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‘Morrisons is starting a bloody price war’

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‘Morrisons is starting a bloody price war’

Guardian newspaper predicts GAME may follow £12-a-DS-game deal from supermarket

Morrisons’ eyebrow-raising deals on video games this week could force prices down at GAME and start a ‘bloody war’ according to the national press.

Games on offer at the supermarket include Mercenaries 2 on Xbox 360 for £25, Spore Creatures for just £12.99 and Tiger Woods PGA Tour ’09 All Play for £15.

Altium Securities' analyst David O'Brien told The Guardian:

"The opening salvo in what could turn out to be a very bloody war was fired yesterday by Morrisons. Game Group has a price promise and as a result will be forced to match the levels offered by the food retailer.

"We think it highly likely that other retailers will follow suit in the run-up to Christmas, resulting not only in Game Group being forced to price match but also to increase its promotional spend in the press and on TV.

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"Our expectation is that little help will come from hardware sales, as Microsoft has just reduced the entry price of the Xbox 360 to $199 (£115), with Sony likely to follow suit.

"We think the above combination is likely to result in a reining in of profit estimates closer to Christmas."

Game's share price has fallen over six per cent since Monday, down from 259.75 pence 243.50 pence.

Oh Joy!

posted by Sep 10, 2008 at 11:51 am
1

Does anyone actually want to make money in this industry?

Selling at below cost is not a business model its Commercial suicide.

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dont be silly

posted by lee johnson Sep 10, 2008 at 11:53 am
2
lee johnson

NO its not, its just trying to generate increased sale of other items, selling these games well under cost price is an excercise in increasing foot traffic !! and trying to gain new cusomters
i hope other shops do not follow this trend or things could colapse, with more business's going under

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supermarkets again !!

posted by paul anderson Sep 10, 2008 at 11:56 am
3
paul anderson

yeah why do supermarkets have to ruin a great specialist industry, if a lower retail price was agreed and less agressive discounting would be needed, there really is room for everyone to make money, a few deals hear and there is fine, but this will be damaging and make indies cancel their pre orders with csoft,gem etc, as they will just buy direct from supermarkets, ive sold out of mercenaries 2 and went to clear out morrisons today, and why not, but essentially this is not a good thing for business.

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Who's next?

posted by KB Sep 10, 2008 at 11:57 am
4
KB

The question of whether this starts a price war or not will be answered by whoever makes the next move. That might come from Game, but I think the more likely candidates are the other supermarkets.

Game may follow suit if they have to in order to stay competitive, but there's no value to them in selling games at (what must be) a loss since they don't sell groceries to make up the difference, and they certainly don't want to devalue the market.

The one thing this is, is good news for consumers - the supermarket price war on CDs certainly brought down the retail price of new releases across the board, so a similar thing for games would be nice for the punters; less so for retailers perhaps, since I can see their margins being squeezed the most.

Anyway, I certainly took advantage of the Morrisons offer on Monday, so long may this sort of thing continue!

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Re: Who's next?

posted by matt bancroft Sep 10, 2008 at 12:08 pm
5
matt bancroft

one thing is true, if they do this with fifa 09 and any more EA games i will cancel all my EA pre orders as they are over priced as it is, same for activison,if i can get games lower than suppliers i will do, already notices that i can get all Ubisoft games for £4 cheaper than Trilogy, so i will be using this new supplier and leaving all orders from trilogy as it gives me more room to lower my price to cusotmers.

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supermarkets are never satisfied

posted by greg yass Sep 10, 2008 at 12:18 pm
6
greg yass

this is typical, great for customers but problem is supermarkets are never happy, no matter how much they make for the stock holders, they always want more, the games industry will be driven into the ground until you can only buy from supermarkets they when they own the market then the price will go up !

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Re: supermarkets are never satisfied

posted by james Sep 10, 2008 at 12:42 pm
7
james

lee johnson - In today's society not all shoppers buy other items when they visit a store that offers an amazing item at a crazy price. Normally such an incentive would be to offer it in hope of the extra sales elsewhere in the store but picture this Mrs Shopper hits Morrisons for the £12 game then shuffles over to the 50p counter (another incentive offer) and buys several of the many items then leaves without visiting anywhere else in the store. Where is the profit in that shop.....no where

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Re: Re: supermarkets are never satisfied

posted by lee johnson Sep 10, 2008 at 12:52 pm
8
lee johnson

of course i realise this, but this is the theory behind discounts, a sensible shopper gets the deal and leaves, but in the environment of a super store they hope you will buy other items, my local morrisons told me this, she said morrisons have a large entertainment target each week and this deal is set up to help reach this target even if they sell more games at a loss, also its to attract new customers to use the deal and hope they will be buy other items, (where the profit is made)
Now im not suggesting it works, im just explaining what the marketing behind it is, im sure it doesnt work very well but there you go. im getting cheap games for my store cheaper than my official suppliers so i have to go where the deal is and at the same time, clear them out so no one else can make use of the deal , so now in my area i have stock and morrisons dont, deal done !

