Continued declining sales and a likely interim loss at computer entertainment specialist Game prompted downgrades by analysts.

The retailer, which last week named Ian Shepherd as new chief executive, revealed that group like-for-like sales slumped 12.3% in the 19 weeks to June 12.

Total sales for the period fell 11.4%.

In the UK and Ireland, like-for-like sales dropped 17.2% and total sales declined 18.5%. At Game’s international business like-for-likes slid 4.6%, but revenue edged up 1.2%. Online sales jumped 13.5%.

The retailer said it had “continued to outperform the market”, but expects full-year gross margins to decline by about 100 basis points because of the “strengthened value proposition in stores”. Game expects to report a loss in the first half and profits in the second.

New technology releases revealed at a Los Angeles trade show last week are expected to boost sales, but not until next year.

The retailer said: “Consequently, although we expect to outperform the market, we anticipate negative full-year like-for-likes.”

KBC Peel Hunt analyst John Stevenson labelled the trading update “poor” but pointed out the performance was an improvement from the first 11 weeks, when like-for-likes slumped 20.1%, and said it was “marginally better than we had feared”. Stevenson cut his full-year profit expectations for 2011 from £60.4m to £50m. “Game is clearly suffering from a lack of key product,” he said.

Singer analyst Matthew McEachran said: “Concerns over the medium term are unchanged.”