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Why the decline of Game Group won't save gamers' money

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Quintuple-dipping and fragmented, often-dubious 'extras'...do we need a 'hard copy' of a game? And will it really save us any money?

Game Group declining from the British high street while Steam forges on...

After a week plagued by rumours of bankruptcy - as well as losing support from EA, Microsoft and Activision, and several big upcoming titles - GAME Group's shareholders are feeling the pain after. after stock prices fall to an all-time low. MCV reported on Monday that GAME Group's beleaguered stock has fallen to 0.5p per share – a staggering drop of 98.8% from ten years ago. GAME's sales have been dwindling rapidly since 2008, when console gaming was at its peak. Now, it's entirely likely that before the end of the year, both GAME and Gamestation will have disappeared from our high streets. But what does that mean for us, the consumers?

Well, at this point, it's still too early to tell. Rumours have been ricocheting around the internet that GAME's American counterpart, GameStop, is planning to buy out the company, leading to only a few noticeable cosmetic changes in-store. Others think that GAME Group will go into administration – this might allow GAME and Gamestation to continue to exist in their current form, although we'll likely see stores disappearing left right and centre.

But if GAME Group folds, that means that the two biggest games retailing chains in the country will simply vanish. And with an entertainment industry as large as gaming is nowadays, there has to be something to fill the commercial vacuum. Sales figures show that on-demand services like LoveFilm and digital distribution clients like Steam are on the rise – predominantly the reason why GAME Group are in their current predicament in the first place – not only because of greater convenience but also because of more competitive pricing.

Skyrim - available on the STEAM platform

And it's not hard to see why. Would you rather have to commute to your nearest town/city centre to pick up Skyrim on release at your closest game retailer for £40, or download it off Steam for £30? For the sake of argument, let's say that your commuting time to and from town is the same as your download time – even so, why bother when you can save 25% on the price and you can sit on your arse and watch reruns of Jeremy Kyle while you wait? That way you can even simulate the exposure to tracksuit-clad white trash that the outside world brings!

Of course, high street retailers have identified that there are advantages to buying hard-copy games – namely, additional content. In the last decade or so just about every A-list game that's came out has had its own accompanying “limited edition”. It was a good idea at first: offer added incentives like a making-of DVD or art book for the fans and collectors that want to fork out a little bit of extra cash. But it very quickly became abused - most notably during the Mass Effect 2 release, when different versions of the game came with completely different in-game items to unlock, and different retail stores offered completely different pre-order bonuses.

Dragon Age: Origins. Plenty of extra stuff to be had here...Not to mention giving away bonuses for players of Dragon Age: Origins in an attempt to boost sales of another EA title, and promotional codes given away with bottles of Dr Pepper which were available to all – as long as you lived in North America to be able to actually buy the promotional bottles in question. Unless you wanted to purchase multiple copies of the game and/or you had very generous friends dotted around the globe, there was literally no way to get all the content that was on offer.

But this begs the question: why would you want to? A majority of the promotional content available on release was nothing more than a minor selection of gadgets and armour to tinker with – certainly nothing that would significantly alter or enhance your gameplay experience. Yet if you were hell-bent on acquiring every scrap of Mass Effect 2 content, it would likely cost you upwards of £120. Of course, EA aren't the only ones guilty of trying to milk gamers for every penny they can get: Assassin's Creed: Revelations had no less than eight retail editions on release.Eight. And as you can see from the drop-down chart that Wikipedia so generously provides, not one of them offered the entire bundle of content that was on offer. I'm not even going to attempt to figure out how much it would hypothetically cost you to try and gather up every scrap of content for that. Suffice it to say, though, it's a lot. A helluva lot.

Indie RoyaleThen there's the flipside. Look at sites like Indie Royale and Humble Bundle. These are sites where developers of indie games throw themselves on the mercy and generosity of the gaming public, where 3-4 games are bundled together and sold off for whatever the customer wants to pay for them – literally. There's a minimum price that's set depending on how much other customers pay, but beyond that you can pay as much or as little as you like. The last three times I bought a bundle on Indie Royale, the minimum price at the time was around £3. I paid an even fiver each time. Why? Partly for the feeling of self-centred satisfaction in knowing that I paid more than I was technically able to get away with, yes. But also because, for beating the minimum price, buyers are rewarded with some bonus content that you would actually want – soundtracks, expansion packs, even whole new games at times.

These are promotional offers done right. There's no swindling, no crafty double-dealing, and they don't need to brazenly and shamelessly flaunt their wares everywhere to try and get people to buy – it's all done by newsletters and word of mouth. And it works: indie developers are making an absolute killing through bundle websites, because they're offering things that people want to buy, at a price where they don't feel like they're been swindled, and they're not obligated to pay out the nose for every minor piece of content on offer.

