Friday 23 March 2012, 18:48 | By

Editor’s Letter: What would Game’s demise mean for HMV?

Archive Columns Editor's Letter

Andy Malt

This week videogames retailer Game filed to go into administration, not long after suspending the trading of its shares “pending clarification of the company’s financial position”. The speed with which the clarification came was some indication of the company’s financial position. A quick glance at Game’s share price since the beginning of last year is probably not much more than it took to decide to call in the administrators.

This is not, of course, a music business story. And not that long ago it would have received little more than a cursory glance from this side of the entertainment industry. But these days any entertainment retail brand disappearing from the high street is cause for concern for everyone involved in the sale of physical entertainment products. And in this case, video game retail might be about to go the way the record industry fears its own real world presence could go, reduced to a few stand alone independents and a shelf or two in the bigger supermarkets.

Of course for that to happen in music, only one retail chain would now need to collapse, HMV. There was a point last year when many thought it might beat Game in disappearing off the high street. It weathered that particular storm, though the water in which HMV sales is still choppy. Game’s demise, should it occur in the coming weeks, will help His Master’s Voice, making it more or less the last man standing in gaming as well as music. Perhaps recent moves at HMV to reduce shelf space for its flagging games departments will have to be reversed.

Given that DVD and then video game sales initially helped the traditional music sellers like HMV when CD sales first started to tumble a decade ago, it’s perhaps ironic that it’s likely to be what was originally a record shop chain that keeps DVDs and games available on the high street.

High street gaming revenues were booming when sales of physical music releases first started to fall, but the decline of high street games retail, although arriving later, has happened a lot quicker. That’s not really surprising, given that even mainstream gamers are more tech savvy than most casual music fans, so once digital distribution in gaming got off the ground, it was always going to make a bigger impact sooner. And the recent rise in tablets and smartphones has also played its part, mobile being the fastest growing platform for gaming.

Though, a faster move by consumers over to digital isn’t the only reason why Game looks likely to collapse while HMV has managed to hang on. The differing attitude of the two companies’ respective entertainment providers – ie the record labels v the games publishers – has been signifcant.

Game’s situation became all but fatal when it found itself with similar levels of debt to HMV. But while, when the latter was on the brink, the record companies and DVD distributors rallied around, and offered better deals and vocal support, desperate to ensure their one last home of the high street survived, the games publishers have been much less forthcoming, for both HMV and Game.

In fact, with Game the publishers did the opposite of rallying around. When things started to look bad, a number of big suppliers stopped distributing their games to the store, fearing their stock might get caught up in any liquidation. Losing access to a couple of big EA and Nintendo titles was what sent what was left of the company’s share price plummeting earlier this month. Some in the gaming sector are now fearful of what impact Game’s demise could have on their sales, though others believe their industry has moved beyond any dependence on the high street.

Of course Game may as yet be saved in one form or another by a buyer. But if not, its demise will help HMV and the record companies who have put much effort into keeping the record retailer in business. Though, let’s be honest, as when Zavvi and Woolworths went down, any post-Game boost will be temporary.

The record companies are probably to be congratulated for helping rather than hindering their last big retail friend in its moment of need, though perhaps they too should be thinking beyond the era of the high street. Either that, or be putting their heads together to imagine what a successful real world music store might look like once the CD has become a niche product. I’m still not convinced HMV’s grand gadget selling plan is the answer, and perhaps there are lessons to be learned from those indie retailers beating the gloom that is hanging over the high street that could be applied to a bigger retail chain.

Or, perhaps, just perhaps, the answer really is pies. Perhaps Greggs could put in a bid for both Game and HMV.

Andy Malt
Editor, CMU

PODCAST
This week’s podcast is the last for three whole weeks, so make the most of it. On the latest edition you’ll find Chris and I talking about Game’s demise, various developments in digital music (including rumours that HTC has bought MOG and Spotify’s new apps), Tulisa’s sex tape, and Peter Waterman’s musical inventions. Track it down later this weekend at theCMUwebsite.com/podcast

ALSO IN THE NEWS
The BPI confirmed this week that 2011 was a very good year for UK artists in the US, with Brits accounting for 11.7% of the Stateside market, just as One Direction became the first British group ever to go straight to number one in the Billboard chart with their debut album. So that’s something to celebrate, isn’t it?

