The computer games specialist disclosed full-year earnings could be as low as£3 million, but held out hope that£13 million may still be achieved. Game said that since its last trading update in September, an expected uplift in like-for-like sales had not materialised.
In the 17 weeks to November 26 comparable sales were down 5.9 per cent in the UK and Ireland and 5.5 per cent at group level. In the 43 weeks to the same date, the falls were 7.1 per cent and 5.5 per cent respectively.
The poor performance was blamed on 'significant price deflation on hardware and software', coupled with tough trading conditions. Margins are expected to be down by about 300 basis points.
Although there has been exceptional demand for the Sony PSP hand-held games console, supplies have been 'behind plan and intermittent'. Availability of the Xbox 360, to be launched on Friday, is likely to be 'extremely limited'.
Numis analyst Steve Davies fears Game's warning will not be the last from a retailer ahead of Christmas. However, he believes that the 'astonishing breadth' of the profit forecast range indicates 'there is still a huge amount to play for in December and January'.