Failing European video games store GAME Group, which is roughly the equivalent of GameStop, today suspended itself from the stock exchange and announced it plans to enter administration. The chain, which has around 6,000 jobs in the UK alone, has struggled for several years but recently hit rock-bottom, with suppliers refusing to supply new releases. Now, it'll enter administration in the hope of someone salvaging this mess.
GAME's profits have spiraled downwards for several years, but it hung on. In February, though, GAME Group confirmed that it was facing a big loss for the past year, and the situation was looking dire. It reportedly owes more than £100 million (over $158m) to banks, suppliers, and other creditors. It's also said to have a £21m ($33m) quarterly rent payment due on Sunday, and £12m ($19m) due in wages soon.
Capcom, Activision, Electronic Arts, Microsoft and other key publishers stopped supplying GAME over the past month as it couldn't pay them. When a high street store can't stock the big titles like Mass Effect 3 at launch, especially when it was supposed to be the only place selling the Collector's Edition, the end can't be far away.
GAME is based in the UK, where it has around 600 GAME and Gamestation stores, but also has another 700-odd scattered across Europe and Australia. A lot of people will be out of work if it goes down, and it's the UK's only nationwide chain dedicated to video games.
GAME's lenders are said to have turned down a deal from equity firm OpCapita, which recently turned around failing UK electronics chain Comet and had been hoping to grab GAME.
However, unconfirmed reports suggest a brand new company would be formed with backing from its bank lenders. Supposedly, this would open on Monday, shutting down many GAME stores and largely killing the Gamestation brand.
"A GAME with 300+ stores is what we'll all get, which is basically where they should have been three years ago during the peak. There's no need for two, or even three, stores in the same town or city," an anonymous source reportedly close to the deal said. Of course, this is unconfirmed.
Whether GAME shuts down, staggers on, or is reborn, the best of luck to all those affected by this unpleasantness. For now, GAME and Gamestation stores are still open and trading, so you'd best get in there if you've got any gift cards saved.