Shares in Game, which trades from about 1,270 stores in nine European markets and Australia, employing 10,000, crashed 71 percent on Monday after the firm told investors: It is uncertain whether any of the solutions currently being explored by the board will be successful or will result in any value being attributed to the shares of the company.
Over the last two weeks loss-making Game has had to tell its customers to shop elsewhere for new releases, such as Electronic Arts' (EA.O) Mass Effect 3 and Capcom's (9697.T) Asura's Wrath and Street Fighter X Tekken, after failing to agree terms with the suppliers.
The firm said it remained in talks with suppliers and lenders in relation to terms of trade that would allow the business to operate within the banking facility agreed last month with lenders led by state-backed Royal Bank of Scotland (RBS.L).
Game is also seeking alternative sources of funding and reviewing the position of all of its assets in the UK and international territories.
The firm, which faces intense competition from internet players and supermarkets, who often sell new blockbuster titles as loss leaders, is up against it as it must pay a quarterly rent bill in two weeks time. Failure to meet that could result in administration.
Shares in Game, which prior to Monday had lost 94 percent of their value over the last year, were down 2.5 pence at 1 pence at 0917 GMT, valuing the business at just 3.4 million pounds ($5.3 million).
The firm has been closing stores and moving into digital gaming, aiming to avoid the fate of other struggling specialist retailers, such as music and films group HMV (HMV.L).
Game may look to U.S. rival Gamestop (GME.N), long seen as an obvious suitor, for a rescue deal. However, analysts doubted if any serious bidders would emerge ahead of an administration.
We suspect that any potential suitor would prefer to wait for a formal administration process. Through a pre-pack the suitor would have much greater flexibility around store liabilities, said Singer Capital Markets analyst Mark Photiades.
He advised investors to sell now rather than face losing out to a potential administration. ($1 = 0.6372 British pounds)