- Sales fall 9.1% to £499m
- Pre-tax profit slides 26.7% to £16.5m
- Overall sales likely to be positive in second half
Computer games specialist Game has posted a slump in interim earnings after a difficult trading period.
The retailer expects tough conditions to persist but anticipates “an overall positive sales performance for the second half” when sales of the Nintendo Switch should help offset declines expected in Xbox and PlayStation.
Game reported that performance at its core UK retail business was impacted by ”a challenging market, with a weaker line-up of new game launches compared with the prior year and a softer performance of certain key titles”.
However the retailer achieved “strong” growth in new business areas such as digital content and virtual reality (VR) headsets.
Game’s events, esports and digital activities operations delivered sales growth of 120.5%.
Game chief executive Martyn Gibbs said: “We delivered a strong performance in digital and new VR technology, however our first half saw another tough period for console hardware and physical software sales in the UK, impacted by a weaker line-up of new games launches and the market-wide underperformance of certain key titles.
“Together, these dynamics resulted in a disappointing performance from our UK retail operations.
“However our Spanish operations and new business areas delivered further growth.”
He said that Game is prioritising “the necessary actions to respond to challenges, whilst positioning the business to capitalise on major future market opportunities” and that action was being taken on costs and to improve operational efficiencies as Game implements a strategy ”to reposition and transform the business”.
Current trading has been encouraging.
Gibbs said: ”We have been pleased with the positive trading performance delivered in the first few weeks of the second half.
”Although we expect industry-wide challenges in our core Xbox and PlayStation categories to continue, we anticipate the overall UK market to remain positive during the rest of 2017, underpinned by the successful launch and continued consumer demand for the Nintendo Switch, the planned launch of Xbox Project Scorpio and a stronger slate of new titles later in the year.”