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UK Retailer GAME Reportedly Cutting Headcount

UK Retailer GAME Reportedly Cutting Headcount

GAME is cutting an unspecified number of roles according to reports. The UK high street video game retailer has told staff to expect redundancies. It has been reported that the company has moved most of the employees to zero-hours contracts.

UK Retailer GAME Reportedly Cutting Headcount

The decision by GAME was confirmed to Eurogamer by multiple employees under the condition of anonymity. The management of the retail store said those affected by the layoffs would be contacted separately either by email or telephone. This has made it harder to determine the number of employees that were affected.

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GAME has employed newer junior staff, called “cast members”, on zero-hours contracts. Going forward, the retailer plans to employ most non-managerial staff with zero-hours contracts.

For clarity, a zero-hours contract is synonymous with a casual contract where the number of hours the employee is expected to work is not specified. In other words, employees are only called when they are needed, and employees are not mandated to accept work when offered.

GAME was acquired by Frasers Group back in 2019 for £52 million. According to the company, their stores are spread over 320 standalone stores and concessions within Sports Direct and House of Fraser.

GAME layoffs are coming on the heels of its big January decision

UK Retailer GAME Reportedly Cutting Headcount

Back in January, the retailer confirmed that it was putting an end to its pre-owned video game business. The trade-ins business is expected to be phased out over the coming months, as revealed by the parent company Frasers Group. However, pre-owned games will still be available in the company’s standalone stores until stocks are exhausted.

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“As part of the integration of Game, we will be phasing out the trade-in, pre-owned, and Game Elite offerings in the UK over the coming months,” said a spokesperson for Frasers Group. “Pre-owned will still be available in our standalone stores across the UK while stock lasts, and Game Elite will still be available until the end of summer.”

Pre-owned games have been a cheaper way for players to purchase high-profile titles. The decision by the UK High Street chain is likely in response to a change in consumer behavior. The sale of digital copies of games has risen sharply in the past few years and has now overtaken physical copies.

According to the figures presented by the Digital Entertainment and Retail Association (ERA) trade body last year, digital sales now account for 90% of video game sales in the UK. There is also the subscription model which has also eaten deep into the market size of physical copies sales chart.

Instead of purchasing individual titles, an increasing number of players are paying for subscription services which gives them access to several titles. Virtually all the biggest console makers and some publishers run subscription models.

Microsoft’s Game Pass and Sony’s PlayStation Plus are both experiencing an increasing number of subscribers. Earlier in February this year, it was revealed that the number of Xbox Game Pass subscribers had surpassed 34 million.

GAME’s loss may be Cex’s win

UK Retailer GAME Reportedly Cutting Headcount

While GAME operated the trade-ins model, their website said, “most consoles, games, and gaming accessories,” were accepted but not titles from older consoles like PS2 and older. However, their biggest rival Cex has built a chain of around 600 stores globally—including 385 in the UK—around trading pre-owned electronics.

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Cex also stocks pre-owned computer accessories. The floor spaces of most Cex stores are occupied by thousands of video games, including titles that are older than accepted by GAME. Cex offers cash for pre-owned titles, unlike credits offered by GAME which are redeemable on future purchases.

The total elimination of pre-owned titles will alienate a large community of players who cannot afford titles at launch. Keeping this service is particularly important considering the rising cost of AAA titles.