GAME may stop trading soon (Update)

By Gary Johnson - Mar 6, 2012

Video retailer GAME has been in the headlines a lot lately as its fortunes continue to slide in the tough financial conditions many are currently experiencing. Now today there are reports that the retailer may even stop trading soon as company directors consider the next move for the embattled chain.

Only recently we told you that the GAME stores would not be stocking the latest blockbuster games from EA, which included titles such as Mass Effect 3. Sources have told the Express that directors of the company are thinking about pulling “the plug”, after EA and Nintendo stopped supplying the chain.

The source is claiming that directors from the company are unsure if the retailer can continue “through the next trading season”, and then face insolvency. Discussions are rumored to be taking place with legal experts to see if it would be better to call it a day or build up even bigger losses.

Only recently the group secured a deal to relieve its debt conditions with its creditors let by the Royal Bank of Scotland. But it is believed the banks patience is now running thin, and the fact that stores may not have much to offer consumers in regards to the latest titles, could be the straw that broke the camel’s back.

But if RBS was to decide to close the operation it won’t come cheaply as the chain has 1,274 branches across Australia and Europe. It is thought creditors would only agree to a ‘pre-pack administration’, which allows a pre-arranged suitor to buy the business as a whole. There have been whispers recently that GameStop might be interested in snapping up the troubled chain.

The retailer has already started proceedings to close sixty stores, and may even cut back its overseas operations. Retailers in the UK have been struggling for the last few years with a number of household names falling by the wayside since 2008. Only recently we told you the gaming industry as a whole was feeling the affect of the credit crunch, with a number of big game titles not selling as well as expected.

Update: EA has responded to the issues surrounding some of its new releases and providing stock to the retailer. The company released a statement and said the current situation affecting GAME was “unfortunate”, but as ITProPortal are reporting the publisher also added that customers had plenty of other alternatives to get hold of the new releases. The company also didn’t see that there would be any delay in getting the games released to the market.

Do you think the GAME Group will have a future?

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Also See: Fire sale begins as GAME gets closer to administration