The Game Group Plc Business Information, Profile, and History
As a specialist it is our continual aim to develop our business, providing our customers with the best shopping experience possible. We aim to constantly review and improve the unique offerings and services that customers see as our unique selling proposition, and therefore maintain our position as the leading specialist retailer in this growing market.
History of The Game Group Plc
The GAME Group plc is the largest video game retailing specialist in Europe. The company counts over 700 retail sales points--including company owned and franchised stores and in-store concessions--in the United Kingdom, Ireland, France, Sweden, Spain, and Denmark. Based in London, the group's largest business remains in the U.K. and Irish markets, where the company operates more than 400 stores, as well as in-store concessions in department stores, including the Debenhams, House of Fraser, and Fenwick groups. In France, the company operates through the ScoreGames retail chain, that country's leading reseller of video games and software. The company operates more than 100 stores in France. GAME Group has also expanded into Spain through the acquisition of the CentroMail retail chain, also a market leader with more than 140 stores, as well as a strong online and mail-order business. GAME's Spanish operations have also helped the company expand into Portugal, where it opened a store in 2006. In Scandinavia, the company operates 50 stores, primarily in Sweden, and, since 2004, in Denmark as well. GAME is also present online, operating e-commerce sites under its three primary brands. The GAME Group is listed on the London Stock Exchange and is led by Chairman Peter D. Lewis and CEO Martin Long. In 2006, the company's revenues topped £645 million ($1.1 billion).
Pioneering the U.K. Video Game Market in 1992
The GAME Group stemmed from the earliest attempts to develop a specialized network for video games in the late 1980s and early 1990s. The development of new and more powerful television-based video gaming consoles, accompanied by the arrival of the first graphics-based computer games had created new retail opportunities. In the United Kingdom, a number of retailers, including electronics retailers, department stores, and video games retailers, began offering video games as part of their product mix.
A more limited number of specialized video game resellers also appeared during this time. Among these was Future Zone, established in 1999 by Bev Ripley and Terry Norris. Ripley and Norris had been behind the creation of the Ritz video store chain, through their company City Vision during the 1980s. By the end of that decade, the pair had built Ritz into England's leading specialist video store retailer, before selling the chain to the United States' Blockbuster Entertainment Corp. for $120 million in early 1992.
Following that sale, Norris and Ripley became interested in the possibilities offered by the growing video game sector. Still in its infancy, and generally looked down upon by the rest of the entertainment sector, the video game sector nonetheless counted a growing number of highly enthusiastic customers. This enthusiasm, further stimulated by the significant strides made in graphics and processor technologies during the first half of the decade, would propel the gaming sector into the lead as the world's fastest-growing and single largest revenue-generating leisure market by the mid-2000s.
Norris and Ripley purchased a shell company called Rhino Group Plc and launched the Future Zone retail format at the end of 1992. Rhino was able to raise some $6 million in initial backing capital, including a reported investment by Blockbuster Entertainment, and by the end of that year, the company had opened the first six of a projected 140 stores.
Ripley and Norris planned to expand the Future Zone primarily through the development of new locations, projecting as many as 50 stores in operation by the end of 1993. The popularity of new generation gaming systems, and especially the Sega Mega Drive and the Super Nintendo, which together shared nearly 55 percent of the total market, helped to drive the group's growth. By the end of that year, Rhino had largely fulfilled its goals, with 46 Future Zone stores already in operation. The company was also close to becoming profitable.
At the end of 1993, however, the company came upon a new opportunity to acquire scale, when Virgin and W. H. Smith announced their intention to sell the 30-store Virgin Games chain, which had been developed as joint venture. Rhino quickly agreed to buy Virgin Games, paying £12.5 million pounds. According to Ripley, the acquisition came as something of a surprise. As he told Billboard, "It's a smashing deal, because I thought we would have to grow organically. We've not taken any of their overhead, and it's a straight bolt-on to our business." With 76 stores in operation, Future Zone claimed a 10 percent share of the U.K. video game market. That market--for both software and hardware--was estimated at nearly £1 billion ($1.5 billion) at the end of 1993. Game software sales alone were estimated at £400 million. Tellingly, sales of CD-ROM based games accounted for just 0.5 percent of the games market.
Linking with Electronic Boutique in 1995
By the early 1990s, another major player on the video game retail front was enjoying its own brisk growth. Founded in the early 1980s as a single kiosk in a shopping mall in Pennsylvania, Electronics Boutique (EB) had developed into one of the United States' leading video game retailers by the end of the 1980s, with more than 75 stores and $30 million in sales. The first video game boom in the early 1990s helped EB build its empire to more than 315 stores by the time Future Zone itself was just starting out.
EB had also launched an international expansion effort in the early 1990s, moving into Puerto Rico, Australia, New Zealand, Korea (the founder's native country), and Europe. For its U.K. growth, however, EB sought out a local partner. EB's opportunity came in early 1995, when it acquired a stake in the Future Zone. By then, Rhino appeared to have run out of steam--while the company struggled for profitability amid the morose British economy of the period, expansion of the group's retail chain had also slowed, reaching just under 120 stores at mid-decade. A downturn in the video game market hit Rhino hard at the beginning of 1995. In a bid for survival, the company agreed to sell 25 percent of its shares to EB.
Following the share purchase, the two companies entered into a service agreement under which Rhino converted its stores to the Electronic Boutique format and signage, gaining purchasing and support services from the U.S. company in exchange for annual licensing fees. Rhino also changed its name, becoming Electronic Boutique Ltd (EBL).
