Sales continue to decline at GAME

Modern Warfare 2 and hardware price cuts can't stop 14% sales slide; supermarket competition also blamed

The UK's largest specialist retailer GAME has continued to see sales decline in 2009, with a 13.9 per cent drop for the entire group in the last 18 weeks to December 5.

Despite hits titles such as Activision's Call of Duty: Modern Warfare 2 and FIFA 10, and price cuts on the Xbox 360 and PlayStation 3, the UK and Ireland business dropped 16.6 per cent in like-for-like sales, with the International business down 6.7 per cent.

For the 44 weeks to December 5, total group sales are now down 15.1 per cent compared to the same period last year, UK and Ireland sales fell 16.6 per cent and International sales slipped 11.5 per cent.

"Recent console price cuts from Sony and Microsoft  have increased demand, though revenues from increased unit sales of these formats have not offset the overall fall in hardware revenues," explained Peter Lewis, chairman of GAME.

"Since the half year, there have been a number of major software releases including Call of Duty: Modern Warfare 2 and FIFA 10, which both broke records in their first week of launch.  However, the exceptionally strong performance of these titles was in part offset by softer than expected sales of some other releases."

The company also singled out increased competition from UK supermarkets as a factor in falling sales.

GAME said that it continues to invest in online sales, with now over 700 PC games available to download from its digital delivery service, and it has also launched another three consumer websites in Europe.

The company noted that the next eight weeks through the Christmas period usually account for 25 per cent of annual turnover, and it expects to take advantage of an installed base of 27.2 million third generation consoles in the UK. January also looks strong, said the Lewis, with titles such as Mass Effect 2 from EA and Sega's Vancouver 2010.

"Consequently, while the wider economic conditions and prevailing videogames 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," added Lewis.

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Latest comments (2)

Glenn White , Qube Media12 years ago
It is not too surprising when Game are so much more expensive than the online competition. Even second hand products you can usually find them cheaper brand new online! You also get higher value on trade ins online via ebay etc.

While their customer service is alright I have been in the store plenty of times and overheard staff giving wrong information to customers. Im not sure what Game have to do to get back on top, but pricing second hand goods lower and turning the store into more of an experience is a start.
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Jas Purewal Partner, Purewal & Partners12 years ago
These days, I quite like Game and tend to buy my games from them online because:

(i) they have adapted their online sales practice to match Amazon, Play et al: they offer competitive prices as well as free delivery.

(ii) they are the only games retailer to offer a loyalty points system across all platforms, which translates to direct savings on games.

(iii) they are increasing their presence in the second hand market - there was a report on not so long ago that this comprises a quarter of their revenues already.

I agree that Game has a problem with its stores and its retail pricing, but who doesn't? A really radical alternative would be for Game to shift to digital downloads at their online prices - I wonder if that could give Valve et al a run for its money in the UK?
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