Report: Time Running out for GAME Even as Potential Buyers Show Interest

March 14, 2012 -

Time is running out for UK retailer GAME if you believe this story from MCV, but several companies have quietly approached the troubled retailer about an acquisition according to another MCV report. One of those potential suitors is rumored to be Walmart, which has about 9,000 retail stores nationwide. Why a general goods retailer would want to buy a specialty retailer like games is beyond me. GameStop is also supposedly in talks with GAME, as well as retail strategist Hilco and Comet owners OpCapita.

Other news related to GAME making the rounds today includes an announcement that investment firm Blueshore Global Equity has acquired an eight percent stake in the company. It was also revealed today that GAME will not be stocking Nintendo's latest first-party 3DS title Kid Icarus. Earlier in the week it was revealed that the retail chain would not be stocking three major titles: Resident Evil: Operation Raccoon City, Ninja Gaiden 3, and Warriors Orochi 3.

Staff at GAME’s Basingstoke headquarters believe the company will fall into administration on March 24th unless a buyer is found soon, according to MCV.

GAME is not commenting on any of the stories making the rounds today, saying only that the company does not comment on rumor or speculation. Thanks to beemoh for the tip.

Source: MCV


Comments

Re: Report: Time Running out for GAME Even as Potential ...

>Why a general goods retailer would want to buy a specialty retailer like games is beyond me.

I'm going to make three guesses:

1/ Real estate- Walmart own the UK supermarket chain ASDA- controlling the rent contracts (or even ownership deeds) for that many high street stores nationwide could do wonders for the convenience store arm of ASDA's business. (Evidently, Walmart have no idea how small branches of GAME are)

2/ Buying power- owning a large games chain would improve both Walmart and ASDA's overall buying power in the games market. Given that games are generally used by British supermarkets to generate footfall rather than be a product in their own right, being able to put the squeeze on publishers and distributors even more than they already are would make that bit of the business less unprofitable/more profitable, as well as more competitive with other supermarkets.

(It would also be a much cheaper and easier route into digital distribution of games than starting up on their own or attempting to buy Steam or something- much like when they bought that video streaming firm)

3/ It's a power play- GameStop have been linked with a buyout of GAME- even if Walmart have no real interest in acquiring GAME, being linked with doing so might force GameStop into making a silly move, and disrupting their business enough that it pushes them into a downward spiral- ultimately having a knock on effect on mall retail and puching people towards general retailers.

Thus concludes today's Nonsense Armchair Business Theatre. :D

/b

Re: Report: Time Running out for GAME Even as Potential ...

I really don't see an issue with any of those thoughts. All are plausible. However, if what you say is true (especially for #2) then Walmart could face anti-trust charges. That could hurt its prospects. 

I am not sure how much influence ASDA and GAME have on the gaming retail market in the UK, but here in the US if Walmart were to buy Gamestop, it would be a major anti-trust issue as both are dominant games retailers.

Re: Report: Time Running out for GAME Even as Potential ...

Actually, that's not as nonsense as you think.  All three options are plausible, and even possible.

 
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