Financial burden finally forces GAME Group to withdraw from Stock Echange
UK gaming retailer chain GAME has officially entered administration, although it will continue trading for the time being, according to MCV.
In a statement issued by GAME Group, a spokesperson said, “Further to this morning’s announcement of the suspension of trading in shares of GAME Group plc, the board has concluded that its discussions with all stakeholders and other parties have not made sufficient progress in the time available to offer a realistic prospect for a solvent solution for the business. The board has therefore today filed a notice of intention to appoint an administrator.
“In the short term the Board’s intention is that the business will continue to trade and discussions with lenders and third parties will continue under the protection of the interim moratorium.”
The news comes after GAME Group today decided to suspend the trading of its shares from the London Stock Exchange.
Press2Reset’s thoughts are with all staff who are employed by GAME Group.
Timeline: GAME’s financial struggle
GAME Group has officially announced that it is entering administration in an attempt to save some of its business assets. How did it get there? We take a look back at how GAME’s post-Christmas slump went from bad to worse.
GAME’s problems began when it was forced to deny rumors that it would be unable to stock any new releases. These turned out to be false, yet GAME did shed some light on its financial problems. It was in negotiations with its banks and it would have to hold talks with publishers to secure future releases.
While GAME successfully dispelled rumors about new game releases, its real financial troubles were beginning to take shape. GAME was given more time by its banks, but that still wouldn’t be enough.
GAME began to look at its assets and what it could sell to solve some of its problems. Since nearly half of GAME’s stores are abroad, it began looking to shift overseas business that wasn’t critical to its UK survival.
GAME Group’s real problems began on February 29 with the news that some major titles would not be available from the retailer. This story confirmed that the UK retailer was in hot water. While Mario Party 9 was a blow, not being able to stock EA’s Mass Effect 3, the conclusion to one of gaming’s most high-profile franchises, was a massive deal. It effectively denied them any chance to profit from the game’s success. GAME’s negotiations had clearly failed.
GAME Group was in trouble, yet it did not know how to move forward. An administration process for the company would be expensive, which prompted GAME Group’s bosses to consider simply killing it off if things did not get better.
Unfortunately, they didn’t. The next day Capcom announced it was also pulling its stock from GAME’s shelves. Like EA, Capcom was releasing very high-profile titles such as Street Fighter X Tekken.
Rumors were also circulating as to what would happen to GAME if it went under. US retailer GameStop was not publicly showing interest in GAME’s UK division, but was rumored to be considering purchasing its stores in Portugal and Spain.
GAME reportedly hired financial advisory group Rothschild to find it a buyer. At the same time, EA’s chief executive also stated that if GAME were to go under, other retailers would take its place.
On the same day though, Tecmo Koei pulled another high-profile title from GAME’s shelves. More and more publishers were pulling their stock from GAME, leaving the retailer to flounder with its problems. Earlier rumors surrounding GAME were coming true, with a vengeance.
There was finally a good news story for the beleaguered gaming retailer when OpCapita offered to pull it out of the fire. This was unfortunately accompanied by more bad news as both Microsoft and Activision pulled their titles.
Just as OpCapita looked to have saved the day, its offer was rejected by GAME’s banks. This was the final nail in the coffin for GAME.
GAME finally announced that it was entering administration.