GAME Australia’s franchise operator has gone into administration, just months after its UK counterpart also filed to be taken under receivership. News of the company’s demise was broken by Kotaku Australia, and filings with ASIC have also confirmed the reports.
ASIC’s filings note that GAME Australia’s owners – TGW Pty Ltd – filed today a document of “Notification of Appt of Administrator Under S.436a, 436b, 436c, 436e(4), 449b, 449c(1), 449c(4) or 449(6) (505U)”. Kotaku also notes that emails were sent to all its stores across Australia about the latest developments, after the company had trouble getting Diablo 3 into stores.
As reported by many, it is said that PriceWaterhouseCoopers will be the administrator of the company.
GAME Australia’s demise follows its UK counterpart, who also faced similar problems. Lower sales and unable to secure products saw GAME in the UK going into administration. New owners were soon brought in, and are hoping to turn GAME back into profit.
However while it has been cited that digital distribution of games that saw the demise of GAME, it might be a different case in Australia. I think it could be lower sales due to strong competitors in Australia with JB Hi-Fi and EB Games, and games being brought overseas since the regions in Europe and Australia are essentially the same (PAL).
However, that’s not to say that digital distribution did not have an impact on its bottom line – it did, but also to many other game stores. Especially with many games now being offered via Xbox Live, Steam or Origin – just to name a few. In addition, there has been a rise with small, arcade-like games with mobile devices or on your Xbox 360 and PS3 – which are only offered in those stores, rather than physical retail stores.
We’ll keep you updated on what is happening with GAME Australia.
Update: The following is a statement from PwC in relation to GAME Australia
PwC partners Kate Warwick and Greg Hall have been appointed Voluntary Administrators of TGW Pty Limited – trading as GAME.
GAME is a retailer of video games, games consoles and PC software & accessories and operates 92 stores across Australia, employing c.500 staff.
TGW Pty Limited is a subsidiary of The GAME Group Plc, a UK public company which was placed into administration on 26 March 2012.
Kate Warwick, PwC partner, said, “Initially we will continue to trade all stores, operating these on as close to a ‘business as usual’ mode as possible whilst we get a clearer understanding of the current state of the business and actively pursue options to secure its future.”
Ms. Warwick added “Prior to our appointment, the company’s management had been exploring interest in investing in the business with a number of parties and we will look to see whether this interest can be harnessed to continue the business or part of it through the voluntary administration process.”
TGW Pty Limited’s UK based parent company faced serious cash flow and profit issues. “While we are still investigating the causes behind the Australian administration; the impact of the administration of its parent, an ambitious national roll-out combined with the current soft retail environment appear to be key factors,” said Ms. Warwick.
Further updates will be made to creditors as soon as more information becomes available.
Ms. Warwick also noted that the company’s customers hold various claims against the company under loyalty cards, gift cards and vouchers. Ms. Warwick said “We are working on schemes aimed at giving customers some return on these claims if they are used to make additional purchases.” Further details will be available to customers on-line or in store from appointment.