With HMV entering administration we’re faced with the loss of the biggest high street entertainment retailer in the UK. If the administrators fail to save the company in any capacity then almost 4500 people lose their jobs, and we as consumers lose choice.
HMV has found itself in this situation because of the company’s failure to adapt quickly to an ever changing market. A market that is suffering from a drop in consumer spending with game market spending falling 17% while total entertainment sales fell 12%.
Of course the current financial climate has led to many people, including myself, cutting back on buying entertainment to instead concentrate on the essentials. However, if HMV shuts those numbers could look even worse next year due to a lack of outlets, and awareness of products.
[drop]Let’s first see how the potential loss of HMV affects the consumer. Right now I can count the number of well known entertainment retailers other than HMV on one hand, those being GAME, Blockbuster, Zavvi, Shopto and Amazon.Play is no longer on that list as it is moving away from the retail business.
What keeps prices low is competition and losing a major competitor may affect prices. With the loss of HMV consumers are down to two big entertainment retailers in town centres, though those who like buying music CDs will have to try and find the rare independent record stores.
Or switch completely to online shopping.
Online shopping is becoming a bigger presence, and many will simply jump to that. Digital downloads are also on the rise, and in 2012 they topped £1bn sales for the first time. However, when it comes to games digital downloads only aren’t always the sensible option. There are download caps to consider, slow internet speeds in some areas and the occasional ludicrous pricing (right now DmC is £49.99 on the PS Store). You also have to remember that some may not have internet access.
What about the games industry then? The industry spends a lot of money on advertising products but even then the advertising campaigns are almost always for the big blockbusters. Other titles may gain awareness just because a person picked up a case off the shelf and decided to give the game a go. I know I’ve done that with a few titles, and I’m sure others have too.
GAME may fill the gap in raising some awareness but losing HMV means losing a lot of shelf space. With a market that has shrunk, and less outlets for consumers to find products game developers and publishers may think twice about investing in riskier titles, instead going for the safe bets. Lots of games have released with little to no marketing (Singularity springs to mind), and sales really only made because people saw it on shelves and took a chance.
Even then that isn’t enough to recoup losses on some titles.
As members of the games media we can only do so much to bring you, our readers, information about new and interesting titles. Hundreds of titles will fall by the wayside simply because we don’t have the time nor resources to cover them all. If we can’t keep track of all these games then how is the regular consumer going find new titles without actively looking for them?
In my opinion if HMV closes its doors then the entertainment market as a whole is going to suffer. Maybe if worst comes to worst I’ll be wrong, which would be a good thing. But if I’m right then sales in the UK will fall again leading to less variety in gaming due to lost revenue.
We’re at a stage where it’s too early for a digital only market, too late for traditional high street retail practices, and a market with too few competitors.
cc_star
Administration won’t mean anything if a buyer can be found other than restructuring and closing poorly performing or expensive stores along with job losses.
If a buyer isn’t found then what will it mean for gamers?
Nothing! Their games strategy was a mess – always has been and always would be.
They perhaps sold some to customers who were in there for music or DVD/Blu-ray, but beyond that it was only an insignificant amount in the grand scheme of things.
As far as high street retail goes, whilst all of the companies that have closed or are troubled in recent years have websites and sell through them, they are extremely uncompetitive in comparison to shops which sell through eBay, Amazon et al.
They weren’t aggressive enough for fear of cannibalising their own business model, so someone else came along and cannibalised it for them.
This will happen on an ongoing basis to anyone & everyone that doesn’t constantly evolve their retail business.
LeftyFlip
Sniper: Ghost Warrior 2 isn’t out until March 15th. You know how I know that? Amazon told me.
The “High Street” has been going the way of the dodo for years, and in some cases – HMV most notably – I don’t think it’s necessarily a bad thing. They’re prices have always been to high and they’ve failed to build up a competitive web presence.
Times are a-changin’ – and until the ‘High Street” can provide a genuinely alternative experience to shopping online (i.e. independent stores, knowledgable staff, and quality services that aren’t available on the internets) this slide will continue.
