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Editor’s Letter: What would Game’s demise mean for HMV?

By | Published on Friday 23 March 2012

Andy Malt

This week videogames retailer Game filed to go into administration, not long after suspending the trading of its shares “pending clarification of the company’s financial position”. The speed with which the clarification came was some indication of the company’s financial position. A quick glance at Game’s share price since the beginning of last year is probably not much more than it took to decide to call in the administrators.

This is not, of course, a music business story. And not that long ago it would have received little more than a cursory glance from this side of the entertainment industry. But these days any entertainment retail brand disappearing from the high street is cause for concern for everyone involved in the sale of physical entertainment products. And in this case, video game retail might be about to go the way the record industry fears its own real world presence could go, reduced to a few stand alone independents and a shelf or two in the bigger supermarkets.

Of course for that to happen in music, only one retail chain would now need to collapse, HMV. There was a point last year when many thought it might beat Game in disappearing off the high street. It weathered that particular storm, though the water in which HMV sales is still choppy. Game’s demise, should it occur in the coming weeks, will help His Master’s Voice, making it more or less the last man standing in gaming as well as music. Perhaps recent moves at HMV to reduce shelf space for its flagging games departments will have to be reversed.

Given that DVD and then video game sales initially helped the traditional music sellers like HMV when CD sales first started to tumble a decade ago, it’s perhaps ironic that it’s likely to be what was originally a record shop chain that keeps DVDs and games available on the high street.

High street gaming revenues were booming when sales of physical music releases first started to fall, but the decline of high street games retail, although arriving later, has happened a lot quicker. That’s not really surprising, given that even mainstream gamers are more tech savvy than most casual music fans, so once digital distribution in gaming got off the ground, it was always going to make a bigger impact sooner. And the recent rise in tablets and smartphones has also played its part, mobile being the fastest growing platform for gaming.

Though, a faster move by consumers over to digital isn’t the only reason why Game looks likely to collapse while HMV has managed to hang on. The differing attitude of the two companies’ respective entertainment providers – ie the record labels v the games publishers – has been signifcant.

Game’s situation became all but fatal when it found itself with similar levels of debt to HMV. But while, when the latter was on the brink, the record companies and DVD distributors rallied around, and offered better deals and vocal support, desperate to ensure their one last home of the high street survived, the games publishers have been much less forthcoming, for both HMV and Game.

In fact, with Game the publishers did the opposite of rallying around. When things started to look bad, a number of big suppliers stopped distributing their games to the store, fearing their stock might get caught up in any liquidation. Losing access to a couple of big EA and Nintendo titles was what sent what was left of the company’s share price plummeting earlier this month. Some in the gaming sector are now fearful of what impact Game’s demise could have on their sales, though others believe their industry has moved beyond any dependence on the high street.

Of course Game may as yet be saved in one form or another by a buyer. But if not, its demise will help HMV and the record companies who have put much effort into keeping the record retailer in business. Though, let’s be honest, as when Zavvi and Woolworths went down, any post-Game boost will be temporary.

The record companies are probably to be congratulated for helping rather than hindering their last big retail friend in its moment of need, though perhaps they too should be thinking beyond the era of the high street. Either that, or be putting their heads together to imagine what a successful real world music store might look like once the CD has become a niche product. I’m still not convinced HMV’s grand gadget selling plan is the answer, and perhaps there are lessons to be learned from those indie retailers beating the gloom that is hanging over the high street that could be applied to a bigger retail chain.

Or, perhaps, just perhaps, the answer really is pies. Perhaps Greggs could put in a bid for both Game and HMV.

Andy Malt
Editor, CMU

This week’s podcast is the last for three whole weeks, so make the most of it. On the latest edition you’ll find Chris and I talking about Game’s demise, various developments in digital music (including rumours that HTC has bought MOG and Spotify’s new apps), Tulisa’s sex tape, and Peter Waterman’s musical inventions. Track it down later this weekend at

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