It's (not) in the GAME

As some of you are no doubt aware, an internal memo from GAME (transcribed below) was recently leaked which detailed the reasons as to why the beleaguered high street chain will not be stocking EA releases in March.

Dear all,
Last week we held an event for our partners in the industry and explained the challenges we are facing in the short term - and we asked for their support.
We asked them to trade with us using manageable credit terms, and for them to continue to do that whilst we work through the strategic review and refinancing of our business.
We gave the industry commitments - we committed to integrity and openness in our dealings, and working with everyone equally.
We committed to only stocking products on which we could get the right credit terms, regardless of the title or the supplier. We will not stock products if the terms are not right for our business - we will not sacrifice long-term credit requirements for short-term sales opportunities.
As a result of us taking this position - a position that we believe is critical to our long-term health as a business - we have taken the very difficult decision to not stock EA's March releases, including Mass Effect 3.
As a specialist retailer dedicated to games and gaming, it is never easy to make a decision not to stock a title, particularly one with such a strong fanbase. But it is imperative that we treat every supplier evenly, that we stick to our commitments, and that we don't sign up to payment terms that will hamper us further in the future.
It is even more critical that we manage this appropriately with our loyal customers. We know they will be disappointed regarding Mass Effect in particular and in recognition of this, we will be contacting our Mass Effect pre-order customers and as a gesture of goodwill we will be offering them £5 of reward card / elite points.
I know that many of you will have to manage customer and supplier feedback directly, and I would like to thank you in advance for your support and am happy to answer any questions you have directly - just grab me as I walk around.

While it's commendable that GAME will not back down over the issue and is trying to deal with all publishers/distributors on an even playing field, it strikes me as strange not to put off the decision so that they can stock two of the most hotly anticipated EA titles of the year, Mass Effect 3 and the SSX reboot. The timing really couldn't be any worse for GAME, as these two titles, ME3 in particular, would have made a decent profit for the group.

Perhaps the bigger concern for GAME going forward is that if this stand-off continues they may find themselves on the outside looking in when FIFA13 comes out later this year. As many readers are aware FIFA12 set the record for both the highest and quickest selling sports game of all time, so to remove yourself from the equation seems tantamount to corporate suicide to me.

GAME recently said that they would be willing to consider giving publishers a cut of their used game sales, perhaps they could bring this to the table in an attempt to get a more flexible arrangement with EA ratified? I certainly think this is a case of GAME needing EA rather than the other way round, especially with the increase in games sales on-line at places like Play.com and Amazon.

Either way, this situation needs to be sorted out, and fast. EA represents a large chunk of the gaming pie, and GAME can't afford to do without their games on their shelves.

UPDATE 

Mark Photiades, a market analyst with Singer Catalyst Markets has estimated the capital loss to GAME from not stocking Mas Effect 3 at around £2.5million. In a Post by Nick Fletcher on the Guardian website, Photiades is quoted as saying -

"Working on the assumption that a decent triple A title sells 0.8m-1m titles in the first few weeks of release in the UK and assuming Game has around 20% share, we calculate that by not stocking Mass Effect 3, Game is potentially missing out on around £6m-£7m of revenues in the UK given the title will retail for £39.99,"

 That is a massive loss for a company already forecasting losses of around £8million for this year alone. Interestingly he also states that profit margins on new titles stand at around 24%. Also of interest is the opinion of Nick Bubb in the same piece who doesn't seem to understand the market at all.

So, had you heard of this new so-called blockbuster game Mass Effect 3 that comes out next week? Well, nor had we, and despite all the tut-tutting about how ominous the EA supply problem is, we suspect that it is just a storm in a teacup in a seasonally quiet time of year, as the big game suppliers can't really afford to do without Game at Christmas, given its huge share of the market. We are more concerned about the lack of news on the overseas disposal front.

Idiot...

Why games can't vanish from the high street

On episode 24 of the Killer Keyboard podcast Nick and i talked about the financial difficulties that GAME currently find themselves in. The reports, which detail plans to close as many as 60 shop fronts by 2013, make for depressing reading for employees and gamers alike. 

Since May of 2007, when Gamestation was purchased by GAME for approximately £74 million, there has been no other dedicated games retailer in the UK, nowhere else where you can get the same dedicated advice and assistance. Shops such as HMV and WH Smith, along with Supermarket chains like Sainsbury's and Tesco all sell video games, but unlike GAME they don't have dedicated staff with knowledge specific to the field, and certainly don't have the floorspace to stock the same variety of software.

Without a dedicated Video Games retailer out there on the street we would see a massive reduction in the one thing that is the life blood of Video games. Choice.

If there was no GAME on the high street would we even see new and interesting games like Catherine or the niche Ace Combat series on the shelves? or would the big supermarkets and retailers stock the things they knew would sell? There would be a whole shelf full of CoD and FIFA, while lesser games would be buried on the bottom shelf, unseen and unloved.

Go into your local supermarket and you'll see exactly what I'm talking about. With little room to spare you'll see every PS3 or Xbox game they have to offer on a rack that measures, at best, 6ft x 10ft. You won't see Catherine, you won't see Ace Combat, but you'll see a shed load of games that the managers think will sell the best. You can't blame them for doing it, but it would kill smaller game developers if these were the only places you could buy your games.

While i applaud HMV's efforts in the expansion of their games business, both in range and the addition of a pre-owned section, their financial position is even worse than GAME's is purported to be. The only other retailer that could possibly do justice to games may be about to vanish down the plug hole.

