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TIGA Comments on GAME’s Imminent Collapse

March 13, 2012 Written by Sebastian Moss

European and Australian retailer GAME is rumored to have less than two weeks to sort things out before going into administration, so what does this mean for the UK games industry? TIGA, the trade association representing the UK video games industry, has now shared their thoughts on the tumbling share price and likely death of the company.

TIGA said “that GAME’s business difficulties confirmed the dramatic shift in the games industry from retail to digital gaming and reinforced the case for independent developers and digital publishers to embrace network gaming,” with the CEO of TIGA, Dr Richard Wilson, continuing:

This is clearly a deeply worrying time for GAME’s 6,000 employees and we wish them the best of luck during this crisis. GAME’s difficulties are due to a combination of factors: the economic downturn which has hit the high street generally; intense competition from other physical and online retailers; the decision by big global publishers not to stock GAME with new releases; and the shift by consumers from purchasing boxed products to digital games. Retail sales of video games have declined for four consecutive years, as consumers change their spending habits.

The situation at GAME will reinforce the trend which has seen UK game developers and digital publishers move towards network gaming – mobile, massively multiplayer, social and online gaming.  TIGA’s research shows that 80 per cent of new development studios are working either exclusively or in part on network gaming. This move towards digital self-publishing enables developers to create original games, retain control of their IP and achieve greater financial stability.

Patrick O’Luanaigh, CEO of PlayStation Home publisher and developer nDreams Ltd and TIGA board member, said:

I wish GAME and their employees the best of luck in a very difficult time. Unfortunately, the rapid transition to digital means life is likely to be tough for all high-street game retailers with more and more money being spent on platforms such as Steam, Origin, the App Store, PSN, XBLA and Android market. Fortunately, the UK has an increasing number of exciting new small to medium sized digital publishers who are growing stronger all the time. TIGA are working hard to support this growth in a variety of ways, as well as talking to the Government about policies that can help these companies expand and become the large publishers of the future.

While TIGA’s statements suggest that the rise of digital is the main reason for GAME’s severe difficulties, it’s important to note that the boxed games industry is still a huge part of the overall industry, but GAME has just been unable to match the low prices of supermarkets and online retailers.