Game Group profits tumble as new releases fail to impress consumers
VIDEO games retailer Game Group yesterday posted a 60 per cent slump in first-half profit and said sales were continuing to fall.
The group said profits had crashed to £10.8m in the six months to 31 July, from £32.5m in the same period last year. The company had told shareholders to expect profits between £13m and £16m in the period.
Game, which trades from 1,368 outlets in nine European countries and Australia, said that sales had been hurt by a downturn in consumer spending and a weak games release schedule.
Last year’s release schedule was exceptionally strong, with hit titles like Wii Fit and Guitar Hero, meaning current sales are being benchmarked against tough comparatives.
First-half sales fell seven per cent, while sales at stores open at least a year were down 16.3 per cent. Nor do sales show any immediate sign of improvement, falling 16.6 per cent in the 33 weeks to 19 September.
But Game said it was optimistic about the Christmas period despite the tough retail environment.
It said recent price cuts for the Microsoft Xbox Elite and the new version of the Sony Playstation 3 would stimulate the hardware market and drive software sales. It also said there were strong game and accessory releases on the horizon.
Pali International analyst Nick Bubb said: “We felt nervous about Game ahead of today’s interims, given the continuing weakness in the UK software market, but management put up a good case for the defence. Christmas prospects are looking reasonably solid at this stage.”