GAME need £21 million to pay its rent

Beleaguered retailer needs £180 million in total to meet all its debts.

Another week, another snippet of news concerning GAME’s swan-dive towards oblivion, although there soon may not be much more to report. According to the UK Press Association GAME has a week to raise a whopping £180 million to meet all its debts owed to creditors, suppliers and banks or go into administration. This is not simply the worst-case scenario in a spectrum of horrible-to-middling ones. This is the end, my only friend, the end, to quote Jim Morrison, unless GAME finds someone willing to stump up the cash and save them – and 10,000 jobs – from annihilation. The costs GAME needs to meet are a £21 million rent bill and a £12 million wage bill at the end of the month, along with over £10 million in VAT and £40 million to suppliers.

GAME has been pulling out as many stops as it feasibly can to try and stave things off. Earlier last week the company reported a third party – speculated to be private investment firm OpCapita – have shown an interest in clearing these debts. Nothing is certain however and according to The Guardian GAME’s lenders have rejected a rescue plan proposed by OpCapita. GAME are this week seeking access to “alternative sources of funding” and has asked suppliers to be patient with them, although it would appear suppliers’ patience has completely run out. The chain’s failure to stock Mass Effect 3 and other titles has had a domino effect with GAME being unable to source new products from several other suppliers.

Rumours are still circulating that chains like Walmart or Gamestop might be looking to step in and buy GAME out. Meanwhile other retailers are allegedly making plans and putting money aside in readiness to snap up as many of GAME’s assets as they can, such as existing stock, property and IP like, should the worst happen and GAME is forced into administration.

So the moment we’ve all been expecting may soon be at hand. If GAME cannot meet these debts through additional investment or being bought outright this once-dominant leviathan of UK games retail will have no choice but to go under. I’ve expressed little sympathy for GAME as a corporate entity on this site in the past but only because I reserve it for the staff, who are the victims of clumsy and complacent management that has ultimately put their jobs at risk. We can only hope any potential buyer is able to save as many of the 10,000 jobs at GAME as humanly possible should a takeover occur.

For all its mismanagement and misfortune GAME still has value. The traditional brick and mortar model is not long for this world in the grand scheme of all things gaming but that’s not to say social hangouts for gamers can’t thrive. Venues like the Mana Bar in Australia for example, which also sells games alongside alcohol, prove the concept can work. There is also still a need for some sort of physical presence in towns and cities serving as gateways to gaming, at least until the industry as a whole can make the crossover to digital distribution in a way that doesn’t alienate casual buyers.

We can speculate all we like as to what might happen. We could see a Balkanisation of GAME with chains like Gamestop or even Grainger Games taking over different stores in different parts of the country. Maybe some financial knight in shining armour will swoop in at the last minute on a pegasus made of money and bail GAME out. Perhaps any bailout or financial aid will only delay the inevitable, meaning I’ll still be writing about the collective woes of GAME for many more months to come. I for one hope not: there’re only so many spins you can put on the same old story. We won’t know for certain until at least Monday next week.

In the meantime, as always my best wishes and sympathies go out to GAME’s employees.

Source: Press Association

Matt McDermott

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