Retailer states that sales of consoles and video games have been worse than expected.
Shares in high street retailer Game have slumped this morning, after it said that gamers had failed to buy enough games for new consoles to make up for a steep fall in demand for older formats.
This meant that UK sales for the 21 weeks to December 19 fell 11.4% to £353.4 million.
As a result, margins were squeezed and earnings before interest, tax and other items for the six months to January 23 will fall by about 30% to £30 million, the retailer said in an unscheduled trading update.
Sales in the wider video game market are down 13.5%.
Game’s shares dropped by as much as 40% following the news. The shares floated in June 2014 at 200p and are down over 60% this year.
Sales of games for the Xbox One and PlayStation 4 consoles rose by 20%, or £19m, but sales of products for the old Xbox 360 and PlayStation 3 dropped by 57%, or £31m.
Martyn Gibbs, Game’s chief executive, said: “The trading conditions in the UK video games market have been challenging. The switch over from the older gaming formats to PlayStation 4 and Xbox One software has impacted profitability across the UK market. The extent of the impact of this switchover has only become apparent in December which has been compounded by lower year-on-year high street and shopping centre footfall.”
