Analysts weigh in on just how badly GAME's disagreement with EA and other publishers will affect the retail chain. Since Wednesday's news, shares in "Game Group" have gone done another 5%.
This drop in share price, if it continues on this downward spiral, might result in a loss of about £2.5 million in lost profits. This is ON TOP of the forecast losses of £8 million for this year.
Furthermore, more losses could be incurred from customers who ended up with the short end of the stick on this deal. Customers who may be permanently turned away from purchasing from GAME in the future if reservations and item availability are not guaranteed.
Other analysts weigh in on the matter throughout the rest of the article. There is, however, this little gem from someone named Nick Bubb:
Yes Nick, nobody has heard of Mass Effect 3 at all. I'm assuming Nick also lives in a cave given how many advertisements there have been for Mass Effect 3 on just about every form of mass media out there. Derp.
This drop in share price, if it continues on this downward spiral, might result in a loss of about £2.5 million in lost profits. This is ON TOP of the forecast losses of £8 million for this year.
Working on the assumption that a decent triple A title sells 0.8m-1m titles in the first few weeks of release in the UK and assuming Game has around 20% share, we calculate that by not stocking Mass Effect 3, Game is potentially missing out on around £6m-£7m of revenues in the UK given the title will retail for £39.99.
With new software margins of around 24% this could result in £1.5m-£2m of lost gross profit in the current year. It is also worth noting that margins will suffer as a result of the reward card points being offered in compensation. We estimate this could amount to another £0.3m of forgone gross profit as typically pre-orders account for around 30% of initial sales. So in total there could be £2m-£2.5m of lost UK profit in a year where we are already forecasting losses of £8m.
With new software margins of around 24% this could result in £1.5m-£2m of lost gross profit in the current year. It is also worth noting that margins will suffer as a result of the reward card points being offered in compensation. We estimate this could amount to another £0.3m of forgone gross profit as typically pre-orders account for around 30% of initial sales. So in total there could be £2m-£2.5m of lost UK profit in a year where we are already forecasting losses of £8m.
Furthermore, more losses could be incurred from customers who ended up with the short end of the stick on this deal. Customers who may be permanently turned away from purchasing from GAME in the future if reservations and item availability are not guaranteed.
Other analysts weigh in on the matter throughout the rest of the article. There is, however, this little gem from someone named Nick Bubb:
So, had you heard of this new so-called blockbuster game Mass Effect 3 that comes out next week? Well, nor had we, and despite all the tut-tutting about how ominous the EA supply problem is, we suspect that it is just a storm in a teacup in a seasonally quiet time of year, as the big game suppliers can't really afford to do without Game at Christmas, given its huge share of the market. We are more concerned about the lack of news on the overseas disposal front.
Yes Nick, nobody has heard of Mass Effect 3 at all. I'm assuming Nick also lives in a cave given how many advertisements there have been for Mass Effect 3 on just about every form of mass media out there. Derp.
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