July 25, 2024

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Game Over, Game Mania: 3 Reasons Why It Has Come to This

Game Over, Game Mania: 3 Reasons Why It Has Come to This

Last weekend, news emerged that Heroik, the parent company of Game Mania, was receiving protection from creditors. Heroik is in more than bad condition and has to look for a buyer. Whether or not it will be found remains to be seen, but that doesn’t really come as a surprise. Thunderclouds have been gathering over Game Mania for some time. However, how did it get to this point?

Herwick himself points to three reasons that led to the current situation. While it’s difficult to know exactly what’s going on behind the scenes and under the hood, it’s less difficult to imagine each of these three reasons in general terms.

1. Digitization of the video game industry

It’s hard to deny that the gaming industry has been going digital for some time now, and no matter how you look at it, that’s a problem for stores whose focus has always been on selling physical games.

The share of physical games has already declined sharply and there is a real chance that this trend will continue. For a store like Game Mania, this means an identity crisis to which it is difficult to give an answer, and as the answer is sought, less and less money comes in. So one can try to diversify the offer, but that brings with it new challenges.

We’re also seeing the same issues crop up elsewhere, for example with big names like GameStop in America and GAME in the UK. This is certainly not a problem with Game Mania alone, but these top players usually have greater resilience and the ability to pivot and survive crises, although this is not as obvious for them these days.

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2. Highly competitive retail landscape

Another selling point for an established but still smaller team like Game Mania is competition from other players targeting the same consumer. The competition is not only numerous, but diverse, which means Game Mania has to downsize on several fronts.

For example, gaming companies themselves are increasingly becoming competitors to traditional gaming stores, and this of course has to do with the digital transformation we mentioned earlier. Many gamers are now purchasing their games directly through the digital stores of Sony, Microsoft, and Nintendo.

Game Over, Game Mania: 3 Reasons Why It Has Come to This

In addition, more and more major players are gradually emerging in the Belgian and Dutch market. Parties like Amazon and Paul often have a lot to offer at different points, especially in terms of price and convenience for consumers.

This reveals a major sore point for Game Mania, which is the fact that it completely missed out on a strong online presence and has to rely on chasing it to this day.

This also relates to the previous structure of franchisees, which meant that Game Mania had very few stores under its own management and many stores operated separately with their own operators. Having one central webstore for Game Mania would actually mean competition for all those individual operators, who would not actively promote that store because they would risk losing money in it. Own your store first, but in the bigger picture it’s hard to keep your head above water.

Game Mania didn’t really have a strong position to make waves online, and the efforts it eventually made to survive were often too little, too late. Many players in Belgium and the Netherlands are now going to other stores to buy their games, and this represents a downward spiral in which Game Mania is in danger of being swallowed up.

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3. Increased cost due to inflation

The Corona pandemic and the monetary and fiscal policies that were implemented at the time to deal with the crisis had some painful side effects. Inflation is one of these factors and also affects companies, especially companies that were already somewhat weaker.

Game Over, Game Mania: 3 Reasons Why It Has Come to This

Inflation drives up all kinds of costs, and while the tangible impact depends from company to company, it’s not hard to imagine that a party like Game Mania would be particularly affected. Wage costs rise and bills also rise elsewhere, for example in relation to transport. High interest rates, which are raised to combat inflation, are often not good for businesses because they make borrowing more expensive.

Game Mania has already come a long and difficult road and is now in danger of collapsing completely, just like the Free Record Shop, which it was a part of in the past. However, the current board says it has already taken some concrete initiatives that will make it easier to attract a buyer. For example, greater emphasis was placed on the Internet, a new store concept was launched and the range was expanded to include ‘pop culture merchandise’. However, it remains to be seen whether all of this will be enough to give Game Mania, once a strong brand, a future.