Retail Day
Retail Week, today
Game off?
No company polarises opinion here in the Retail Week office more than Game. Like the judges of the Retail Week Awards, who voted it Specialist Retailer of the Year, I tend to take the view that as games have become more popular with a wider audience, it has turned itself into a business which has made itself less reliant on Nintendo or Sony’s release schedules.
But like many others, Retail Week’s deputy editor George thinks it remains the ultimate cyclical stock, which has done well on the back of products like the Wii and the DS over the past few years but will slide when there’s less exciting stuff coming out. And he looks to have been proved right today with a pretty awful trading statement.
The update claims that the performance was expected, but while the comps are admittedly very tough, I never heard anyone mention a 16% slide in UK like-for-likes being part of the plan. The lack of any new console launches is bound to have hit sales performance (although has helped margin with software becoming a bigger part of the mix).
And while Game will have benefited from the collapse of Woolies and Zavvi, HMV is hot on its tail with a credible pre-owned offer and surplus space being given over to gaming areas. While Game’s Gamestation stores are heaven for geeks, its main chain stores are often fairly sterile affairs and don’t really convey the excitement of the product.
Game is a well managed company and has really made the most of the gaming boom. The test now will be how it responds to a more challenging market.
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