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PwC promptly shut 277 of its 609 UK and Ireland stores, making 2,104 out of 5,126 staff redundant, but said “a number of parties have expressed an interest in purchasing part or all of the business and assets of the group”.

It didn’t have to be this way. paidContent understands Game Group, three years ago, sought strategic proposals for survival in the years ahead…

• Executives were given a strategy that made clear the industry would see a tipping point from physical to digital game distribution in 2012.
• In response, the strategy recommended cutting down on bricks-and-mortar store count.
• And it made suggestions for using the Game brand to power digital storefronts on PC, console and other platforms.

But paidContent understands Game, under then-CEO Lisa Morgan, did not adopt the strategy, deciding instead that such an advance was not necessary.

At a time when Game was being urged to swap bricks for clicks, it made an even bigger foray in to the high street by acquiring Gamestation. Now it is not uncommon, in some towns and cities, to find two Game stores and an additional remaining Gamestation just a few streets apart.

And Game has been caught in a perfect storm…

• Reliant on console hardware, it has hurt as Microsoft (NSDQ: MSFT), Nintendo and Sony (NYSE: SNE) have introduced new input peripherals but not new machines.
• Dependent on A-list titles and Christmas software sales, it has watched as consumer spending has been impacted and as game choice has contracted around a few, expensive-to-produce franchises.
• Game’s innovative pre-owned retail channel has also made frenemies out of some publishers, which have limited certain features only to first-time buyers or, latterly, subscribers.

Game publishers are more bullish than ever about the prospects for generating such in-game revenue directly from players. And a growing number of titles is available through Xbox Live Arcade, for example.

But the console sector is not yet ready to wholeheartedly abandon plastic-box distribution – tier-A titles are priced at a hefty premium over even the pricey equivalents stocked on Game’s shelves.

That does not necessarily mean a console opportunity for Game, however – although it launched a PC download service, the console retail channel is locked up for operation entirely by the console makers.

In the remaining space, Game recently introduced a version of a digital strategy of its own…

• Selling points cards for Facebook Credits, Zynga games, Xbox Live and Playstation Network.
• It has also tried to secure publisher agreement for exclusive digital content access with boxed titles sold in Game.
• In October, it introduced its own system for online game transactions, GameWallet, adopted sparsely.
• And it had also sought an early foothold in the OnLive cloud game service.

In 2010/11, Game’s digital revenue increased by 27 percent to £41 million.

But, having passed on the earlier digital opportunity, it seemed too little, too late. Now administrators’ priority is likely to strip significant high street presence out of the company, especially where duplication occurs around the UK.

“The group has faced serious cashflow and profit issues over the recent past,” PwC’s joint administrator Mike Jervis told investors. “It also has suffered from high fixed costs, an ambitious international roll-out and fluctuating working capital requirements.

“Despite these challenges, we believe that there is room for a specialist game retailer in the territories in which it operates, including its biggest one, the UK. As a result we are hopeful that a going concern sale of the business is achievable.”

Game’s young staff have always been very helpful and knowledgeable in my experience. Gamers should hope that many of them get to carry on working in a right-sized high street retail business that can go on selling games on discs, until either the industry truly tips to digital or Game can forge a digital path of its own.

Well there we have it. Just had the phonecall to say Game is in adminstration and I have now been made redundant.

— Heather Lawrence (@exeliax) March 26, 2012

Just evacuated all customers an told to close store #GAME

— kyle alleyne (@daddyka89) March 26, 2012

Just been made REDUNDANT KMT #GAME full of shit

— kyle alleyne (@daddyka89) March 26, 2012

Yup, been made redundant. Just been told I need to work out the week to help pack up and my Game store is closed for good…

— Jordan Cormican (@JrdRIOT) March 26, 2012

One sad thing about GAME is that so many young people will be made redundant. Many work lives start there – this isn’t a nice start.

— Alex Donaldson (@APZonerunner) March 26, 2012

So a friend just got made redundant a few minutes into her shift at GameStation. it’s going well then. #GAME

— Jennifer Taylor (@littlejuicebox1) March 26, 2012

Very sad day indeed.Forever proud of my former GAME and gamestation colleagues who have shown such dignity and fought so hard

— Ian Shepherd (@IanAShepherd) March 26, 2012

It breaks my heart to see a business made up of such magnificent people come to this and yes, I think we should have been able to avoid it.

— Ian Shepherd (@IanAShepherd) March 26, 2012

@GeorgeMacD thanks George, I’ve appreciated the feedback today but no getting away from the fact that this happened on mywatch.

— Ian Shepherd (@IanAShepherd) March 26, 2012

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“The launch of a second brand is an exciting opportunity for us and the rationale is very simple. Having two brands will allow us to meet the needs and preferences of different customer segments more effectively,” CEO Jeremy Darroch told The Guardian’s Changing Media Summit on Wednesday.

“We’ll offer two distinctive ways to watch: the market-leading full Sky service for the whole family, complete with the widest range of channels, high quality products like Sky+, HD and Sky Go, and the peace of mind of a monthly bill; or the flexible, more spontaneous, pay-as-you-go service of NOW TV.

“Because NOW TV will also be ‘powered by Sky’, customers will still know that it will give them the best, exclusive content and a high quality experience, from a provider they can trust. Either way, we believe we can offer even more customers a product that’s just right for them.”

The Now TV placeholder website is now live, taking consumers’ expressions of interest.

Darroch did not exactly specify why Sky needs a separate brand in over-the-top (OTT). But it may be about balancing caution with the brave new connected TV opportunity. If Sky branded its new OTT service “Sky” and made it cheaper, disgruntled satellite subscribers may downgrade to the OTT option.

Another company which span off a separate entertainment brand last year was Netflix (NSDQ: NFLX), which caused controversy when it created “Qwikster” to operate its DVD rental business separate from its streaming business.

After pioneering pay TV in the UK two decades ago, Sky last year hit its target of achieving 10 million customers for its satellite pay service. Satellite customers now get access to their channel bouquets through Sky web, mobile app and connected TV app channels.

But this January Sky said it would now offer its channels without a long-term contract and without satellite to customers over an array of internet devices, including connected TV and iPad. Packages will be movies, entertainment and sport, but the firm may also peel off individual shows for payment.

“The long-awaited explosion of connected devices is now upon us,” Darroch said. “This opportunity will only grow. It can be very complementary to our service.
Thirteen million homes don’t take pay TV from any provider – we can reach out to them.

“Any notion Sky is still just a satellite broadcaster should have well and truly gone out the window by now.”

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