GAME Australia looks like it is following its UK cousin to the noose. It confirmed this morning that it has entered administration, just two months after it assured the public everything was fine when GAME closed 277 of its 609 British stores.
We don’t know what’s going to happen to poor old GAME. Administrator PwC wants to ensure customers with continuing business, such as pre-orders and loyalty schemes, aren’t totally screwed; and most, if not all, stores could remain open. Of course, they could all close as well.
Nevertheless, it doesn't bode well for the bonafide games retailer. JB HiFi is arguably the industry leader in Australia and seems to set the standard with pricing. It always has the best prices on launch, before reverting close to RRP, and competitors have no choice but to match. JB is the reason the likes of Harvey Norman and EB Games try to lower their prices nowadays. Without JB, you wouldn’t be finding Diablo III for $68 at retail tomorrow.
But it isn’t a dedicated games retailer. JB has a massive share of the Australian games retail market, but survive with low margins on a large range of tech and entertainment products. GAME only sells video games.
The Queen, EB Games, meanwhile is continuing to thrive. It even bankrolls Australia’s largest gaming expo and makes cringe-worthy webvertisements that erupt into tweets of fury over trivial complaints. Nobody is going to stop EB Games, at least not in the short-term, but perhaps that comes down to sheer luck.
EB established itself as the Australian powerhouse long ago, and nobody else has come close to rivaling that territory. There’s at least room for one brinks and mortar games vendor while discs are still produced.
As a poor student, I would never shop there, knowing JB across the mall would save me considerable coin, but I still went in. EB Games stores are everywhere, and gamers who despise its outrageous pricing model still find themselves wandering in from time to time.
Nobody can compete with this professionalism.
But EB’s fairytale won’t last forever. At some point, boxed copies will become obsolete. It’s already begun on PC, and is only a matter of time before consoles leave physical media to the hipsters, especially if this NBN thing is actually completed.
Nintendo has already alluded to the option between physical and digital games on Wii U, and Microsoft has rather unsuccessfully tested the waters with the Xbox 360, but only because it never bothered to reduce the price of 5-year-old titles. If it put effort into competing with retailers, the Xbox 360 could have become a predominantly digital platform by now.
While digital distribution is a worry for the future, online stores are the concern for the now. Even when it purchases Australian stock, MyGames competes with JB, not EB Games nor GAME, and it too is a dedicated video games retailer. When it purchases imported UK stock -- the same thing with a different classification sticker -- it’s considerably cheaper than anything in-store.
That’s the real concern for the storefront retailer. Importing games might be confusing and scary for the average idiot who can’t fathom a currency convertor, but when local online stores do it for them, it becomes a no-brainer. Even clueless mothers are starting to feel comfortable purchasing online from within Australia when it comes with significant savings.
The uninformed parent is why EB is still dominate and why GAME has probably stuck around for so long. Regular gamers go to JB or head online, yet these retailers have survived this long, so it’s not a market to be taken light.
However, online has already started to pounce. With more parents and infrequent players heading to the internet, and even offshore, to purchase games, and with the impending takeover by digital distribution, it’s no wonder GAME is already struggling. This could spell the end of dedicated video game stores.
By Ben Salter - Bio