GAME Could Lose £2m In Lost Profit Over EA Issues

The negative news continues for GAME, with The Guardian today running a story suggesting the Group could lose around £2m over the most recent issues with Electronic Arts.

Shares are down to just 4.65p at the moment (down another 27p), with one analyst at Singer Capital Markets issuing a sell note on the business. Mark Photiades estimates that just by not stocking Mass Effect 3 GAME could lose a huge sum of money in profits.

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Photiades assumes that a AAA title like Mass Effect would shift nearly a million copies in the first few weeks in the UK, and with 20% share normally going to GAME (and with software margins at around 24%) it’s not hard to see how £6 million or so in missing revenues translates down to around £2 million in profits.

And that doesn’t take into account the fact that GAME are issuing £5 credit slips to those that pre-ordered, too, or the negative press.

“With the well documented issues that the business is currently facing customers may look to other channels and retailers to make pre-orders in the future to avoid a similar inconvenience,” says the analyst.

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21 Comments

  1. Slightly off topic but surely GAME haven’t been helping themselves. In both Crawley and Brighton (my 2 local shopping areas) there have been 2 large GAME shops in both towns for years, as well as a GameStation. Given rent and business rates etc, surely they could have closed one of these stores in each town – I realise they might have rental contracts and have to relocate and/or make staff redundant, but business is business and it doesn’t make sense to have 2 stores so close to each other, duplicating all the overheads – and this is just in the 2 towns closest to me.
    I really hope GAME ride the storm as I like to have a video game store on the rare occassions I venture to the highstreet, even if they are now mainly preowned games. Plus to avoid the negitive effect their absence will have on the industry.

    • In Stoke, in the Potteries Shopping Centre, there are 2 GAME shops about 20 feet from each other. Madness. Saying that though, both always seem to have plenty of people in them (just not that many people queing to buy things).

      • Sounds familiar – I just don’t see why! Its not like we wouldn’t walk across town to get to the only GAME store, but them being close together just makes it seem even more stupid!

      • There are two GAME stores in Sunderland, Newcastle Eldon Square and the Metro Centre in Gateshead too.

      • That’s crazy!!

      • There’s 3 in Newcastle. Don’t forget the one in Fenwicks lol

      • …and the one in Comet… altho I think Silverlink has a North Shields address…

    • My guess is long leases with hefty get out clauses going back to the Electronic Boutique days. A couple of years ago they’d have been generating enough cash not to need to worry about it. Only option now is either to close and continue to pay rent, or close and sub-let, or continue to use.

      If the Game Group has been set up cleverly following the acquisition of Gamestation, Game and Gamestation will be separate companies. Put the whole group into administration, liquidate Game, and sell Gamestation to GameStop or new investors to bring it out of administration. Game’s been tainted to much by this, and most gamers have fonder memories of Gamestation, which seems to be not getting the negative publicity. Retail Company I work for did this nearly 10 years ago, and we’re still around, albeit with no high street presence anymore, but making profits ever since. Prior to administration, we had shops with 99 year leases, as it made the rent nice and cheap.

      Easy to hypothesise about this; more difficult to put all those jobs at risk.

      • You’re probably right as I can’t think of any other logical solution.

        That sounds like a decent option. And as you say GameStation appear to avoided some bad press.

    • Manchester Arndale – 2 GAME stores and a GameStation

  2. do “gamers” shop at game ?.
    i don’t and from what ive read on this and various other sites it appears im not alone. they have lost the one group of customers that could have helped save them from the downward spiral they appear to be in.

    • Plenty shop at GameStation (which is the same group). Less at GAME, but GAME’s target audience is more the “average” consumer.

    • I shop at GAME (online), but usually only because they have exclusives on preorders or certain limited/special/collectors’ editions. Otherwise their prices only differ by a few quid online from what I’ve seen. Supermarkets only seem to have significantly lower margins. There is the odd deal like when Amazon did Uncharted: GA for £28 but that wasn’t available for long at that price.

    • In my formerly local Game and Gamestation (which were 15-20ft from each other) I always shopped at Game, even if they were more expensive because the service, while not great was infinitely better than that of Gamestation. The staff in Gamestation were among the worst staff I’ve ever dealt with. Pathetic.

    • I still do but have only been buying Games I’ve been wanting and PSN credit *shrugs*

      Yeah thats been lost it seems, my local Game store seems fine but the larger one in Belfast’s City centre would seem to have a negative atmosphere compared to the shopping centre store outside the high streets.

  3. I think we can officially start arranging the funeral & carving the tombstone for GAME. But dont put it past them to try and flog the second hand coffin back to you for more than the price of a new one.

  4. Just got my pre-order money back and my 5quid voucher, but that takes a day to activate. Better spend that voucher asap before theres nothing to use it on :s bad times…

  5. my voucher worked the same day all this news came out. Was gonna buy Brink: LE for £7.99 but were out of stock on anything new under a tenner – so I bought Brink 2nd Hand for 7.99, only paid 2.99. I got the Agents Of Change DLC ages ago when it was on the store for free for 2 weeks.

    • You just missed a few of us playing it this week but I know Forrest, DrNate and Rocket_345 still want to play….if you’re fancy playing with some others that is.

  6. I don’t know why they don’t just ditch the new game market and put everything into secondhand. They make more money out of the secondhand market anyway and from what I’ve read there’s so little profit from selling new (as so much of it goes to the publishers) it hardly seems worth it to me. I know a lot of publishers are trying to kill the secondhand market, but gamers will always want to trade in old games to offset the cost of new ones, so the market is there regardless and I don’t really see any other future for brick and mortar stores anyway, as they are always undercut by online shops.

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