Wow...the big retail announcement out yesterday was that Game Group PLC, the UK's biggest specialist games retailer is to acquire Gamestation, the UK's only other significant games retailer, from Blockbuster for £74 million.

For those involved in the games business, this may not be great news.  Game is already a major force, taking something like 35% of the UK games market, and notorious for its aggressive trading terms - demanding 40% margins and sale or return on most products.  Could such terms, and a refusal to change them, be behind the recent spat between Game and Ubi Soft, which will see the former refusing to stock the latter's Oblivion game for PlayStation 3 - despite the game having been a huge seller on Xbox 360? 

Clearly, an even more powerful Game, with perhaps 50% or more of the UK games market will become increasingly able to demand whatever trading terms it requires - unless and until the games publishers all have the balls to do something about it en masse (not that we're suggesting an ELSPA cartel would be appropriate, or indeed legal).  Whispers are already going around the games industry about a possible monopolies and mergers/OFT investigation of this proposed acquisition, although this is more likely to be wishful thinking than based upon any real likelihood of a challenge.

Scary times for publishers - Game and Gamestation will continue to push preowned software in preference to new, such titles often 'churning' through five or more users, lining the retailer's pockets each time with nothing for those that made the game.  Whatever you might say about the supermarkets, HMV, Virgin, Dixons et al, they don't try to push second hand stock onto consumers.  Less money to the games publishers and developers and more for the retailer means less money spent developing new games...which can only be bad for gamers and the industry alike. 

In the longer term, of course, digital distribution will see high street retailers wither away as Microsoft, Sony and Nintendo control game distribution via a broadband link.  That's a long way off, though, and we'll see more IP-owning casualties before retail is finally taken out of the equation.