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'Supermarkets: What about everyone else's margin?'

'Supermarkets: What about everyone else's margin?'
But it happened last week, and has placed GAME Group on the same playing field as the UK’s army of indies, many of whom ditched official channels in favour of snapping up supplies from supermarkets long ago.

And if some of the comments on our site are to be believed, many of you have become such regular customers that you’re on first name terms with the store staff.

Now the UK’s biggest specialist has been at it - that’s 670 GAME and Gamestation stores, in case you were in any doubt of the scale of this activity.

There are two arguments here: Firstly, that cut-price hardware deals like these are a sign of a healthily competitive market; secondly, that the supermarkets have gone bonkers in the rush to rack up vital market share and footfall, with little regard for the overall state of the market.

Judging by the response over in the numerous price war threads on MCVUK.com, it seems you’re likely to be in the latter camp.

It’s a watershed moment, and a troubling state of affairs. But give GAME boss Lisa Morgan credit for being so honest.

It is all indicative of the games industry’s current standing in the entertainment world. You can keep your Sex and the City/Little Britain/Ultimate Force DVD boxsets (please, for God’s sake, keep ‘em) – games are the most sought-after entertainment this Christmas, and Sainsbury’s knows it.

Undoubtedly, there are more deals like this to come – Sainsbury’s, Asda and Tesco all suggest on this week’s cover that this is just the beginning for its price-led games promotions this year. Why? Market share and footfall, of course – but what about everyone else’s margins?

The key difference between GAME Group and the supermarkets’ approach is having vested interest in the trade. GAME has easily enough scale and buying power to run similarly eye-popping promotions – but it’d be shooting itself in the foot long-term.

While it doesn’t look likely at the moment, the supermarkets could simply have their wicked way with the games industry, erode everyone else’s margins and then bugger off and force prices through the floor in some other non-food market.

Calm heads and long-term thinking are needed right now to avoid leaving money on the table this Christmas. Whether we’ll see that over the next few months is a different matter entirely.

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