What Do EB Games Global Closures Mean for Australia?

The future of EB Games is uncertain following the announcement that its New Zealand operations will close all stores by 31 January 2024. This decision reflects broader trends in retail, highlighting the challenges faced by physical stores in an increasingly digital marketplace. Customers in New Zealand will have access to the EB Games Australia website by March 2026, but the closures raise questions about the viability of the brand in the region.

Last updated: 31 October 2023 (BST)

What’s happening now

EB Games has confirmed that all its stores in New Zealand will cease operations on 31 January 2024, with the distribution centre closing on 28 February 2024. This decision follows a period of financial losses and declining foot traffic, signalling significant challenges for the retailer, which was once a staple in the gaming and pop culture sector. The company’s managing director, Shane Stockwell, indicated that despite receiving offers, no viable proposals emerged to sustain the New Zealand business.

Key takeaways

• All EB Games stores in New Zealand will close by 31 January 2024.
• The distribution centre will shut down on 28 February 2024.
• Access to EB Games Australia’s website for New Zealand customers will be available by March 2026.
• The New Zealand operations have reported multimillion-dollar losses.
• Employees may have the option to relocate to Australian stores.

Timeline: how we got here

The timeline of events surrounding EB Games' New Zealand closures is as follows:

• 1997: EB Games Australia is established as Electronics Boutique.
• 2000: The first EB Games store opens in New Zealand.
• 2005: GameStop acquires EB Games for $1.44 billion.
• 2020: EB Games Australia closes 20 outlets due to market pressures.
• 31 January 2024: All New Zealand stores to close.
• 28 February 2024: New Zealand distribution centre closes.
• March 2026: New Zealand customers gain access to EB Games Australia website.

What’s new vs what’s known

New today/this week

EB Games has made the significant announcement regarding the closure of its New Zealand operations, citing a lack of commercial viability and ongoing financial losses. This marks a critical juncture for the retailer, which has struggled in recent years to adapt to changing market conditions.

What was already established

Previously, EB Games had faced challenges due to increasing competition from online retailers like Amazon and JB Hi-Fi, as well as shifting consumer habits favouring digital game sales over physical copies. The company had been proactive in attempting to restructure and improve its business model but ultimately deemed the New Zealand market unsustainable.

Impact for the UK

Consumers and households

The closure of EB Games stores in New Zealand may not have a direct impact on UK consumers but reflects a wider trend that could influence retailers globally, including those operating in the UK. As physical shopping continues to decline, consumers may be increasingly reliant on online platforms for gaming and related products.

Businesses and jobs

While the closures primarily affect New Zealand, they highlight issues that UK retailers may also face. The decline in foot traffic and the need for businesses to pivot towards online sales could lead to job losses and changes in the retail landscape in the UK, particularly for those retailers that have not adapted to the digital shift.

Policy and regulation

No immediate regulatory impacts have been noted in the UK; however, the general trend of retail closures may prompt discussions around consumer protection, employment regulations, and support for businesses struggling in a transitioning market.

Numbers that matter

• 38: The number of EB Games stores currently operating in New Zealand.
• 336: The number of EB Games stores in Australia.
• 1.44 billion USD: The amount GameStop paid to acquire EB Games in 2005.
• Multimillion-dollar loss: The reported financial loss for EB Games in New Zealand during the 2024 fiscal year.
• 20: The number of outlets closed by EB Games Australia in 2020.

Definitions and jargon buster

• EB Games: A retailer specialising in video games and pop culture merchandise, operating in Australia and New Zealand.
• GameStop: A US-based video game retailer that acquired EB Games in 2005.
• Multimillion-dollar loss: Refers to a financial loss amounting to several million dollars, indicating significant financial challenges.

How to think about the next steps

Near term (0–4 weeks)

In the immediate future, customers in New Zealand can expect the final operations of EB Games to conclude by the end of January 2024. Employees should be informed about potential relocation opportunities to Australian stores.

Medium term (1–6 months)

As the closures occur, EB Games Australia will continue to operate, and the focus will shift to how it can sustain its business model against growing online competition. Monitoring how the Australian market adapts will be crucial.

Signals to watch

• Sales performance of EB Games Australia post-closure of New Zealand operations.
• Trends in online shopping and shifts in consumer behaviour in both Australia and New Zealand.
• Potential announcements regarding further store closures or restructurings in Australia.

Practical guidance

Do

• Consider shopping online through EB Games Australia if you're in New Zealand.
• Stay informed about potential job opportunities if you are an employee of EB Games in New Zealand.
• Monitor the gaming market for changes in retail dynamics.

Don’t

• Don’t assume that closures in New Zealand will not affect the brand’s reputation in Australia.
• Don’t overlook the shift towards online shopping when considering future purchases.
• Don’t disregard the potential for further closures in the retail market.

Checklist

• Check for last-minute deals at EB Games before closures.
• Explore alternative online gaming retailers.
• Review job opportunities if you work in EB Games New Zealand.
• Stay updated on news regarding the gaming retail sector.
• Consider your gaming purchasing habits as the market evolves.

Risks, caveats, and uncertainties

The announcement regarding EB Games’ closures raises several uncertainties. The exact number of employees affected has not been disclosed, and the future of the brand in Australia remains unclear as consumer preferences continue to shift. Additionally, potential changes in the competitive landscape could further affect the viability of existing retail operations. The ongoing evolution of the gaming market means that retailers must be agile and responsive to survive.

Bottom line

The closure of EB Games in New Zealand is a significant indicator of the challenges facing physical retailers, particularly in the gaming sector. As the company shifts its focus to maintain operations in Australia, it serves as a reminder for consumers and businesses alike about the increasing importance of adapting to a digital-first marketplace.

FAQs

What is happening with EB Games in New Zealand?

EB Games will close all its stores in New Zealand by 31 January 2024, citing financial losses and lack of commercial viability.

When will the EB Games distribution centre in New Zealand close?

The distribution centre will shut down on 28 February 2024, following the closure of retail stores.

What options are available for EB Games employees in New Zealand?

Employees may have opportunities to relocate and work in the Australian EB Games operations.