What does this have to do with GAME Group and high-street retailers? Everything. Consumers are becoming more savvy with their purchases. Gamers are starting to learn that if you want to buy a game, you don't go to GAME or Gamestation. You look on Play.com, or Steam, or Best Buy – or hell, even go to the supermarket. At times when games retailers were bumping up their prices to a ludicrous degree for the release of Modern Warfare 3, Sainsbury's were offering the game for less than £30. Of course there'll always be the market of people that don't know any better that high-street retailers can rip off – the middle-aged and elderly audience that don't play games, but want to buy their son or grandson the latest PlayTendoBox 360 game for Christmas.

But as games become more and more of a mainstream medium, that market is shrinking, and trying to consolidate your consumer base from a demographic that knows nothing about your product is a fool's errand. It would be like HMV stocking their entire music section with Justin Bieber CDs - “Because hey, that's what sells, right?” - in attempt to draw in customers who want to listen to some obscure little indie band. It simply wouldn't work; the product wouldn't sell to those demographics, and the customers will just take their money and go where they know they can get what they're after – either on the high street or online.

Steam's digital distribution channelThe same is happening with the games industry: while the high-street retailers are failing to rake in the money in the mainstream gaming market, the “underground” gaming industry that is mostly based on PC is booming. The Steam digital distribution service now makes more money per employee than Apple or Google, and developers Valve Corporation have made exponential profits through Steam for the last seven years. It's a medium where everyone is happy: the developers make a much more fair share of the royalties on Steam than from high-street retailers, customers get better prices and frequent sales as a result, and Valve employees swim in an Olympic-size pool full of 100-dollar bills.

With that in mind, the future of GAME Group looks bleak. Even if they are bought out by a big American retail franchise or go into administration, the climate of games commercialisation has shifted. People don't want to buy games on the high street any more, unless they're picking up a dusty old Nintendo 64 from an independent second-hand games shop for nostalgia's sake. The market is going through a renaissance in online retailers and digital distribution and, quite simply, traditional games retail chains are dying out. But will they be missed? Well, that all depends on how much you value your money.


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Comments 

 
#1 Rip off prices Kitsu 2012-03-16 22:31
I disagree with the fact that you say that the prices are a rip off. The price of a video game has FALLEN in price for years, there was a time when you would fork out £60 for a play station one game or 64 release, but even though the content of games have improved drastically the prices haven't. I think that its a good thing. Sure you can pick up stuff cheap at Tesco but only if you want generic FPS shooter XIII or Football new season 11000. And these supermarkets are selling at a loss as they know that they can make up the loss in over priced cheese or bread.

If the ONLY specialised retailers in the UK does go then people who want more obscure titles will be without a place to get them. Not everyone is a PC gamer and can just download titles and believe it or not there are still a whole lot of people who are still not online. That and the fact that the online tax loop that allows sites to sell without adding tax will be amended this year.

Another factor to consider is the pre-owned market, other than indie stores and places like CEX who rob you from the work go, there will be no where to trade in your used titles and get secondhand older releases with relative ease. I know that a lot of publishers hate pre-owned *cough EA cough* but if it were not for this cheaper way to get hold of content lot of people who were students or less well off would not of gotten into games and be able to buy titles and things now that they are grown up and working.


What really gets up my nose the most about this whole this is the callous and heartless way the media is handling this. Everywhere its all doom and gloom and yay Game are going down the evil oppressors! People rely on jobs that are generated by this company and there have been enough closures in the high street recently with out adding Game to the list. None of this witch hunting was practiced when HMV was in trouble, and they managed to get through albeit not unscathed. I really don't think that people understand just how much od a void Game and Gamestation exiting the stage will leave in the industry.
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#2 RE: Why the decline of Game Group won't save gamers' money zero 2012-03-16 23:24
Quoting Kitsu:
I disagree with the fact that you say that the prices are a rip off. The price of a video game has FALLEN in price for years, there was a time when you would fork out £60 for a play station one game or 64 release, but even though the content of games have improved drastically the prices haven't. I think that its a good thing. Sure you can pick up stuff cheap at Tesco but only if you want generic FPS shooter XIII or Football new season 11000. And these supermarkets are selling at a loss as they know that they can make up the loss in over priced cheese or bread.

If the ONLY specialised retailers in the UK does go then people who want more obscure titles will be without a place to get them. Not everyone is a PC gamer and can just download titles and believe it or not there are still a whole lot of people who are still not online. That and the fact that the online tax loop that allows sites to sell without adding tax will be amended this year.

