Mass Effect 3 could cost GAME up to £2.5 million

GAME’s inability to secure stock of Mass Effect 3 for the game’s launch on March 9 could result in the retailer losing up to £2.5 million in profit, Singer Capital Markets’ Mark Photiades has told The Guardian.

The figure is the result of both the potential loss in sales of the game and GAME’s Reward Card points giveaway being offered to customers as compensation for the Mass Effect 3 no show.

“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 per cent 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,” estimated Photiades.

“With new software margins of around 24 per cent 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 per cent 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.”

Photiades concludes that the Mass Effect 3 saga is evidence of GAME’s focus on “pure survival as opposed to revival at this stage”.

Mass Effect 3 is available to pre-order at various retailers, including Amazon.co.uk

While GAME not stocking Mass Effect 3 is a big deal, we question the 0.8-1m sales figure given by Photiades – the total seems quite high given the sales of Mass Effect 2, which shifted 572,100 in its first week across the US. Even if you take into account that Mass Effect 3 is launching on Xbox 360, PS3 and PC, sales in the UK would have to be phenomenal to reach the 1 million figure.

Last year in the UK only five games sold in excess of 1 million units: Skyrim, Zumba, Battlefield 3, FIFA 12 and Modern Warfare 3. Even Assassin’s Creed Revelations could only manage 732k during the busy holiday buying season.