GAME could lose up to £2.5 million by not selling Mass Effect 3.
We brought you the news earlier that EA were pulling out GAME by withdrawing Mass Effect 3 and games post SSX. The loss could be huge according to Singer Capital Markets analyst Mark Photiades who had the following to say to the Guardian:
“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 such huge losses, how long can GAME stay afloat? Let us know your thoughts via the comment section below.