The long Game

Last March, computer game store Game was having difficulties, and HMV was gloating. Gennaro Castaldo, hearing the rival chain was finding it hard to get hold of stock, sensed a chance:

We are working hard on our own advertising, PR and promotional activities, including specially-built product zones on hmv.com, to send a positive message out to consumers so they know we have these titles in stock, and to highlight special deals we may be offering.

I think it's fair to say that the virtual-reality boot is now on the other player's foot controller. One winter on, and Game are offering to buy chunks of HMV's corpse:

Retailer Game has revealed that it is one of the 50 separate groups or individuals who have expressed an interest in buying all, or part of HMV.

Game has asked HMV's administrators, accountancy firm Deloitte, about the possibility of purchasing an undisclosed number of HMV stores.

Perhaps the best continuity bet for HMV having a (probably short-term) future comes from Hilco. They own the Canadian HMV, which operates under a licence.

It's a collapse jam-packed with irony.

HMV scents victory in blood of its rival

HMV's Simon Fox is pretty upbeat, despite having told the city that it's been selling "dire" numbers of CDs and DVDs in recent weeks.

How come? He's convinced the collapse of Game will help his store.

Righto, Simon. Although the total disappearance of Borders, Woolworths, and Zavvi hasn't noticeably helped your company, you think the closure of just half the Game chain will?

He does have some sort of convoluted logic:

"We've lived through a number of collapses of rivals – Zavvi, Woolies, Game – and when they are struggling they flood the market with distressed stock, which causes great disruption. They have now gone from 600 stores to 300 and that means that our position on the high street as strengthened."

The last big high street rival in music sales - Borders - closed in 2009, so if the echo of its closing down sales are to blame for the poor sales of recorded music in your stores now, you've got serious ghost problems.

More to the point, Game isn't shutting half its stores because it's getting more business than it can handle. There's not much to pick up there, surely?

Gennaro Castaldo watch: Game on

Given that HMV has the healthy prognosis of an asthmatic in a dust storm, you might think they'd show a bit of sympathy for rival GAME, which can't persuade suppliers to deliver stock. Not a bit of it:

HMV communications head Gennaro Castaldo added: “We are working hard on our own advertising, PR and promotional activities, including specially-built product zones on hmv.com, to send a positive message out to consumers so they know we have these titles in stock, and to highlight special deals we may be offering.”

Given how badly HMV managed to fumble the advantage handed them by the closure of Woolworths, Borders and Virgin/Zavvi, you've got to wonder if they really should be so excited by GAME going bottom-up. Apart from anything, doesn't it suggest that flogging computer games from a special shop might be a shit business to be in?

Gennaro Castaldo Watch: Game is afoot

Staff from dwindling-computer-games giant Game have been spotted nipping into Tesco to buy Nintendo 3DS at silly prices, as they can still make a profit flogging them on in their own shops.

Sitting above the fray is HMV's Gennaro Castaldo:

"Some people may enjoy Game's discomfort on this or may feel they acted inappropriately, but others may consider the more valid question to be why another retailer made it possible in the first place," HMV PR boss Gennaro Castaldo told NowGamer.

"Perhaps we should all ask ourselves whose actions ultimately created the greater potential to devalue what is a wonderful piece of new technology that we should all be working hard to support?"

Boo-hoo-hoo, Tescos is undercutting us, a boo-hoo-hoo. Oddly, when HMV were flogging chart singles for 99p and throwing out catalogue albums for a pittance, I don't recall Castaldo worrying that they might have been devaluing records. But then it was only independent record shops that were being driven to the wall then, wasn't it?

HMV could pop into Tesco to top up its stock of 3DSes, but it's probable that they can't afford to do it.

HMV launch their new look. Again.

The number of times HMV has launched its new face onto the world, you might think nobody is much noticing. The latest excuse to try and interest someone, anyone, in their declining sector has been the re-opening of the London flagship, upon which deckchairs have been decisively re-arranged:

Deep in the bowels of the garish Trocadero centre, HMV has turned a significant chunk of its store into a paradise for computer game enthusiasts. With sleek black walls, an "over-18s" annexe, and more than 70 whirring computers and giant plasma screens, the so-called Gamerbase room allows visitors to choose and play hundreds of computer games.

Like the world's most technologically advanced youth club, the room is a godsend for gamers - and possibly the first of many across the country.

(Yes, Sunday Telegraph - 'possibly' in the sense of "possibly the first, if you don't count the one in Merry Hill.)

Simon Fox of HMV trots out the justification for dumping CDs and concentrating on Games:

"Big picture, if you look over the next three years, what we have said is that the CD market will decline by 10 per cent per annum, so we need to replace that with higher-growth categories: games, technologies, band merchandise, and this is part of that. We need to respond," says Fox, as he shows The Sunday Telegraph round the store.

"For HMV we are already a natural destination for music and film, we want to become an equal destination for games, and this is about making our stores a real magnet for gamers to come and play and buy," he says.

Lessening dependence on a sector which has seen the closure or sale of MVC, Fopp, Tower, Virgin, Borders and so on might seem to make sense, although entering a sector which has the same sort of problems, perhaps less so. Documents in the recently green-lighted merger of Gamestation and Game [pdf] indicated the main motivation for reducing the number of games-only chains to one was the challenge of digital downloads for games, and the supermarkets eroding margins for physical products. In effect, by turning to games from music, HMV is like a sportsman trying to cope with a bad back by swapping weightlifting for shot-putting.

[Thanks to James P for the link]