It's a worrying time for the gaming industry when the UK's largest dedicated games retailer, The Game Group PLC, lands on hard times, requiring support from shareholders and lenders simply to avoid bankruptcy; support provided on the condition that the firm closes at least 60 of its stores in the UK by 2013, in an effort to operate its business "within lower limits".
The firm has already taken steps of announcing closure of 35 of its UK stores and has amalgamated the www.gameplay.co.uk website into www.gamestation.co.uk in an effort to reduce overheads and strengthen the brand. Likewise, the firm recently laid-off 46 employees at its Basingstoke central support centre.
These cuts may seem dramatic, however the group consists of 1,275 stores worldwide, having already sold off over 92 stores in the past two years. The firm's decline had recently been accelerated by its lack of capital, leading to issues in obtaining stock for many EA and Nintendo games, with it looking likely that GAME will not be able to obtain enough stock to fulfil all of the firm's pre-orders for the upcoming release of Mass Effect 3.
Does this spell bad news for the gaming industry? Is GAME perhaps a victim of increased growth in the on-line segment? Or has it toppled under its own weight and a tradition of inefficient operations? Let us know what you think.