Game prepared to enter streaming games arena

While Game insisted Onlive does not pose an immediate threat, as it has yet to reach beta-testing phase in the US, it said it will “keep close to what happens”.

Chief executive Lisa Morgan said: “We will act according to the needs of our customers.”

Onlive allows players to stream high-quality on-demand games onto any Intel-based Mac or PC running XP or Vista. Games do not have to be downloaded and no specific console hardware is needed. It plans to launch fully in the US at the end of the year.

Analyst KBC Peel Hunt said that Onlive represented a “material threat” to games retailers.

But Morgan pointed out that Game has been digitally distributing PC games on its website for two years. She said this is “still a tiny part of our operation but it’s important to participate”.

She added that Game has seen a “significant impact” in terms of online sales. “We’re punching our weight in the e-commerce space alongside Amazon and Play.com,” she said.

Game has almost finalised the closure of its York Gamestation head office and its merger into Game’s Basingstoke head office. It said about 25 employees will make the move, while about 50 members of staff based in York have left the business.