While the retailer has had a tough time of late, its partial acquisition by Sports Direct could be just what it needs to make headway in the fledgling eSports market.

Over a quarter of floundering high street retailer GAME has been bought by Sports Direct. After a disappointing Christmas, the game retail firm hedged its bets on the UK release of the Nintendo Switch — only for supply lines to falter at the crucial moment. Last month saw GAME shares plummet to an all time low.

While analysts cite bargain-bin stock prices as the firm’s key draw for the global sports retailer, the long-standing retailer is not without its advantages. Its grassroots community — carefully cultivated during its live events — could be just what Sports Direct needs to get a sure foothold in the esports market.

"We see a number of reasons how Game and Sports Direct can gain from a closer working relationship, but it is surely the similar customer demographics that must be the key draw card here,” commented Adam Tomlinson, analyst at Liberum.

"The strategic play is not likely to have any concern with reference to the console cycle but rather growth in e-sports, Insomnia events and in-store gaming."

GAME currently has a large number of reward card holders, a service aimed squarely at the same young male demographic that frequents Sports Direct. This key consumer base holds an untapped marketing potential for both firms.

Additionally, it could stand that Sports Direct see an opportunity to cross-sell to both the eSports and console game participant.A healthy chunk of those who play sports games, such as perennial money maker FIFA, are likely to play the sport for real – and will therefore be purchasers of sporting equipment and apparel. 

Also, unlike most other retailers in the space, GAME owns many physical locations, most likely a key driver behind its diversification into the esports sector. Having acquired LAN events giant Multiply last year for £20 million, it went on to utilise that company's know-how at its BELONG brand arenas. It has rolled out 12 of the arenas so far, where players can participate in tournaments and trial new products like VR headsets.

"We spent an immense amount of time, and I am talking months and months and months, researching what the best names would be to put behind what we want to achieve, which is grassroots right through to professional eSports," said Martyn Gibbs, CEO of GAME.

GAME’s unique perspective and reach in the rapidly rising eSports market is likely to prove an asset to Sports Direct’s plans to diversify. Additionally, GAME forays into the eSports sphere over the last two years has also captured a previously lost niche; the prodigal PC gamer.

“21 percent of the people that are engaging with us in a BELONG arena are people we haven't seen before. They are new to our reward card,” commented Gibbs. “The key constituent part is that these people are PC gamers, they are both young gamers and esports enthusiasts that are playing on PC.”

The heady technical requirements of tournament gaming require the kind of high-end machines the average console consumer balks at, and GAME’s long track record with the biggest tech suppliers — whether that's SONY or Oculus — likely works out as an advantage in this space. As a result, the firm is beginning to recapture a market previously lost to online shopping and digital downloads.

Experiential shopping is another area where Sports Direct will likely utilise the game retailers tailored expertise. Suitably positioned consoles in stores, where shoppers can play sports-relevant games, could drive footfall at Sports Direct outlets and give it an edge against competitors.

In-store console and game trials are a selling technique GAME is well versed with across its retail outlets, and one it is further refining in its new arenas.

And while GAME doesn’t exactly live off its merchandise revenue, games merchandise is becoming ever more popular, whether it’s branded t-shirts or 3D printed drinking horns. Sports Direct could become the ‘official retailer’ of eSports events, flogging football shirts during FIFA tournaments, for instance. Or potentially using it’s cut-price global suppliers to up GAME’s tailored product output. Both retailers have access to a swathe of willing consumers, and the firm has extensive experience figuring out exactly what those specific market segments want.

Sports Direct has the funding, the merchandise and licensing deals, plus the global partners to make real waves in the eSports sector. GAME has all the right contacts, technical expertise, equipment and perhaps most significantly, the physical space and loyal customer base to accelerate eSports adoption across many markets.

Time will tell whether Sports Direct’s latest acquisition will prove a non-starter, but for now the possibility of real-sports combined with the grassroots niche game communities could spell fortune for both firms in the future — whether in potential cash cow eSports or in finding creative new ways of mobilizing their respective young male consumer bases.