A national rollout for GAMEtronics and a new online marketplace called GAME Marketplace are two of the initiatives planned for GAME in the coming year.
In June 2013 we launched a trial of our ‘GAMEtronics’ concept, enabling customers to trade-in and purchase preowned smartphones, tablets and other technology products through a selected number of our UK stores,” the retailer’s annual report confirmed.
Following the successful trial we are now rolling out dedicated space into every store in the UK under the brand ‘GAMEtronics’. A similar service is also being rolled out in Spain.
Our store networks and expertise in the trade-in and re-sale model mean we are well positioned to offer and promote this new service to our customers and, in addition, the product guarantees we offer on preowned products (two years in the UK, one year in Spain) are valued by customers. We are planning to launch an online version of this service in 2015.”
GAME is also planning to launch GAME Marketplace in the current financial year. It describes it as a strategic initiative to open an online marketplace in the UK using GAME’s eCommerce and mCommerce platforms, enabling peer-to-peer selling between vendors and customers”.
Added the company: When launched, GAME Marketplace will enable customers to purchase tens of thousands of products directly from third-party sellers both in-store and through our UK website, opening up a new and extensive range of gaming and gaming-related products to our customers.”
Less specific but also on the cards is the integration of digital payment platform GAME Wallet into suppliers’ networks, games or websites”. The report also says that it hopes to integrate the service into third party games”.
Elsewhere in the document, GAME offers a prediction of how the console landscape will look by the end of December. By the end of 2013 GAME says there were 500k PS4 owners and 400k Xbox One owners in the UK. By the end of this year it expects that to have grown to 1.5m and 1.1m respectively.
Wii U stood at 200k last December, and GAME expects that to have doubled by the time we enter 2015.
The chain also expects digital software sales to achieved parity with physical sales by 2018, revealing that in 2013 35 per cent of digital console software was sold through retail and 65 per cent directly through console hardware.
Turning back to GAME specifically, also revealed is that the company is bettering its footing with suppliers.
We monitor working capital closely,” it added. We typically seek to purchase products from our suppliers on credit terms to manage our working capital position, and while we have benefited from only minimal credit insurance in the last two years, following the IPO we are starting to see the return of credit insurance which has helped improve our working capital position.”
In total the chain employs 3,099 men and 1,133 women – meaning three quarters of employees are male. On the board there are six men (David Hamid, Martyn Gibbs, Benedict Smith, John Jackson, Caspar Woolley and Franck Tuil) and one women (Lesley Watkins).
Also revealed is the fact that chief executive Martyn Gibbs earns a salary of 425k. For the year ended July 26th Gibbs was paid, with bonus, a total of 493k. GAME’s total wages and salary costs climbed from 55.9m last year to 63.8m while total employee costs climbed from 63.4m to 72m.
GAME’s loans currently total 1.6m. This time last year they stood at 119.5m. Total financial liabilities are down from 185.7m to 74.8m.
CEO Martyn Gibbs also outlined the conditions that led to the collapse of the old GAME, and all the reasons why he doesn’t believe it will happen again.
While I don’t want to dwell on the past, I think it is essential to understand what happened to the old business so that we can make sure the same mistakes are avoided and as a result look to the future with confidence,” he explained.
2009-2011 saw an unprecedented series of industry and economic challenges: the huge rise and subsequent rapid unwind of sales in Nintendo’s Wii console, a marked acceleration in the cannibalisation of handheld gaming device sales by smartphones and tablets, and the absence of any major new console releases after 2007. All this took place against the backdrop of a global economy undergoing the most significant consumer recession in a generation.
Each one of these factors had a significant impact – together they put overwhelming pressure on a business that had its own challenges, including a large and inflexible store estate, high fixed costs, working capital inefficiencies and some unsuccessful overseas acquisitions. This ultimately meant the business was simply unable to move at a fast enough pace to adjust to the significant headwinds it faced.
Today, the Group has been transformed, and though we do not expect such a ‘perfect storm’ of events to be repeated, with the restructuring completed, we are well placed to respond to future challenges we may be faced with.
On many levels the business that went into administration is unrecognisable from the one you see today. The business operates from a rationalised store estate and we have refocused the Group on our core markets of the UK and Spain where we are the clear market leader. We’ve streamlined the business, cut costs significantly and undertaken a series of initiatives to improve operating and financial performance.”