Another factor to consider is the pre-owned market, other than indie stores and places like CEX who rob you from the work go, there will be no where to trade in your used titles and get secondhand older releases with relative ease. I know that a lot of publishers hate pre-owned *cough EA cough* but if it were not for this cheaper way to get hold of content lot of people who were students or less well off would not of gotten into games and be able to buy titles and things now that they are grown up and working.


What really gets up my nose the most about this whole this is the callous and heartless way the media is handling this. Everywhere its all doom and gloom and yay Game are going down the evil oppressors! People rely on jobs that are generated by this company and there have been enough closures in the high street recently with out adding Game to the list. None of this witch hunting was practiced when HMV was in trouble, and they managed to get through albeit not unscathed. I really don't think that people understand just how much od a void Game and Gamestation exiting the stage will leave in the industry.


I agree with the post above. People fail to see that preowned software and hardware generate revenue that is used to purchase new titles from publishers such as EA. The main reason why Game and Gamestation are now on the brink of extinction is because of the state of the economy. The recession has had an effect on the way people now spend their money. There are job cuts everywhere.
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#3 RE: Why the decline of Game Group won't save gamers' money Dwarph 2012-03-17 10:26
''People don't want to buy games on the high street any more''

that my friend is a matter of opinion - i really enjoy going into town and buying from gaemstation - predominantly because its one of the only shops i want a voucher for (bar hmv)
also the whole reason most people are sad is because most of GAME and gamestation had great employees and a great atmosphere - it wasnt just simply a shop it was aplace where people shared a common interest of games - instead of typing on a facebook page you could ask an instore employee or even another customer about which game was better or which game you should buy.
also i can get quite a few 3ds streetpass hits there, ;D
but yes don't slag them off as just a game store because they were a lot more than that.
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#4 I agree with the article actually JD 2012-03-18 02:34
The future doesn't look too good for Game or Gamestation at the moment. It is terrible for those employed by the company but I think we have to be realistic. Whats been said is simply the cold hard truth.

The article hits the nail on the head when it comes to digital distribution. I love the old big box PC games with the huge manuals but I now buy everything new on steam. Not only is it convenient and cheap but because game publishers now seem content to put games out in an empty DVD box there is no reason to buy the physical game. I would only order a game physically if the developer put out some big limited edition package that would look good on the shelf, but again this would not be found on the high street.

With rumours going around that the 720 (or whatever it ends up as) won't have an optical drive or play used games then there is no future for video game retail stores, simple as that. High capacity SD cards are expensive and I think most people would prefer cheaper digital over a more expensive little card. Uncharted on the PS Vita is currently sitting in my local Game for £45, while I picked up Uncharted 3 less than a month after release on Blu Ray disk for £25. The price will of course go down over time but it will always feel strange paying so much for something so small, especially for non videogamers buying gifts.

Also, if Microsoft put together a console distribution system that was half as good as steam I think most people would be happy to use that for most of their purchases. They could still mess it up, but if the system has no disk drive then we are stuck with that or the tiny expensive cards.

If Game does get bought out and saved I think they will find themselves in the same position 5 years from now.

Game and its like have also built up a lot of bad feeling from consumers, developers and publishers over preowned games. Consumers feel ripped off at the prices offered for the games they want to trade in and games companies hate being undercut without getting a penny of the preowned sale. Its not that they are evil corporations trying to screw the little guy, its simple business and would be the same in any industry. I'm not defending EA, but if the publisher/developer was given a fair cut then the situation would be different to what it is now and EA might be more willing to support Game.

In regards to old games being more expensive, they were, but don't forget that back then cartridges were more expensive to produce and peoples expectations were very different from today. They weren't constantly surrounded by digital media, and if they wanted to get it they knew nothing else but paying £60 for a snes game at a store. It was the Sony PS1 that established today's format and pricing with its cd drive, new games costing £35-£45 and budget games £15-£25. PS1games never cost £60, this was its main advantage over the N64. I just looked through some old magazines to be sure - most were released at £39.99. People just expect more content for their money today.

As the article says that era is now coming to an end.

We all wish the best for those employed in videogame retail regardless of how this all turns out.
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#5 RE: Why the decline of Game Group won't save gamers' money Stuart 2012-03-18 17:43
Quoting Dwarph:
"instead of typing on a facebook page you could ask an instore employee or even another customer about which game was better or which game you should buy."
Yeah no thanks. I know for a fact every answer is going to be either Call of Duty or Battlefield.
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#6 RE: Why the decline of Game Group won't save gamers' money Paul Tanner 2012-11-15 16:20
used to love going to game but there prices are always expensive so ive found better deals online and ill be buying games both online and instore as graingergames had black ops 2 etc for £30 which game charges £49.99
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