It was in February last year that GAME announced its bold plans to transform its business.
The new strategy featured in-store mobile technology, a focus on reward cards, click and collect, a revamped website and plans to triple its digital revenues by 2013. But most importantly, it saw GAME secure a £160m three and a half year banking facility.
A month later in March, GAME announced it would be running its own consumer show: GAMEfest.
Come April and the first cracks began to show, with the Group posting annual profits (for the year ending January 2011) of £28.5m, down from £88.6m the year before. But GAME was confident. “In the longer term, we are putting GAME in the right place to deliver the strongest returns as the industry continues to change and evolve,” said CEO Ian Shepherd.
But conditions got worse, and come June GAME admitted that the market ‘has been more challenging than anticipated’.
Between February 1st and June 11th 2011, GAME’s revenue was down 12.8 per cent. However, the retailer was optimistic following good sales of Rockstar’s new IP L.A. Noire.
Sadly, things didn’t get better, and in September GAME announced for the 26 weeks ending July 31st, 2011that sales were down 9.9 per cent and that losses had increased to £48m. But it was ok, because the next ten weeks – with releases such as Modern Warfare 3, FIFA 12, Forza 4, Arkham City, Skyward Sword, Battlefield 3 and more – would help it bounce back.
Except it didn’t. And come January, GAME announced that UK sales plunged 17.6 per cent and that it could face lender action.
Credit insurers soon pulled support, and the retailer struggled to bring in new games.
GAME’s banks threw the firm a lifeline in February with a new, reduced banking facility.
But the struggle was far from over. GAME had to get its suppliers on board and get better terms. It held a meeting with its suppliers at BAFTA to explain what was required in order to see the retailer survive.
Although early reports suggested the meeting was a success, GAME has failed to win over some big suppliers – namely EA, Nintendo, and most recently, Capcom. The firm has since missed out on major release Mass Effect 3 and Street Fighter X Tekken.
The situation has taken GAME to the brink of collapse. And this month, the firm is seeking a buyer and admits it may have to enter administration.
There are reportedly four interested parties in GAME Group: Wal-Mart, GameStop, Hilco and OpCapita.