His Master’s Void: HMV’s struggle is a warning about retail consolidation

The damage done by the potential evaporation of HMV on the High Street will hit closer to home in the music and film markets than it will for games.

Should the worst happen, the material impact for games could be shrugged off, albeit annoyingly, for many. But in DVD/Blu-ray and CD, HMV claims a quarter, if not a third, of big sales and new releases, whereas in games it isn’t close to claiming ten per cent.

Hopefully some or all of this century-old UK retailer will survive, meaning entertainment firms aren’t facing a worst case scenario.

Yet the closure of any route to market will remind everyone to reflect on the causes of HMV’s problems.

Watching the digital acolytes try and draw an explicit line between the explosion of downloads and implosion of retail has been darkly amusing in this instance.

It’s an endlessly futile, if not pointless and inaccurate, argument. Games have been a growth area for the shrewd. Amazon, Toys R Us, Shop Direct and ShopTo. Each of those examples (and there are others) has served various degrees of the market – from fair-weather shopper to committed gamer – that HMV served also, thus rendering moot any argument that says changes in how games are delivered were a primary cause of the retailer’s issues.

HMV’s problems began as its large scale collided with market changes, not disruption from the changes themselves. A lack of innovation may have driven up things like payroll and rent costs – but those same debts would have likewise slowed its attempts to respond.

I bet you that similar problems will come home to roost at other comparable retailers in the UK, too. It happened to Play.com last week. Blockbuster after that? What’s next – the games category at a supermarket?

I don’t know the actual answer, but I do know that good intentions plus hungry banks divided by large corporations is not exactly a winning formula.

In the end, the worst case scenario is really if everyone just watched on as HMV goes through its crisis and says: Well, they had it coming.” You need to learn from mistakes, or they will be repeated. Any constriction of the overall retail opportunity for any business in this country is damaging on many, many levels.

After all, who in their right mind wants to be solely reliant on just the App Store, Steam or Amazon for sales?

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