GAME buying Game Station: Should you be worried?

Now that the Competition Commission has provisionally approved high street specialist retailer GAME’s £74 million acquisition of rival Game Station, it looks like the deal is a dead cert.

The purchase was first referred to the CC in August because of, well, you guessed it, competition fears.

The argument goes that if a single player has a monopoly on the market, then there’s no rival to keep it on its toes and the average gamer loses out.

So, should you be worried that the potential acquisition of specialist video game retailer Game Station by rival GAME will mean that game prices will go up?

Well, according to the CC, which has today revealed the reason for its decision, there’s nothing to worry about.

Inquiry chairman Diane Coyle said: “…we do not believe this acquisition would give the merged company the opportunity to significantly raise prices or reduce service for new or pre-owned products, or to cut trade-in prices paid to customers.”

The CC said that if the merged company was to raise prices for new games then gamers would take their business elsewhere, to independents, high-street retailers, supermarkets and the wonderful world of the Web.

While the CC admits that “there are fewer alternative retailers” giving gamers the option to trade in and buy pre-owned titles, it reckons “several competitors are expanding rapidly” and “customers are increasingly making use of alternative retail channels”.

On the issue of pre-owned prices though, the CC doesn’t believe prices will go up because “competition for new gaming products effectively sets a cap on prices for pre-owned products, as customers could easily switch to new products sold elsewhere were the merged company to increase pre-owned prices”.

So, in essence, the CC reckons that pre-owned prices are so close to new game prices already that it would be pointless charging gamers more.

Interestingly, two members of the Group “disagreed with the conclusion in relation to the potential for a substantial lessening of competition with regard to the trade-in and sale of pre-owned gaming software”. Because of this, the Chairman had to step in and cast her vote in favour of a provision clearance.

As you’d expect, GAME has welcomed the provision findings. We won’t know for sure what the decision, expected no later than January 23, will be, but it looks like we’re going to see both companies getting into bed with each other before long.

GAME has already spoken about its intentions to run the two shops separately during the CC’s investigation, and, assuming the deal goes through, after it too. Add to this the CC’s logic already discussed above and it looks like gamers won’t be left out of pocket. As they say though, only time will tell.