After the announcement this morning, share prices plunged by 77% – on top of the 95% they’ve already dropped over the past year – pushing prices to just 1.75p, which values the company at a very humble £6m.
This is partly because some of Game’s suppliers – among them Electronic Arts, the company behind Mass Effect 3; Capcom, which released Street Fighter X Tekken last week, and Nintendo, the publisher behind Mario Party 9 – have refused to let it stock their games on the grounds that it might not be able to pay for them. Coupled with increased competition from the likes of Amazon and Play.com, that’s made for a very unpleasant situation for the retailer.
As any gamer worth their salt knows, it’s important to have a plan of attack before you go into battle. Thus, Game launched a big sale offering stock at ‘alarmingly low prices’ today (although at the time of writing, its website seems to be down, which probably won’t help it to shift stock). If things go to plan, that should get it enough cash to keep it going for the next few days.
It’s also appointed Rothschild, the investment bank, to find it a buyer – although the chances of that happening before the rent deadline are fairly slim. Still, apparently US rival Gamestop is interested in Game’s Spanish business, so that’s good news. Its UK, French and Australian stores, on the other hand, will either go into administration or pre-pack administration, depending on whether a buyer can be found. Although buyers prepared to go into direct competition with the mighty Amazon may, unfortunately, be slow to come forward…