GAME: Total group sales down ten percent
Retailer in trouble as major software release sales drop sharply after week one
The GAME Group released its latest financial interim statement today, showing a 8.6 per cent drop in like for like sales and a 10.6 per cent drop in total group sales over the 41 week period up to November 12, suggesting that the UK's high street retailers are still facing tough times.
All categories of product have seen revenue fall, and even major game releases are seeing a big drop off after the initial launch week, with catalogue sales dropping. Online sales remained stable, with market share holding at 19 per cent.
28 per cent of total sales are now coming from the second hand market, which operates at a 40 per cent margin.
Overall the UK video games market was reported as having fallen by 12.3 per cent during the period.
As well as revealing a £51 million loss for the 26 weeks to July 2011 earlier this year, the GAME Group has closed 37 stores this year, and hopes to see a 1 per cent increases in the number of gamers visiting its shops. It also launched the GAMEwallet in October.
"Major software titles are launching in line with first week expectations, but are then seeing a quicker tail-off than historically experienced."
GAME Group interim report
Unsurprisingly, CEO Ian Shepherd remained positive despite the disappointing results.
"The overall video games market remains very challenging, despite strong title launches, and our guidance today reflects the extraordinary economic times in which we are operating. GAME has outperformed the market, reinforcing our position as market leader, and I am hugely proud of our teams."
"They remain focussed on delivering our strategy, controlling costs and driving operational cashflow, and we remain well placed to benefit in the medium term both from the next console cycle and the growth in digital and social gaming."
The company is now projecting full year like for like revenues of -7 per cent, but operating costs that are £8 to £10 million lower than last year.
Results for the vital Christmas period will be available on January 11.