Game losses widen in first half

The performance was worse than expected, according to Singer analyst Matthew McEachran, who had forecast a loss of £41m.

Group turnover declined 10.5% to £558.8m. Gross profit margin declined from 26% to 24.3%.

Group like-for-likes dropped 9.9% “reflecting tough market conditions”. However, the games specialist said it grew market share in the period.

In the UK & Ireland like-for-likes slumped 10%. Group online sales were up 2.3%.

Current trade has worsened, with group like-for-likes falling 10.4% in the 34 weeks to September 24.

The retailer is planning for full year revenues to be down by -3% to 0%, which it said “will be a significant overperformance of the market as a whole”.

Game said sales suffered because there were “very few major software titles launched in the period”.

The store group revealed last week it had become the first retailer to secure a partnership with OnLive, the games on demand service.  The retailer will offer a subscription which it said “demonstrates our commitment to offering customers a wide range of ways to purchase and play video games”.

Game chief executive Ian Shepherd said:  “2011 has been a very tough year for the video games industry. A combination of a cyclical low point in the industry itself and unprecedented macro-economic conditions have led to significant market revenue declines.

“Game has increased market share in this difficult climate as we have focussed on delivering our strategy. Nonetheless, the impact of the wider market can be seen on our first half results.

“Like many other retailers, we believe that trading conditions will remain tough for the remainder of the year, and have set our plans accordingly. We are determined to again outperform a difficult market this Christmas, by using our unique specialist position to give customers the very best choice and value.

“For the future, we are investing for a different video games market, with new games consoles coming to market and customers exploring new ways of playing games, including digital; online; and cloud-based gaming. The Group, through its Dedicated to Gaming strategy initiatives, is taking a leading role in these developments in order to benefit from market recovery in the coming years.”