GAME Changer: The Impact of the Collapsing High Street

Tipping points are a peculiar thing. They always seem obvious in hindsight - but it's next to impossible to see them coming in advance, or even to recognise them when they actually turn up. Yet almost every market transition - indeed, almost every transition of any description - has its tipping point, a moment where the various factors pushing in a certain direction become inexorable.

Because this is such an alluring concept for journalists, we've got a terrible habit of labelling all sorts of things as being tipping points, when they're almost certainly nothing of the sort. Every decent Android handset that comes out is the "tipping point" that'll swing the mobile market in Google's favour. Every attempt by Microsoft or Sony to appeal to a casual market is a "tipping point" that'll demolish all that Nintendo has wrought. "Is this the tipping point for social games?", we wonder aloud every time Facebook or Zynga makes a pronouncement, never entirely clear what's being tipped or what it's being tipped into.

All of which is a long-winded way of saying - when someone starts banging on about tipping points, unless they're talking in academic hindsight, they're probably best ignored. So, bearing in mind my own admonition on this matter, I'm not going to describe what's happening to UK retail right now as a "tipping point". It's more complex than that, and perhaps more worrying.

Customers who can't find a game they want in GAME will go elsewhere. They may never come back - and so, the decline continues.

For the benefit of those not following the saga, the UK's specialist retailer, GAME, is in trouble. How much trouble it's in depends on who you choose to ask, but after several tough years, the company finally seemed to hit the rocks with its creditors a few weeks ago and found itself unable to secure the lines of credit needed to acquire stock of new releases. After a few deeply uncomfortable days, the situation appeared to be remedied, at least temporarily - but even since then, signs out of the company have been less than encouraging.

This week, GAME held the official launch for Sony's PS Vita - but conspicuous by their absence were Ubisoft's launch titles, which aren't being stocked by the chain. The week before, the chain also failed to stock Nintendo-published 3DS title Tekken 3D Prime Edition, and most recently, customers who had pre-ordered Wii RPG title The Last Story had their money returned to them and pre-orders cancelled.

"We can't stock absolutely everything," was the explanation offered by the chain's marketing director - but pleading a lack of shelf space is unlikely to convince many people, given that this is the company which operates the UK's largest game stores, not to mention that these issues also extend to the firm's online retailing operation, where no such shelf space issues exist.

GAME isn't the only retailer in difficulty, of course. It's fair to say that the entire UK games retail sector is in a fairly sharp decline - far removed from its once legendary ability to grow strongly through a recession, boxed game sales are now dropping off at a startling rate. Even the overall decline in boxed sales doesn't tell the whole story of GAME's problems, since online retailers like Amazon have been grabbing an increasingly large slice of this steadily shrinking pie.

Rather, GAME is emblematic of the decline. The chain plans to shut around 10 per cent of its stores by Christmas this year, plans which will end up being the thin end of the wedge if it can't find a way to resuscitate consumer demand. The problem is that GAME has reached a stage where its decline is only likely to accelerate. Being unable to stock titles from major publishers or fulfil pre-orders is an extremely dangerous state for a specialist retailer to be in, as it draws the store's competence and usefulness into question for consumers. Customers who can't find a game they want in GAME will go elsewhere. They may never come back - and so, the decline continues.

Ten years ago, everyone was terrified of GAME. It was GAME which bullied the industry into accepting the removal of sales data from the weekly charts.

What happens next for GAME is in the lap of the creditors. It could end up bankrupt in a much shorter space of time than people like to imagine. It could find itself heavily stripped down and operating a diminished but profitable business. Equally, it could limp on as good money is thrown after bad, especially if publishers decide to rally around and support the most visible presence video games have on the British high street.

One possibility isn't on the table, though. GAME will never again be the force it once was in the videogames market in this country. Ten years ago, everyone was terrified of GAME. The whim of the retailer could make or break a game launch - anyone in the industry back then will recall, for example, that it was GAME which bullied the industry into accepting the removal of sales data from the weekly software charts.