Pachter: Games prices brought down retail

Financial magic eight-ball Michael Pachter, Wedbush Securities managing director of equity research, has said that low-cost games prices may be what's driven HMV, Blockbuster and GAME into the doghouse.

Speaking with Digital Spy, the pontificating analyst explained that selling titles below cost to drive interest was a disease of the UK games market.

"The UK games retail market is a joke, with retailers pricing below cost to drive traffic," he told the site.

Saying that the UK games market doesn't make money, Pachter claimed that big US retailers, such as GameStop, were put off entering the competition.

He continued: "That's great for consumers, but retailers can't make any money on games, hence the bankruptcies of GAME, HMV and Blockbuster, and the refusal of GameStop to expand into the market."

Furthermore, he warned that this is bad news for gamers who enjoy variety, as mass-merchants, like Dixons, will step into fill the need and offer fewer selections.

"The absence of GameStop and the demise of GAME limits the ability of consumers to trade in used games, depriving many of credits that can be used to purchase new games. Retail needs to make money to exist, and games retail in the UK doesn't make money."

image: © yoppy

James Lee

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James Lee is a freelance writer and analyst with extensive experience in the technology, media and games sectors. For the past few years he has provided content for internationally published industry reports, SEO companies and a variety of news-focused websites. Prior to this, James was responsible for covering news and producing in-depth features for GamesIndustry.biz while occasionally contributing to its sister-site. Eurogamer.net. In addition to this he has contributed to other notable sites such as CVG.co.uk, Edge-Online and DigitalSpy.