In return, the US gave us another secondary ticketing website to play with. Launching just in time to get in on all the public anger about such things, stemming from Channel 4’s recent ‘Dispatches’ documentary, the eBay-owned StubHub went live in the UK late last week. The company was keen to stress that it isn’t one of those bad secondary ticketing sites people are talking about, claiming to be “a very different proposition” to Viagogo, Seatwave et al.

Following her death last month, it was confirmed this week that Whitney Houston’s untimely demise was caused by drowning due to the effects of cocaine use and heart disease, which, while not entirely surprising, is sad nonetheless.

On Wednesday the government’s copyright consultation, which was launched after the publication of the Hargreaves Review last year, closed. The government claims that proposed changes to copyright law will boost the British economy to the tune of £7.9 billion – a figure which UK Music chief Jo Dipple said there was “scant evidence for and MP Pete Wishart called “bonkers”.

The European Commission’s investigation into Universal’s bid to buy EMI’s record labels was due to enter phase two today. In anticipation of all that, there was talk this week that some in the EC had privately expressed “serious doubts” about Universal’s bid, which pleased those who want to see the whole thing blocked. EMI, meanwhile, was busy suing Cash Money Records over unpaid royalties. Cash Money, for the record, is affiliated to Universal. Awkward.

Record Store Day 2012 was officially launched on Monday evening, with a party in a basement which saw PiL perform live and Orbital DJ. Over 300 exclusive releases to be unleashed for the celebration of independent records shops on 21 Apr were announced, including a set of seven-inches bringing bands and visual artists together, a new Flaming Lips album featuring collaborations with the likes of Bon Iver and Ke$ha, and the re-issue of Bloc Party’s debut single.

Over in MegaUpload land, Kim ‘Dotcom’ Schmitz was awarded a monthly allowance of about £30,000, which he’ll have to scrape by on for the time being, poor lamb. Although it’s possible he’ll get back all the assets that were seized from him when he was arrested earlier this year, due to the New Zealand police applying for the wrong sort of warrant before they swooped. In other dodgy download site news, it was announced that the original funder of The Pirate Bay, Carl Lundstrom, will serve his four month prison sentence for his involvement in it under house arrest.

By far the biggest bringer of traffic to theCMUwebsite.com this week were Google searches for a video of ex N Dubber and now ‘X-Factor’ judge Tulisa Contostavlos performing a lewd act. Every single one of them was no doubt disappointed to find that we weren’t hosting the sex tape, but hopefully they left amused at Dappy’s claims that he had positively identified his other bandmate Fazer’s penis in the video, and therefore could authenticate the video.

It turned out that Dappy was right to say that the tape was genuine, though he was incorrect about the owner of the penis. Clearly his memory for such things is not as good as he thought. Despite initial claims by her lawyers that the footage was fake, Tulisa made a brave statement on Wednesday confirming that it was her who had been caught on film and expressing anger at another former boyfriend for selling it.

FEATURES AND NEW MUSIC
We released the latest in our series of music industry tips this week, this time focusing on how to write the perfect press release. As well as that, we had an interview and video exclusive from Ladyhawke, our 100th playlist, which rounded up ten of our favourite contributions to the series so far, and in his column Eddy Temple-Morris listed twelve of his favourite new artists. Meanwhile, there was the usual round up of festival line-up announcements, and in the Beef Of The Week column Noel Gallagher was attacking cows.

This week’s CMU Approved column featured new music from Becoming Real, CSLSX, Pariis Opera House, and Ex Cops, all of whom are brilliant. And elsewhere on the site we had plenty of other treats, including Englebert Humperdinck’s Eurovision entry (not enough key changes seems to be the consensus), a preview of R Kelly’s next series of ‘Trapped In The Closet’, David Byrne’s sound montage of London, and MJ Hibbett’s new podcast version of his Edinburgh show ‘Moon Horse Vs The Mars Men From Jupiter’.

But that’s not it, there’s more. There were previews of songs form Madonna‘s ‘MDNA’ album, a remix of M83 by Mylo (Mylo!), full album streams from The Mars Volta and THEEsatisfaction, and other new tracks from Neon Indian, Pixie Geldof’s band Violet, Dems and Strangers. Plus Nicloas Jaar was previewing a compilation/listening experience thing he called The Prism.

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