U.K. Retailer GAME Goes into Administration, May Close 600 Stores, Fire Thousands

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Stefan Wermuth / Reuters

A sign outside a Game store is seen in central London March 26, 2012.

That circling-the-drain sound you’re hearing is the U.K.’s largest games retailer, GAME, officially going into administration, as the Guardian reports the company could close up to 600 stores — half its U.K. presence — and lay off thousands of employees.

In fact it sounds like hundreds of stores are already closed: Metro reports 277 have shuttered so far today, with the company suspending refunds and exchanges. Metro adds that it’s heard Gamestation-branded stores (one of GAME’s subsidiaries) are in greatest danger of being shuttered immediately.

Visit GAME’s official website and you’ll find it “down for maintenance” with a message explaining the company’s gone into administration, who’s been appointed to handle the process and a disclaimer that the company is “currently reviewing and processing orders placed on this website.”

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Shocking as the news may seem with the abrupt store closures and alleged layoffs, it’s no surprise: GAME admitted late last week that it was headed into administration after it failed to reach an agreement with lenders. The company’s been struggling for some time, recently failing to secure distribution rights for A-list games like Mass Effect 3 and Street Fighter X Tekken, a failure that no doubt contributed to its financial tailspin.

The question most are going to ask, of course, is do we really care about retail gaming’s demise in a world where everything’s digital and accessing it has shifted to e-tail (think Amazon) and direct game downloads. We can say with almost scientific certainty that buying games at retail is in its twilight days. The argument that retail is a place to “try before you by,” for instance, is simply antiquated: Most games today offer downloadable demo versions, and most retailers I’m aware of have at best two or three games available in store tryout kiosks. The fact is, you’ll generally know heaps more about a game if you’re engaging with it directly, online, than if you waste time getting in your car and driving to the local mall.

The real tragedy, of course, is the thousands of jobs on the chopping block (though beware stories suggesting GAME’s demise is a consequence of economic malaise — not with game sales at record levels in recent years, and one of the few consistently bright lights during the global recession’s worst months).

I remember when the U.S. company dubbed Neostar (Babbages, Software Etc.) went belly up back in 1996. I was managing one of the company’s stores, a Software Etc., at the time. Things went from bleak to bleaker and finally to Chapter 7 (full liquidation) in a matter of months. But where the timing was right over a decade ago for a company like GameStop to emerge from Neostar’s ashes and go on to become the largest standalone games retailer in U.S. history, it’s hard to imagine GAME surviving this, and certainly not as a major retail force in terms of where consumers buy new releases going forward.

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