With new backing and a new format, EBL resumed its growth in the second half of the 1990s. The period marked a significant transformation of the video game industry, which within a few short years emerged as one of the world's most vibrant mainstream leisure categories. Driving the growth was a twofold emergence of technology: a new generation of multimedia-capable personal computers and a new generation of a gaming consoles--including the arrival of the Sony Playstation--featuring 32-bit and then 64-bit graphics capabilities.
The gaming market was divided into two segments based on the device use for playing the games: personal computers and branded game consoles. The console market, which was highly controlled by Sega, Sony, and Nintendo, enjoyed an especially strong degree of repeat business. Loyal customers were eager to be the first to buy new video game titles and console releases, often waiting in line overnight to do so. Recognizing this aspect of the business, EBL introduced a loyalty rewards scheme in 1997 to encourage more consumer activity.
By 1999, EBL had grown to a chain of more than 180 stores, and also boasted a number of in-store boutique concessions housed with other U.K. retailers. Already the leading games retailer in the United Kingdom, EBL cemented its leading position with the purchase of a major rival, GAME, which operated 82 stores in the United Kingdom and in Sweden. The purchase, which cost EBL £97 million, also diluted the U.S.-based EB's stake in the British chain to 18 percent. EBL decided to retain the GAME retail format alongside its EB store chain during the first years of the new decade. Following the acquisition of GAME, the company also launched the GAME Reward loyalty card. That program attracted some five million customers by the mid-2000s.
In the meantime, EBL developed a number of other outlets, including a wholesaling agreement to supply the the giant Sainsburys retail group. In 2001, EBL acquired failed U.K. online games pioneer Barrysworld, which had gone into liquidation that year. EBL initially operated the site under its original name, then converted it under a new name, www.Game.net.
EBL launched a still more ambitious expansion effort in that year, setting out to build up a European base. The company's first move came in June 2001 in Spain, where it acquired that country's leading specialist video game and computer software retailer, CentroMAIL. The purchase added 70 stores to EBL's holdings.
That acquisition was followed, in October 2001, with a move into France, where EBL bought up that country's ABC Games International and its retail format, ScoreGames. The purchase, worth an initial £7.6 million, gave EBL control of France's second largest video game retailer, with 37 largely Paris-based stores. As Chairman Peter Lewis told The Birmingham Post: "The acquisition of Scoregames is another significant step in our European strategy bringing our total number of branded, franchised and gaming outlets in Europe--outside the U.K. and Eire--to 141 compared with four just four months ago."
Game On for the New Century
EBL broke with Electronic Boutique Inc. in 2002. The U.K. operator changed its name to The GAME Group and carried out a re-branding exercise, renaming all of its stores under the GAME name. GAME Group also attempted to break free of its service contract with EB, which cost the company upwards of $6 million per year. However, EB's right to continue the contract until its 2006 end date was upheld in British court.
Into the mid-2000s, buoyed by the smash successes of such gaming consoles as the Playstation II and the Nintendo Gamecube; the introduction of the Microsoft Xbox, among others; and by the overall success of the video gaming market, the GAME Group's expansion remained strong and steady. In Spain, the company grew rapidly, doubling its number of stores by the end of 2005. At the same time in France, the company's Scoregames unit grew to more than 100 stores, and included a new acquisition, AddOn, in 2005. In the United Kingdom, the company, which chiefly operated in the High Street and city center sectors, opened its first out-of-town retail stores, starting in 2003. Not all of the group's expansion efforts were successful, however. The company attempted to launch a new DVD retail format, called Pure Entertainment, opening two stores by this name in Bristol and Reading. These were both closed in early 2005.
At the middle of the decade, GAME became interested in other new markets, such as Denmark, where the first GAME store opened in 2005. Through its Spanish subsidiary, the company also targeted the Portuguese market, opening its first store in that country in March 2006. Given predictions for the future strength of the video game market, with new consoles from Microsoft, Sony, and Nintendo expected in 2006, the GAME Group looked like a winner for the near future.
ABC Games International S.A. (France); Engine Technology Systems SL (Spain); Game (Stores) Ltd.; Game Digital Ltd; Game Financial Services Ltd.; Game Retail (U.K.) Ltd; Gameplay (GB) Ltd; Game Store Group Ltd; Game Stores Group Sweden AB.
Stirling Group Ltd.; LG International (U.K.) Ltd.; Prism Leisure Corporation PLC; Yamaha-Kemble Music (U.K.) Ltd.; Windsong Holdings Ltd; Vital Distribution Ltd.; Bell-Fruit Games Ltd.; Namco Europe Ltd.; Pinnacle Entertainment Ltd.
- Key Dates
- 1992 Bev Ripley and Terry Norris acquire Rhino Group and launch specialist video game retail format, Future Zone.
- 1993 Rhino acquires 30 Virgin Games stores from Virgin and W. H. Smith.
- 1995 The Electronic Boutique, Inc. (U.S.) acquires 25 percent of Rhino, which changes its name to Electronic Boutique Limited (EBL) and re-brands its stores.
- 1997 EBL launches a customer loyalty scheme providing discounts and other preferred customer offers.
- 1999 EBL acquires GAME, a rival video game specialist with stores in the United Kingdom and Sweden.
- 2001 EBL acquires CentroMAIL in Spain and Scoregames in France.
- 2002 The company rebrands as The GAME Group.
- 2005 The GAME Group acquires AddOn in France and opens its first stores in Denmark.
- 2006 GAME Group enters the market in Portugal.
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