It’s sad but the writing has been on the wall ”for some time” - the rise of the Internet is no new thing, argued Gerhard. Business is still going on but ”in a different place” than shops.
UK retailer GAME has had a hard time but has managed to convince banks they’re still fit enough to continue, providing they work to sell off their overseas assets.
”I think, ten years out from now, we’ll be talking about retail nostalgically, as a museum piece,” said Mark Gerhard. ”I don’t think there’s much there that would give it a second life.” Retail margins ”erode the economics for developers being able to make money.” Second-hand sales are pure profit for retailers leaving studios out of pocket.
”It’s sad to see an institution decline, but the writing has been on the wall for some time - the internet didn’t happen yesterday. People are still playing games. They’re still doing business; they’re just doing it in a different place. If you don’t adapt you die. It’s as simple as that.”
Frontier Developments’ David Braben notes GAME and HMV are now experiencing what independent retailers went through when they rose up and generally crushed them.
”In a sense, they’re just getting a taste of that medicine,” Braben said. ”While I am tremendously sympathetic to all of those that work in the shops, the fundamental problem is that they’ve got to look at their business to reposition it anyway.”
GAME had lost its credit insurance which stopped it securing stock as publishers got nervous. EA made an announcement that their fiscal performance would be impacted if the retailer went under.
