Report: GAME Australia goes into administration

UPDATE at 12:05pm: PricewaterhouseCoopers has been appointed Voluntary Administrator of GAME Australia.

Kate Warwick, a PwC partner said in a statement: "Initially we will continue to trade all stores, operating these on as close to a 'business as usual' mode as possible whilst we get a clearer understanding of the current state of the business and actively pursue options to secure its future.

"Prior to our appointment, the company's management had been exploring interest in investing in the business with a number of parties and we will look to see whether this interest can be harnessed to continue the business or part of it through the voluntary administration process."

Warwick said that PwC are still investigating the causes behind the Australian administration, although the impact of GAME UK's administration, the "ambitious national roll-out" combined with the current retail environment are believed to be key factors.

Just because a business enters administration does not mean it's the end of the line.

The administrators are currently working on schemes aimed at giving customers some returns on claims they hold against the company such as loyalty cards, gift cards, and vouchers. A company FAQ details what cardholders can and can't do with the vouchers and gift cards they currently own.

It is important to note that just because a business enters administration does not mean it's the end of the line. GAME UK was able to come out of administration after a purchase by OpCapita. It is the role of the administrator to look into all the possible options that could save the retailer, whether this means finding a buyer, negotiating loans and debt repayment, or downsizing the business.

UPDATE at 4:00pm: GAME Australia texted customers today informing them that they will not be stocking Diablo III and anyone who pre-ordered the game will not receive a refund. While some GAME customers have told Polygon that they have been assured by GAME staff that they will receive their pre-orders and select GAME retailers managed to receive stock, the official word from GAME Australia came in a text message that Kotaku Australia obtained, which reads:

"Due to the appointment of an administrator to our business this morning, it is with regret that I inform you all that our stores will not be receiving any stock of diablo 3 (sic). Because of this, we regrettably will be unable to fulfill any pre-orders. Also, we will be unable to refund any deposits paid towards a pre-order of diablo 3. If you need any more info, please email customerrelations@game.com.au"

Under Australian law, it is legal for a company in administration to not perform refunds. Those who are owed money from pre-orders can become unsecured creditors if they register with the administrator, but they will only be paid after secured creditors like banks and lenders are paid (if there are funds to pay them at all). Often, customers are at the bottom of a long list of creditors that need to be paid, such as employees with outstanding sick leave, holiday leave, and superannuation, electricity, phone, internet and water providers, and real estate agents. If the business becomes insolvent and goes into liquidation, a customer cannot commence or continue any legal action unless they get permission from The Supreme Court.

We will update this story as more information becomes available.

Initially we will continue to trade all stores, operating these on as close to a 'business as usual' mode as possible ...

[View original story below.]

GAME Australia has gone into administration according to an email that was sent to its staff this morning, although the retailer has not confirmed the state of its business to the media.

Kotaku AU reports that GAME Australia sent an email to all staff confirming that the retailer was going into administration. The Australian site also reports that it received confirmation from GAME's marketing manager and managing director about the state of the retailer.

The email has not been made available to the media and GAME are yet to release an official statement. Polygon is currently chasing both.

Back in March, the managing director of GAME Australia, Paul Yardley said that the retailer was looking for a buyer after GAME Group in the UK went into administration. When we spoke to him last month, he seemed confident about the future of the retailer, explaining some of the strategies GAME Australia was employing to remain relevant in an increasingly digital market.

Kotaku AU reports that GAME will not be receiving copies of Diablo III due to payment issues with its shipping companies. When we contacted the PR agency that represents GAME Australia, we were referred to its administrator at PricewaterhouseCoopers. We have not received comment from GAME or PWC.