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COMMENT: Retail’s love triangle

COMMENT: Retail’s love triangle
On the verge of a sell-off for months, it was rumoured that Gamestation would be swept off its feet by US giant GameStop, only for GAME to come in with an offer it couldn’t refuse back in May.

Now, several months down the line, things aren’t so simple.
The Competition Commission’s investigation into the deal could have all kinds of consequences; the most sensational of all leading to GAME selling some or all of its Gamestation stores to what is potentially its biggest rival in GameStop.

This is the last thing executives at GAME would have wanted. Some observers saw the Gamestation deal as a way of blocking a GameStop invasion; and any store sell-off deal to the US giant would surely be agreed to through gritted GAME teeth.

Of course, it could all be a fuss over nothing. The Competition Commission has 32 weeks to deliver its verdict, and is currently inviting opinions and evidence from the third parties. Ultimately, the industry will decide whether the deal goes through.

As the high-level source on MCV’s cover states, publishers are less inclined to speak out against the buyout – but what about the rest of retail?

It appears to be a no-win situation. On the one hand, indies and small chains will be very much opposed to an already dominant GAME growing even stronger. But if they speak out and the authorities force a sell-off, the rest of games retail will be paving the way for a potentially more formidable opponent in GameStop.

As industry analyst Michael Pachter says, GameStop is a smooth operator; offering highly competitive deals on pre-owned games, new releases and hardware. Surely this would make GAME – and indeed the nation’s gamers – take notice.

That’s not to say GAME has been complacent nor milked its market-leading position. But a fresh, highly ambitious entrant to the trade will surely inspire an even more determined and aggressive mood at GAME HQ.

Hollyoaks might have human drama and tearful teenagers, but in games retail’s love triangle, there’s big money at stake. And like any good soap, the drama just keeps rumbling on.

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