Another software distributor has fallen off its perch as pre-GST confusion, rising interest rates and a plummeting dollar contribute to hamper software sales.
Sydney-based software distributor HiLad has gone into liquidation and Metro Games, a trading arm of PlayCorp, is fighting off rumours it will be the next victim.
Metro Games' announcement it is "reinventing its software distribution" has been interpreted by the industry as the first step to a wind-down.
Chris Levickis, Metro Games' PR manager, is assuring retailers that "it is still business as usual". Metro Games will continue to distribute LabTech and Bluebite products and is still on contract with LucasArt.
"It's a normal day-to-day economic business decision that has really been blown out of proportion because of the what happened to Dataflow," says Levickis.
He denies that the com- pany is likely to go under, adding that the current reshuffle is simply to "remove stock levels before ordering any more".
With the market still recovering from the shock of the Dataflow collapse, industry sources are suggesting that "a couple of other distributors will go under", although no one is naming names.
Most major games distributors have experienced a plummet in sales so far this year, a trend which, according to Ian Mackay, general manager of software distributor Manaccom, was predicable.
"It is no secret the GST will up the price of software and that this could contribute to a general turndown in sales," says Mackay. "Business is tough and if you don't reinvent yourself you will run into trouble."Mackay believes the marketplace is in a state of instability at the moment, a factor that is not being helped by GST confusion. For companies who don't manage their stock and distribution levels carefully it may prove to be the straw that breaks the camel's back, he said.
"We're in the doldrums at the moment," says Bruce Lamb of Software Suppliers.
"It's hard to know which way the wind is going to start blowing".
Most distributors are not expecting the GST to have much impact, given they are used to sales tax. However, Max Walters, managing director of QV Software, suggests "if the bigger distributors absorb the price increases it will make it very difficult for the smaller guys to compete".
Asked if the rising body count of companies like Dataflow was making him nervous, Lamb replied: "I see this as a natural evolutionary process. When it comes to distribution on that level, big is beautiful - it is important to shift big volume.
"We sow seeds in different areas to Dataflow so its demise doesn't have that much significance for us," Lamb. "The markets move so much quicker now. What were once considered solid foundations can disappear."
