone town’ Britain, where diversity remains on the endangered list, a ghost town Britain would be so much worse. There is a great risk that the humble high streets across the land have become outdated and neglected. We seldom take the time to think about the real social and economic worth to our communities that are disappearing before our eyes, in this time of constant change.

In my day we used to queue up at a shop at midnight to buy a game…

As for gamers, our world will continue to change too, along with how we purchase our games. Maybe one day, we will look back with great nostalgia of how we used to visit a game store full of like-minded souls, talking about games or even playing them inside the store, before a friendly face tells you about all the games that are due out later in the year. You may even reminisce about how they remembered you every time you visited and the lengthy discussions that ensued.

I hope this is not the case and experiences like these can be passed onto another generation of gamers, but there is a wind of change in the air. Tales such as these will be left for you to bore your children with instead, which in many ways is quite sad.

Who am I to criticise, though, I am more guilty than you all, as I post the cheapest online deals to buy games on a daily basis, but I hope you understand the sentiments behind this particular message and my final word on the matter is that I hope both GAME and Gamestation have a presence on our high streets for a few more years to come.

Ubisoft and the growing ‘online pass’ trend

Ubisoft have announced that they will be following fellow publishers EA, Codemasters, THQ, Sony and Warner Bros in a vain attempt to tap into the elusive second-hand sales market.

The Ubisoft online pass will be coming our way in the form of the Uplay Passport, which will be a one-time code that will come with new Ubisoft games. Second-hand buyers will be able to purchase codes for £7.99 or 800 Microsoft Points. The first game to require the new pass will be the upcoming Driver: San Francisco and it will go on to be included in other big titles from the publisher, in what is for some an unpopular but unsurprising move. As a business model it is very similar to the online pass offered by EA, but as more companies try to regain some income from second-hand sales, can Microsoft continue to charge for the Xbox Live service?

In the defence of the publishers, they are defending their business from High Street stores such as GAME, who are selling pre-owned games and the publisher receives no income from this. GAME in particular have pushed their luck further by instructing staff to buy products on offer at Tesco and then marking up in their own stores. It could be argued that the Publishers and the High Street are involved in a big fight and you, the gamer, are going to be the one that gets hit hardest.

Typically, you could buy a game on release day for £39.99, which includes your online pass. If, after two months and a few items of DLC purchased for around £8, you then decide to part with the game by selling it on an auction site or by trade-in on the high street, you will get a hugely deflated price due to the slowing demand of pre-owned games; all because of the added online pass required to play it online.

So I need a passport to play a game…

High Street stores already struggling to compete with cheaper online stores will slowly lose their more profitable business of selling pre-owned games at marked up prices, and will slowly disappear. Gamers will be out-of-pocket too as the publishers re-gain control.

Over time people will buy fewer games, meaning we will see less innovation and the norm will become the Call of Duty, Battlefield and FIFA cash cows with little else on offer. For those of you that think I am overacting, a quick look at this year’s game market is already showing how quickly games are losing their value.

I remember being at the Eurogamer Expo last October and there was a huge amount of hype for Brink. There was a queue of over an hour-long wait just to get your hands on this hugely anticipated title, and people were walking away very excited. Fast forward to its release in May and a string of poor reviews ensured that the price had fallen to £14.99 within two months. Homefront was another game heavily marketed for months, but is now under a tenner.

All is not lost though, we can fight back. After all, only a huge fan (or some would say ‘fool’) would spend £40 on a game on a second-hand game, when after only two months later, you could buy the game brand new, complete with online pass for between £14.99 and £17.99.

If this happens neither the publisher nor the high street come out of this well and the savvy gamer will be the champion of champions. I fear that even this victory will be short-lived as the next generation of consoles could surely be digital download only, which would allow them to sell games at inflated prices. A quick look at Microsoft’s Games on Demand takes the smile off your face when you see games such as Crackdown 2 can be purchased for £19.99 but can be found for only £5 at an online store.

Will the future see you paying big money for old games?

The biggest fear among gamers is that we are all being treated as mugs and are rapidly being fleeced. We are wise to the fact that despite paying £39.99 a year to Microsoft for Xbox Live, we then could pay £39.99 for a game that is half-completed because several hours of content is held back, just so it can be released as DLC for £9.99. To announce more charges for online passes and bonus material as well? It takes a very mild-mannered person to not get pissed off.

It appears we are caught in the middle of a war that we cannot win. This is a complex issue that is not going to go away, but who is to blame? Are you angry at the High Street stores for encroaching on the publisher’s income? Are the publishers getting greedy? Do you support the publisher’s move?

We would love to hear your thoughts on this hot potato so please post your comments!

GAME begins trial of errors with pre-owned pre-orders

Retailer GAME have started to offer online pre-orders on pre-owned games, in what appears to be a rather desperate move. It’s a move that is sure to anger both gaming publishers and developers in yet another short-sighted move from the struggling high street store.

The idea behind this unusual concept is that games are being offered from one week after their official release date and promised savings of up to £21 under the recommended retail price, but they seem oblivious to the fact the majority of savvy gamers do not spend over fifty pounds on a game in the first place.

The pre-owned market has never been popular in the gaming industry as the people involved with creating a game see nothing of the revenue, which gave birth to the inevitable online pass; a thorn in the side of many a gamer in the last 12 months.

The games currently being trialled on the new scheme are

• Virtua Tennis 4
• Dragon Age II
• Homefront
• Fight Night Champion
• WWE All-Stars
• Tiger Woods PGA Tour 12: The Masters
• Shift II Unleashed
• Virtua Tennis 4
• Crysis 2

The idea is that it will work the same as any other pre-order service, but a closer look at this offer reveals that the deal is not as good as it may appear. Let’s start by looking at the future release of Homefront,  available to pre-order brand new and delivered to your door on the day of release for £32.85 from Simply Games. However using the new offer from GAME you could wait for a week and have a pre-owned version for and pay an extra pound for the privilege at £33.99.

Homefront cheaper new than pre-owned at GAME

Gamers disappointed by HMV at Eurogamer Expo

Eurogamer Expo was a fantastic opportunity for retailer HMV as their store was in a prime position in the hall at Earls Court. However, despite having a chill out area with bean bags and a vast array of games to purchase, the area was somewhat underwhelmed.

Upon closer inspection it was clear the reason why the thousands of gamers under one roof were not walking around with carrier bags full of the latest games they had just played and loved. The reason for this was because HMV were selling the games at full retail price.

For instance, one stand contained hundreds of copies of the game Fifa 11 on its release day next to the multiple Fifa booths where people were queuing to play and could be described as a stroke of marketing genius, but when people saw that they were charging a whopping £39.99 a hasty retreat ensued.

GAME: A thrifty gamer’s view

We have already touched on how supermarkets selling games at less than RRP could have a huge impact on the games industry, and even though I’m known for my thrifty ways on Neil’s Deals, I will always champion the local independent games shop and everything it stands for. The retailer GAME does not fall into this category; it’s just another chain store on the UK high street that makes each and every other town you visit look identical.

If I were to drop you into any city in the UK, you will no doubt find a HMV, Game, Superdrug, Greggs and the list goes on, but the store GAME in particular gets under my skin for many different reasons. The latest, aggressive “Upselling” stance is a step too far for me.

 Very often I have found myself in GAME feeling like I was in a prison movie where the top dog signals with a simple nod of the head, to his henchman, to take out the prisoner. I swear to you all that I have seen this very same nod by a GAME manager given to a young sales person when a person of a certain age walks into the shop. You expect this when looking for sofas or double glazing but not when buying a game.