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Re: What do the Publishers think

posted by Indie Revolution Sep 10, 2008 at 1:32 pm
9
Indie Revolution

!!!!!!!!!!!!!!!! MCV this is for you !!!!!!!!!!!!!!!. when everyone complained about Indies and pre-owned the publishers were in MCV every week spouting about piracy etc. Please ask the Publishers what they think of Supermarkets DE-VALUING their products that they have been developing often for years only to find that it starts its retail life in the Bargain shelf of the supermarket. If I had been developing these games for years and spent Millions doing it I would want to feel proud of it and put it up there as a piece of work worthy of its status not dumped in a supermarket price war on the bargain shelf. GO ON LETS HEAR FROM THE PUBLISHERS !!!!!!!!!!!!!!!!!!!

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Re: Re: What do the Publishers think

posted by CostaConsole Sep 10, 2008 at 1:44 pm
10

Said it before when one of the creators was on here basically implying we should kiss his arse. if supermarkets kill the indie trade they will then **** the publishers big time with prices.

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Re: Re: What do the Publishers think

posted by jerry grice Sep 10, 2008 at 1:47 pm
11
jerry grice

they dont care, its like the R4 card still sellin well and now our ds sales have gone down hill, we have customers in store recommending R4 cards etc to other customers and telling them where to buy them from, no one cares, all you need is a firmware update, we have customers that sell copied wii games, 360 and ds, and give out regular lists to people and sell them once downloaded from torrent sites

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Re: Re: Re: What do the Publishers think

posted by Sep 10, 2008 at 2:02 pm
12

KB Yes the supermarkets did bring down the price of CDs in the market but the labels didn't budge their cost prices. Result? wafer thin margins, so thin its was almost impossible to survive for specialist music stores.

It only devalues the product in the eyes of the public.

This is very bad for all the industry

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Re: Re: Re: What do the Publishers think

posted by Rez Sep 10, 2008 at 2:06 pm
13
Rez

You all better suck it up, This has been happening in the industry for years by retailers from within the industry so why not should some of the giant uk non specialist's reatailers not follow suite and have a go. The public are ready for this in this tight credit crunch period. My advice is that you all better start stocking food. You've all brought in on yourselves. Rez.

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Re: Re: Re: Re: What do the Publishers think

posted by koti Sep 10, 2008 at 2:26 pm
14

WE'RE ALL DOOOOOOOOMED!

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Re: Re: Re: Re: Re: What do the Publishers think

posted by MrJolly Sep 10, 2008 at 2:52 pm
15

Take it those complaining will go shopping at their local indie grocers etc. rather than the big supermarket with the free parking, easy access and lower prices.
Go on run that past the missus!
MCV won't ask any tough questions it's basicaly a regurgitated press release that says "everythings great!"

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i actually do

posted by paul Sep 10, 2008 at 3:01 pm
16
paul

i actually do use my local green grocer and my butcher i hate supermarkets and this was before they started sellin games and under cutting me, i find it cheaper at my local shops and you get a more personal service and more value, plus if your regular you get a little more for your money,it takes longer to shop but i dont care

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Re: i actually do

posted by Joanna Dark Sep 10, 2008 at 9:15 pm
17
Joanna Dark

Gamestation and Game already closed our town's two local indies by temporarily having lower prices before raising them when they had both closed. Now the supermarkets get to play the same tactics with them. Big fish eats small fish.

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Re: Re: i actually do

posted by JD Sep 11, 2008 at 10:01 am
18
JD

A few of the comments at the top of this page from indie’s sound like gangsters! As a consumer I couldn’t care less that a shop chain has decided to sell games at a loss leader as that can only be good for us consumers. The fact that you openly boast about buying all stock as to kill the competition and to force consumers to buy from you, is sad! This was and is a marketing stunt that was to last only a week! So what’s the fuss! And I concur with the comment above ‘scumbags!’.

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Overall...

posted by Darren Sep 11, 2008 at 3:05 pm
19
Darren

Indies like myself can buy stock cheaper from numerous retailers than the flippin distributors as it is! These prices are soo far below trade it is insane. But they can cover the costs, and as a week long stunt I do not mind, as long as that is it.

I do not understand this article at all..."Game have a price match policy"...Game are the most expensive games retailer on the high street and internet, they don't match prices, they set their own. Why the heck would Game follow suit? They wouldn't and wont. Oh look a supermarket are having a sale....so?! Game can't follow suit to be blunt, they'd make loses on everything they sell where as Morrisons recover it elsewhere.

I know one distributor dropped Asda from their books because they devalued the games too much, perhaps all distributors should follow suit. Supermarkets don't need games on their shelves, so stop selling to them. Games retailers and online retailers have margins as low as I thought they could go...don't start letting supermarkets loss lead on games or it will be the end for indies.

Overall, good stunt, good press, good week long deal. Lets leave it at that Morrisons.

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I agree with Number 7

posted by Big M Sep 11, 2008 at 11:12 pm
20
Big M

I been to morrisons twice a day every day this week, looking for bargains, ive bought two ds games for my sister xmas present, one for me and smash bros, when i get there i walk straight to the game section look at the games and buy only games, except for today when i passed the fridge and seen muller rice/corners 54p each or 10 for £2 so i bought ten, so all in all ive only bought items on promotion

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