Things looking rocky for GAME’s buyout of Gamestation

If you’ve been following mine and Jim’s coverage of the buy-out of the UK’s Gamestation retail chain by its bigger, uglier evil twin GAME, you’ll perhaps understand why I was briefly tempted to write a post for this story consisting only of the word “Woohoo!” followed by a video of a smiling baby panda doing backflips. In the interests of professionalism however, I feel obligated to actually explain the full story. You know, with words, and facts and things.

Around a month after GAME’s acquisition of its only serious UK rival, the Office of Fair Trading announced that it was considering whether or not the deal presented a contravention of its regulations against business monopolies. (The rest of the country responded with “Well duh!”). After investigating, the OFT has revealed that it indeed is unconvinced that GAME’s actions haven’t lessened market competition, and that it will be referring the case to the Competition Commission for further inspection. Says the OFT: 

This merger involves the loss of competition between two parties who, in some segments at least, appear to be each other’s closest competitors and in circumstances where we can not confidently rely on new companies entering the market to resolve any issues quickly.

Without better evidence that competition from other suppliers will be sufficient to prevent the merged firm from raising prices or cutting back services in a way that would harm consumers – in a market where retail sales amount to around £1.5 billion – we must refer to the Competition Commission for fuller inquiry.

Says GAME:

We are disappointed that the OFT found difficulty in clearing the transaction. We firmly believe that a combination of GAME and Gamestation will not give rise to any substantial lessening of competition and intend to vigorously pursue this position before the Competition Commission.

Whichever store you prefer as a retail chain, this is great news that’s well overdue. Regardless of where you stand on the issue of GAME’s soul-sucking evil/lack thereof, it’s seemed screamingly obvious since this whole thing began that the deal is good for market competition in exactly the same way that wearing a dead goat’s entrails as a hat is good for looking sexy. With the UK games retail market very healthy at the moment, it would be a massive shame if one company got all the pie, so here’s hoping a more sensible arrangement gets worked out soon. 

[Edited for gratuitous baby Panda content

David Houghton