The Competition Commission has provisionally cleared Game’s acquisition of Gamestation, saying the merger is not expected to substantially lessen competition in the market.

The deal brings together the UK’s two largest specialist retailers of new and second-hand video games, consoles and related products. However, the main Commission issue was the trade-in or second-hand side of the business.

Competition Commission inquiry chairman Diane Coyle said: “This is a finely balanced verdict, but our provisional conclusion is that we do not believe this acquisition would give the merged company the opportunity to significantly raise prices or reduce service for new or pre-owned products, or to cut trade-in prices paid to customers.”

The inquiry found there are fewer alternative retailers engaged in trade-ins and second-hand sales. However, several competitors are expanding rapidly and customers are increasingly making use of alternative retail channels.

It also found that competition for new gaming products effectively sets a cap on prices for second-hand products, because customers could easily switch to new products sold elsewhere, were the merged company to increase prices of second-hand products.

Game welcomed today's announcement and said it will continue to work closely with the Competition Commission through to its final decision, which is expected no later than January 23. The retailer will issue an interim management statement on December 11.