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Winning the GAME

Winning the GAME
We’ve recently had a huge week for the industry with the release of Wii Fit and GTA IV. Has it been the biggest week in gaming history?
It’s certainly helped give us a huge spike in sales during what are normally the quieter summer months. I can’t say that it’s definitely a peak week for us but it will be one of the biggest weeks outside of Easter, Christmas and hardware launches. We obviously trade not just in the UK but in France, Spain, Scandinavia and Australia and everyone has reported an awesome week.

And this comes after some great financial results for GAME...
Yes, the year’s got off to a terrific start.

GAME revealed a 156 per cent rise in profits…
In terms of profitability we saw profits rose by 156 per cent to £75.5 million which was quite incredible, but we saw sales grow around 86 per cent and we passed the £1 billion mark and saw sales around £1.5bn for the group as a whole - a really really terrific year for us.

It has been quite transformational with not only the successful acquisition of Gamestation giving a huge contribution to the Group sales, but also the fact that we saw major improvements in continental Europe. We saw sales more than double in markets outside of the UK where they contributed about £13.2 million so it was a pleasing performance from the UK, enhanced by Gamestation, and also growth outside the UK too.

GAME revealed a commitment to spending £5 million on its online offering. How will you be spending it and how will it help you take on the likes of Amazon and Play?
The money will be used to further strengthen our multi-channel proposition in the UK, but it’s also to put investment outside the UK to bring the international territories up to speed, and to invest in Gamestation.

It is not purely about the core game branding in the United Kingdom – it is also about group investment in infrastructure, logistics and IT to strengthen the whole group’s ecommerce proposition.

There is no doubt that the online spend is a worthwhile investment for GAME. We saw our ecommerce turnover grow by a huge 147 per cent last year, giving us a rise in profits of around 60 per cent, so we are really pleased with the progress that we’ve been making online across the group.

Although you’ve compared us with Amazon and Play, we’re different in many respects because we are a multi- channel retailer. That means we can do things with our business like promote things in-store that leads customers to then go online for a variety of reasons, whether it is checking on their reward points, etc.

We also offer a click and collect service where customers can order their console online and then pick it up in-store. We are more focussed on strengthening our ecommerce offer to customers so that it mirrors the same values that we offer in our stores.

You recently specified the criteria that a company will need to fulfil to be taken over by GAME. Were you indicating there might be further acquisitions in the pipeline?
No, we weren’t hinting. We’re a public company so we have to be quite transparent when making acquisitions or even talking about opportunities.

We confidently do look at markets, whether visiting them and taking a look at the High Street and the opportunity, or whether it’s looking at markets on paper. That’s something that we will always do, as and when opportunities arrive. We are quick to respond to good opportunities though – take Gamestation as a prime example of that.
But no, we’ve got nothing to report at this moment in time.

We’ve seen GTA IV and Wii Fit launch outside the usual peak release time for games – what do you think of this new trend?
It’s certainly great news to a retailer to have such phenomenal products to launch outside of the peak-selling season. We do something like 40 per cent of our sales in the last ten weeks so we are hugely seasonally influenced.

To get products like this outside of Christmas gives you the opportunity not only to generate some sales outside of the fourth quarter, but also to do the launch justice when there are not so many products in such a short space of time. The stores looked great around the launches of both Wii Fit and Grand Theft Auto  IV and we would very much encourage the publishers to look at time lines outside the final quarter in which to showcase their titles.

And I think both of them have proven that when the product quality is there that consumers definitely have the demand, despite the fact that they are probably quite different sets of consumers.

What about the way video gaming is apparently appealing to a ever widening audience now?
We talked a lot about how we believe the product innovation that exists today is really helping to broaden the appeal of video gaming in society and it is really great to see it, especially when you’ve been in the industry for a long, long time. I feel very very positive about what we’re seeing right now.

So we’re going to have a good 12 months ahead?
We feel very confident for the industry and obviously our business within that. There are a lot of good titles to look forward to and the momentum for the hardware continues to be there.

Pali International analyst Nick Bubb told The Guardian that US retail giant GameStop will make a fresh bid on GAME soon – any comments to make on that?
We wouldn’t comment on rumour or speculation.

So, generally good times all round...?
The big thing for us is that it’s a record performance and what was really superb for the business is that it was not just driven through the core game business; Gamestation did a terrific job, the international business really flourished and we saw really excellent growth through ecommerce, so the whole business as a package performed extremely well and we look forward to the year ahead and further building on that in the GAME Group.

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