LeftyFlip
“their”, not “they’re”…doh!
Aran Suddi
Well that’s the last time I trust VGreleases.com Will update.
bunimomike
Utterly spot on. HMV didn’t move with the times and they’ve been stung for it. Keep in mind that their gaming division (by calling it that, it sounds far more impressive than it is) might’ve actually been profitable but they’ve been forcing us over a barrel and buggering money out of us for years!
Online will continue to trump bricks & mortar on the High Street until they can come up with a viable alternative. Thankfully, town planners are finally coming around to entire areas which act, shopping-mall-like, so we want to spend an afternoon there. Not for products but for the entire experience (ie. cinema, food out, buy a game on the way home, etc). Online cannot compete with this and it’s the only way I see something resembling the High Street of old returning.
Consumerism isn’t going to die out. The biggest entertainment industry in the world isn’t going to die out. True, my heart goes out to those people losing their jobs, but evolution is part and parcel of progression and what doesn’t adapt to a new environment dies.
The Lone Steven
HMV failed to be competitive and have brought about their own demise but supermarkets are partly to blame because they tend to undercut everyone although it is debatable whether they could have sold games for £25 for the first two weeks of launch and still make a profit without risking the publisher telling them to feck off. Combine that with the increasing costs of having a phyiscal presence on the high street and it’s no wonder we are losing more companies each year. But HMV’s demise could help a lot of new indie companies to spring up as HMV did destroy a lot of them in the past thus they could be able to survive. Although this could mean that Game will abuse the fact that it’s the only gaming specalist with a large presence on the high street in the UK by putting it prices up and then proccedding to go tits up again.
If we keep losing high street companies, we will end up with nothing but Tescos,ASDAs,Morrisons,charity shops, overpriced coffee shops. :S
gazzagb
I can’t really remember the last time I bought a game off the highstreet. It might of been during GAME’s administration sale. But apart from that, I buy it either off the internet (amazon, shopto etc) or through Steam for digital downloads. I think pricing is the main factor, and retail stores simply can’t compete with online retailers.
rSp8
I can’t believe that isn’t possible for somebody to make a go of HMV. It’s just about the only place left on the high street to buy entertainment products. Better pricing and stop selling some of the crap that clogs up stores and should be left to gadget shops and concentrate on giving people a wide range of music and films. Oh, and the technology section was always great to go and actually check out what headphones, etc. actually looked like.
OnlineAssassin77
WERE ALL DOOMED,DOOMED I TELL YA…
doug
Went in to hmv today over Middlesbrough to see if there was any offers and to be honest the prices Were still shocking here’s an example: lord of the rings the first one £7 on DVD. I’ve seen it on blu ray in grainier games for a fiver brand new
Mike
It’s official:
Deloitte appointed administrators to HMV Group plc, HMV Music Ltd, HMV UK Ltd and Fopp Entertainments Ltd
Nick Edwards, Rob Harding and Neville Kahn of Deloitte, the business advisory firm, have today been appointed Joint Administrators to HMV’s UK retail business, the high street retailer of filmed entertainment, games, music and portable digital technology products.
HMV, which is headquartered in London, operates out of 223 stores in high streets and shopping centres across the UK, and has 4,123 employees.
Nick Edwards, Joint Administrator and restructuring services partner at Deloitte, commented: “HMV is an iconic retailer and continues to be a very popular brand, but as we have seen with many high street retailers, the market is changing rapidly and conditions are currently very tough.
“Following our appointment, we are working closely with management and staff to stabilise the business in order to continue trading whilst actively seeking a purchaser for the business and assets. We appreciate the cooperation and support from the staff, customers, suppliers and landlords at what is clearly a difficult time.”
Certain HMV Group plc subsidiaries including HMV Guernsey Ltd, HMV Hong Kong Ltd, HMV Ireland Ltd, HMV Singapore Ltd and 7Digital Group remain outside of an insolvency process.
———————
Interesting to see only the UK arm of the business is in administration – it seems the online portion is not which is a relief!