Popular UK retailer GAME is planning to shut down up to 40 stores throughout 2020 if a dispute with landlords cannot be settled. The possible closures also have to do with a major drop in physical sales, which declined by nearly 20% in the UK across all retailers. These closures will lead to many job losses, similar to what happened to retailer GameStop in the United States.
GAME is working closely with its landlords to achieve better rates as an attempt to make up for losses in revenue. This is an issue that retailers worldwide have faced as digital video game sales have slowly risen in popularity. (Editor’s Note: It can also be attributed to the ease of buying physical through online retailers like Amazon.) As of July 2019, digital games made up 53% of all software sales, surpassing the physical market. And with the release of the PS5 set for later this year, digital sales are expected to continue to increase.
The rise of subscription services like Xbox Game Pass, PlayStation Now, and publisher-specific platforms like EA Access and Ubisoft+, has also made acquiring games digitally easier than ever. The frequency of the PlayStation Store’s sales (like the recent holiday sale, featuring over 1,500 discounted games) makes the case for specialty physical game retailers even tougher.
A statement from GAME addresses the the possible store closures:
We are working closely with landlords throughout the UK to ensure that we do not have to vacate the 40 locations which could lead to a number of job losses. However, we are facing a challenging retail market and GAME with its extensive retail footprint, needs to restructure and landlords need to work with us in setting realistic, fair rents.
At this point, it’s unknown if the store’s landlords will accommodate and lower the rates, but it appears that GAME, much like GameStop in the US, is looking into restructuring regardless, due to the “challenging retail market.”
[Source: Games Industry]