Game has racked up full-year losses as the retailer battled with a ‘volatile’ UK gaming market and invested in its fledgling events and esports business.
Game made a statutory pre-tax loss of £10m in the full-year to July 29, compared with a pre-tax profit of £1.1m the previous year.
In its core retail business, EBITDA slumped 51% to £14m, while group EBITDA tumbled 69% to £8m.
It said its UK retail performance was impacted by a challenging market – particularly in the first half, with a weaker line-up of new game launches compared with the prior year and under performance of a key new release.
Game’s group gross transaction value (GTV) totalled £891m – down 2.4% year-on-year – but rose 6.6% in its second half.
Losses widened at its new events, esports and digital business to £6m, reflecting, it said, investments to support future growth.
GTV from these activities jumped 116% to £13.2m.
The retailer currently has 18 Belong-branded in-store gaming arenas, which Game chief executive Martyn Gibbs said are delivering “encouraging results” across pay-to-play gaming and confectionery sales.
Gibbs said: “We have reviewed our operations and are now accelerating development plans as we seek to fully capitalise on the strong growth potential in the growing esports market.”
Game now hopes to have 35 arenas open by the end of its current financial year.
Solid strategic progress
Gibbs claimed that although Game’s markets “remained volatile”, the business made “solid strategic progress” as it focused on the elements within its control – delivering on its strategy and creating a new cost base for its UK retail business.
The retailer, which recently launched a concession partnership with Maplin, hailed a positive performance in Spain, where it said GTV rose 22.5% and EBITDA increased 10.9%.
It continued its efforts to diversify its retail business, reporting 23.8% GTV growth in its digital and non-console categories to £236.8m, and also achieved £11m in operational efficiencies in the UK.
Game said that trading in the first 15 weeks of the year has been “ahead of group plans”, with retail GTV up 5.4%.
It put this down to strong sales of the Nintendo Switch now there is more regular stock available, the recent launch of Xbox One and stronger performing new game releases.
It said it is therefore “comfortable” with its strategic initiatives moving forward and the group’s future prospects.
Earlier this year, Game issued a profit warning as a result of sluggish UK demand. Soon after, Mike Ashley’s Sports Direct snapped up a 25% stake in the struggling firm.
Read more: What Game is Sports Direct playing?