By the time you read this, the UK video game market may have been transformed.
As The Grocer went to press, the position of Game Group, operator of 610 Game and Gamestation stores across the UK - and another 650-odd sites overseas - was looking precarious. Some major publishers were refusing to supply it and observers were asking whether the business had a future.
Whatever the coming weeks bring - there has been talk that US giant GameStop may bid for the business - supermarkets are in strong position to take a slice of the £935m UK sales Game Group achieved last year.
The mults are already benefiting. “We have seen a significant increase in our Mass Effect 3 pre-orders,” said Asda head of games Andrew Thompson.
Mass Effect 3 was the title that thrust Game’s latest woes in the spotlight. The business, which issued a string of profit warnings in 2011 and is set to end the financial year with an £18m loss, had just renegotiated terms with its lenders when news broke last Wednesday that a dispute with Electronic Arts (EA) over credit terms meant it wouldn’t be stocking the title.
Earlier in the month, EA CEO John Riccitiello had told investors: “We are concerned with the financial condition of one of our major European retail partners, which could lead to increased bad debt and lost sales.”
Since then, it has emerged that Game, which has seen its share price tumble from just over 60p a year ago to less than 5p [7 March], will not be carrying Nintendo’s Mario Party 9 or Capcom’s Streetfighter X Tekken either.
If Game can’t resolve its problems, it would be a major blow for the games industry, particularly smaller developers and publishers, said observers, not least because supermarkets are stocking fewer titles and concentrating on franchises. In 2011, games outside the top 20 titles accounted for 72% of spend in specialist shops but just 46% in the supermarkets [Kantar].
“It would be very bad news for smaller publishers who can’t get a facing in the supermarkets,” said one industry source.