Tesco claims games retail is “too unstable”

UK super market giant Tesco has said that games retailing is “too unstable” following the recent Game Group saga that saw the company head into administration before being bought up.

The company’s Rob Salter said as much to MCV, stating: “I think there is little doubt that the current commercial model for games as packaged goods is unsustainable.”

“In determining how resources are allocated, space for example, a retailer looks at key factors like market growth, margin, cost to serve and ease of operation, shrink risk, returns and exit protection, and broader traffic and spend driving properties.

“Video games currently scores poorly on every one, and that cannot be good for anyone involved in the games business and for it’s long term future.”

But, as Salter added, all is not lost.

“We can address many of these issues, but it requires a collective will to do so between both publishers and retailers.

“Digital does and will play a key part in the future of the video games business. However, as others have learnt to their cost, having an ambition without a clear plan of transition that retail partners and customers buy into, is even more risky than the business we are already in.”

With Game Group now back up and running, albeit at a greatly reduced capacity, is a new era of games retail upon us?