A report in yesterday’s edition of The Express has claimed that the directors of struggling retailer GAME are considering “pulling the plug” on the entire business.
This is because many at the highest levels of the chain now fear that “insolvency has become inevitable” as it continues to negotiate deals with major publishers on a title-by-title basis.
And should further big releases follow Mass Effect 3’s lead in skipping the retailer, lenders might lose patience completely.
“There is a real risk that Game’s directors will pull the plug because they can’t be sure that the company can survive through the next trading season, and then insolvency becomes inevitable,” a source ‘close to the situation’ is quoted as saying.
“They are in discussions with their legal advisers about whether to shut up shop rather than rack up more losses.
“The immediate response from RBS will be to push for more store closures, but the tipping point for the directors and the lending banks will come when the stores don’t have products to sell,” said an industry source.
“This could happen if more suppliers follow suit.”
With a proposed buyout at the hands of GameStop seemingly in the balance thanks to a disagreement about the purchase of GAME’s Australian stores, it is perfectly possible that a pre-pack administration deal with GameStop positioned as the buyer is in the works.
“Suppliers pulling their products is a stepping stone to administration, but the problem for RBS pulling the plug is that it will be an expensive and complex administration because GAME has 1,274 stores across Europe and Australia,” a further source added.
“Lending banks will only want to consider a pre-pack administration, where there is a pre-arranged buyer, but who would want to buy GAME?”
Advertisement
Add a new comment
You need to be logged in to post comments. If you do not have an account then please register.
Comments
9 comments
Have Game responded as yet, Ben?
Joseph Brown INDUSTRY
0 0Mar 5th 2012 at 12:08PM
Not yet, no
Ben Parfitt MCV STAFF
0 0Mar 5th 2012 at 12:13PM
Game with the right buyer can be saved, however it would involve a LOT of streamlining & would require an entire shift in ethos to distance themselves from their current form, they need to engage more with the gaming community. It's wouldn't be easy but i would also suggest that it might not be the most difficult job in the world, what they do have is a product which while it's in decline right now, i'm sure everyone's aware of the rumour & innuendo surrounding future hardware releases.
Allan Mounce ELITE GAMER
0 0Mar 5th 2012 at 3:35PM
I agree with Allan's comments. Game is not beyond saving if swift and decisive action is taken and i believe i am the man for the job!
No company can continue to trade whilst accumulating such large losses for any period of time.
What they need to engage with is the reality of profit and loss at each store.
Phil Robinson ELITE GAMER
0 0Mar 5th 2012 at 4:21PM
Still no response from Game to quash this article in yesterdays Express then? I guess there must be some truth to it.
Joseph Brown INDUSTRY
0 0Mar 5th 2012 at 4:51PM
I would imagine to comment on such rumour would be difficult on a legal basis, it's one thing to comment on not getting titles from X publisher, it's entirely different to confirm or deny decisions on the scale we're talking about.
Allan Mounce ELITE GAMER
0 0Mar 5th 2012 at 5:00PM
Only in very rare cases do companies comment on rumour or speculation.
Christopher Dring MCV STAFF
0 0Mar 5th 2012 at 5:05PM
That's a fair point, Chris.
Joseph Brown INDUSTRY
0 0Mar 5th 2012 at 7:54PM
The way GAME has gone over the past 10 years, it doesnt bother me, Game stores like Grainger are more friendly and more deals and it feels like an independant shop, Game feels like a supermarket
Sean Lyons INDUSTRY
0 0Mar 7th 2012 at 4:06PM