Game takes a hit as sales slip 14% in the quarter


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Computer games retailer Game posted an improving third quarter sales trend, with popular software launches such as Call of Duty: Modern Warfare 2 partially offsetting continuing falls in hardware sales.

'While the wider economic conditions and prevailing video games market trends lead us to approach the critical Christmas period cautiously, the board believes the group is well positioned to deliver a solid outturn for the year,' the firm said.

Game, which trades from over 1,350 stores, concessions and franchises in nine European countries and Australia, said sales at stores open at least a year fell 14 per cent in the 18 weeks to December 5.

New Super Mario Bros Wii

Christmas releases such as Call of Duty: Modern Warfare 2 and New Super Mario Bros Wii (pictured) have helped


That compares a fall of 16.6 per cent in the 33 weeks to September 19 when comparative numbers were much tougher.

Game said recent console manufacturer price cuts on the Microsoft  Xbox 360 Elite and Sony's Playstation 3 increased demand, though revenues from increased unit sales of these formats did not offset the overall fall in hardware revenue.

It said although software releases Call of Duty and FIFA 10 broke sales records other releases saw softer than expected sales, noting 'significant pricing activity' from the supermarkets.

Game reiterated that it expects year to end-Jan. 2010 gross margin to increase 170 to 220 basis points, reflecting higher margin software and accessory sales being a larger part of the total sales mix and higher sales of pre-owned items.

Prior to Tuesday's update analysts were, on average, forecasting a year to end-January. 2010 underlying pretax profit of £109million, according to Thomson Reuters down from £126.2million in the previous year.

Shares in Game have lost 17 per cent of their value over the last three months, underperforming the general retailers index by 25 per cent.

The stock closed Monday at 144.6 pence, valuing the business at £501million.

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