GAME went into administration today, with store closures and thousands of jobs under threat. It is thought that around 300 GAME & Gamestation stores will cease trading immediately.
This is a very sad day for the GAME group, but it's also a sad day for the High Street as a whole. With the surge in Internet sales of games and console there have been fewer customers walking into shops and buying hardware and software.
New business and revenue models
With the emergence of Apple's App store and mini-games as a whole, Nintendo, Sony and Microsoft are struggling to convince people to part with £20 to £40 for a single game. When mini-games on an iPhone can be had for pennies and in some cases for nothing, the £40 game, whether on a console or a handheld is looking like a very hard thing to sell.
Business models and revenue streams are fast changing in the gaming world. Instead of a single one of payment for a software title, developers are pushing in game content, premium accounts and content.
World of Tanks
World of Tanks is a prime example of this new revenue model. WOT is a massive online success, boasting almost 2 million players across the globe. Gamers can download the game for free and have unlimited time to play. It's no wonder then that the popularity of this game has 'word of mouth' to thanks for that.
To earn more XP and gain faster access to higher tier tanks, WOT players can sign up for a premium account costing a few pounds a month. They can also buy gold to purchase premium tanks that cannot be researched in the normal way. They game goes as far as allowing players to buy premium tank shells with higher damage and armour piercing capabilities to give them an edge.
When a developer decides to take their game online entirely, this is great for gamers, but there is little place for High Street retailers such as GAME. The High Street has made some efforts in getting invloved, mainly by selling game specific gift cards with points you can spend in game, but the lion's share of in game revenue is always going to go to the developers.
The future of GAME group
The future of the GAME group is uncertain, but with a turnover of around £1.6bn, rather than just vanish, they should find a buyer that will keep them going in some shape of form. As to who that will be, we don't know, Gamestop maybe?