HMV meet GAME, GAME meet HMV.

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This time last year, I was writing about the financial turmoil UK retailer GAME had found itself in.  A year on and GAME is still very much with us, but only by the skin of its teeth.  This year, the UK highstreet has been hit hard by not only an under performing Christmas period, but also a massive shift toward internet buying.  On Monday of this week, the largest of the UK ‘s music and entertainment retailers announced it was on the verge of administration.

For 92 years, HMV has been the UK’s biggest name in musical highstreet retail, and before this week had 239 stores across the country.  Very much a music store from its early days, it ventured into other avenues such as video and then DVD, and of course what we are interested in here, games.

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To many, the troubles HMV finds itself in came as no surprise.  Having spoken to staff at a store prior to Christmas 2011, I was made aware then that the company was in serious trouble and staff at that store feared closures would follow that Christmas.  The dwindling stock in stores around that time seemed to confirm this, but HMV fought on, help was found and they survived to see another Christmas period.  Consumers however, will feel little sympathy, for the staff yes, but the company itself, perhaps not.  Prices in stores have always veered toward the higher end of the scale and availability of stock has been an issue.  But one area of the company which has been handled well, is its gaming division.

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During the mid 00′s HMV actually declared that games in its stores were one of the areas which had seen growth, compared to the ailing CD and DVD markets.  Capitalizing on this growth, many stores dedicated more shop floor to games, and also incorporated other ideas which game retailers had under used.  Gaming booths were common place, large PS3 stations and in some stores such as Manchester, entire basement levels were transformed to hose masses of stock, as well as partitioning areas to be dedicated Multi player gaming zones called Gamerbase.  Its these sorts of ventures which UK retailers and the gaming industry has been crying out for.  HMV was also the place to be on release nights for big games.  Often treating the releases of COD, Halo or new consoles like film premieres, HMV has attracted crowds to these events.   The one area of the gaming division which did fall short however, was its actual prices.  Whilst HMV was one of the first non-dedicated gaming outlets to offer trade ins and pre-owned games, the prices offered and prices games were re-sold at lacked any kind of competitiveness.  New releases in the UK generally follow the rrp, there are those that will add on an extra fiver for big name titles, but in general new games release at £39.99.  Whilst this is true of HMV, all too often newer releases will still be cheaper elsewhere, and in particular, online.

HMV is primarily now an entertainment superstore, and its this expansion into different areas, which has possibly contributed to its downfall.  At its peak, HMV was a music retailer, selling all sorts of music for all kinds of tastes.  Moving into different areas of entertainment has meant its music departments hav been scaled down, less stock is available and what is there, isn’t as cheap as it is elsewhere.  Supermarkets are now offering the same kinds of music, DVD/Blu ray and gaming stock to shoppers and at far cheaper prices and also seem to be able to move with the times and trends.  An easy example of this would be the reduction in price of Hitman Absolution. Reduced by many online retailers to less than £18 almost immediately after Christmas, Tesco reduced their stock of the game to £20.  Not as cheap, but the extra £2 is for the extra convenience of purchasing there and then.  HMV has always struggled to be able to keep up with the ever decreasing (and occasional increase) in games values, often waiting for one of its once special Sales (and they were good sales at one point) to reduce, only to see their discounted games still being sold for far less at other retailers.

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For all of its criticisms, HMV is still a good store and its leaving of the UK high street will be a sorry sight.  There are still hopes though that a buyer will come to its rescue once again, but just like GAME last year, if it does survive, it will need a complete re-think over its long term direction.  There is still a market out there for physical purchases, but online buying and downloads are where all forms of entertainment seem to be heading, and its these two markets which it will either need to cater for collectively, or focus on.  Balancing the two though is proving to be very tricky, as found out by other similar high street stores such as Zavvi, Music Zone and Gamestation.

One glimmer of hope could be the news that of all the companies, GAME, is interested in buying around 45 – 50 HMV stores.  Selling these stores could help to keep HMV afloat, and will give UK gamers reason to smile, as since last January, high street gaming retail has been hit hard following on from GAME’s troubles.  It would be an interesting development for GAME, given the fact that many HMV stores around the UK have twice the shop floor space as your usual GAME store.  The possibilities of what GAME could use that extra space for are very interesting, especially if they were to incorporate some of the ideas from HMV’s gaming department.  As I pointed out last year, GAME is another company that needs to update its business plan, and this would either be a fantastic move or a final nail in its coffin.

So, from a gamers perspective, the fall of HMV has been a bit of a roller coaster.  It would be a shame to see another gaming outlet lost from the high street, but, should GAME buy outs actually happen it could actually be a case of 1 step back, 2 steps forward for UK gamers.

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