You could, of course buy your games online through a website such as Play or Amazon, but some of my fondest memories of games growing up come from seeing a random game on the shelf and buying it on a whim. Loaded and its sequel Re-loaded were two games that i had for the original Playstation, but I only played them because i had seen the first game sitting on a shelf in GAME. If I'd seen it on a list of games on Amazon, i would very likely have skimmed straight past it. Would I have played the hilarious and completely addictive Football game " All-Star Soccer" if I hadn't have picked it up in GAME? probably not, since it was neither FIFA or ISS (Pro Evolution Soccer's predecessor) very few played it, but it had a charm that made me want to play it, and i never regretted buying it.

 

Sure, it wasn't "sexy football" but it was fun

Then of course there's downloadable titles. True, it looks as though the days of the physical game disc are numbered, certainly as the dominant delivery system, but it would be a shame for physical copies of games to disappear completely. Even if downloadable titles were cheaper, as they appear to be looking at Japan's Vita game sales on the PSN, a great number of gamers, myself among them, resist this trend and would always prefer to own the disc than have a downloadable version of the game. You don't get the same "just opened" smell from an online game manual...

No, if GAME were to cease to exist, gaming would be a worse experience for it. Limited Choice, reduced interaction with the product and the loss of a tradition are what we face if they can't turn it around. I just hope that they can.

Monday Round-up: Heavy Rain, Light Pockets.

I really enjoyed Heavy Rain, it had a lot to live up to after Quantic Dream's last effort, Farenheit, came from left field to become one of my favourite PS2 titles in the early 2000's. This is why it pains me to hear that they have estimated a loss of up to $13 Million due to second hand sales of the PS3 thriller.

According to Guillaume de Fondaumiere, the co-founder of the studio, two million units were sold first hand but more than three million unique players have been identified through the trophy system on Playstation Network. That represents a whopping One Million units in lost sales!

I won't pretend that i disagree with people buying used games, i do it myself and think it's a right of any individual to sell on their games/music/books etc once they're done with them. This is a capitalist economy after all, and nobody came here for a lecture on communism. de Fondaumiere was quoted saying that "I've always said that games are probably too expensive so there's probably a right level here to find, and we need to discuss this altogether and try to find a way to I would say reconcile consumer expectations, retail expectations, but also the expectations of the publisher and the developers to make this business a worthwhile business."

I sympathise with the guys at Quantic Dream though, because it must really hurt to put all that effort into a game only to find out that your sales have been dented by as much as 33% due to second hand sales in Game, Game Station, HMV and for any American readers out there, Gamestop.

Speaking of Gamestop, it turns out that they'll be releasing their own branded Android tablet next year. Plenty have wondered what will happen to Video games retailers as the market inexorably moves towards digital distribution as it's preferred method of delivery. It seems that Gamestop have decided that the old adage "if you can't beat them, join them" has some wisdom to it.

By all accounts this new tablet will support mobile apps, while the true goal is to create a piece of hardware that can support full retail releases. Gamestop President Tony Bartel has also claimed that Gamestop are working with developers to create titles especially for the Gamestop Tablet.

Deus Ex: Human Revolution has been slated for release on the Mac OS "this Winter 11/12, while details of system requirements and pricing are to follow later on this year we do know that Feral Interactive will be porting the game. The GM of Eidos Montreal, Stephane D'Astous, revealed "We are delighted to partner with Feral, a leading expert in development for the Mac platform, to bring the acclaimed Deus Ex: Human Revolution to Mac players."

Given some of the reviews of the game, already on PC and Console, you do have to wonder why they're bothering.


Finally today, here's the brand new UK top ten on all formats -

1 - Dead Island
2 - Warhammer 40K: Space Marine
3 - Driver: San Franciso
4 - Resistance 3
5 - Deus Ex: Human Revolution
6 - Zumba Fitness
7 - Rugby World Cup 2011
8 - Lego Pirates of the Caribbean
9 - Star Fox 64 3D
10 - Gran Turismo 5

Congratulations to Dead Island for shuffling to the top of the pile. Unsurprisingly Rugby World Cup 2011 has made the cut after the tournament proper kicked off at the weekend, while Lego Pirates and Zumba are still in the top ten! Also nice to see the revamped, re-skinned Star Fox 64 squeezed onto the list, after having played it at the IGN UK 100th podcast i think it deserved a place at the top.

Right, that'll do for Monday. Until next time friends...

A purchase that will live in inFAMY

It's just a quick one today, and the title practically says it all. After work on Thursday i decided to go into town and have a look around the shops. I hadn't intended on buying anything, with 4 days to go until payday i was feeling decidedly brassic anyway. HMV seems to be a regular haunt for me at the moment, so i started there looking through the DVD's and Albums on offer in their sale.

The problem with most of HMV's stock is that even at sale prices they are often more expensive than the same product on Play.com or Amazon. Having decided to leave HMV and go home i walked past Game, for some reason i was drawn in, probably just idle curiosity at what their prices were like at the moment.

Browsing the isles i picked up a couple of pre-owned Xbox 360 games that were good value for their age. World Championship Snooker: Real 2009 (I really enjoy a good snooker game) and 2K Sports The Bigs 2 were both £8. My next find was the most surprising of all. inFAMOUS is the critically acclaimed super hero sand box game where you choose the moral choices of the main character. Released May 29th last year it sold like hotcakes and was given a 9.2/10 rating by IGN's Greg Miller. This background information is important because i can't think of another game that sold so well and was released so little time ago being available for the price I'm about to drop on you.

£10 for a brand new, sealed box copy of inFAMOUS. Jealous? no need, the offer is still on at Game.

Long live great deals!

Robinho