Grainger Games says it is facing 'significant operating challenges' after having its supplier credit limits cut.
The independent retail chain, which has almost 70 stores primarily in the North of the UK, reported a £1.3 million loss last year.
However, the firm has been forced to speak to a number of parties regarding the future of its business as investors get spooked following the collapse of numerous High Street retailers, including Toys R Us and Maplins.
The company has had to inform some consumers that their pre-orders for titles, such as Ubisoft's Far Cry 5, has been cancelled.
"Our trading has been strong in the period through Christmas with significant improvement against the previous year," Grainger Games CEO Stephen Bowyer told Chronicle Live.
"In January 2018 we secured long working capital facilities bucking the market trend to support our successful diversification strategy. However, confidence in UK high street retail has been at an all-time low which has been further impacted by recent retailer failures.
"On the back of this, we have very recently been notified that Grainger has had or will have certain supplier credit limits cut or removed. This has come as shock to us all and presents a significant operating challenge driven by factors outside our control.
"Grainger has a strong brand across the North of England with a well known value proposition and diverse marketing offering. We are working tirelessly with our advisers to explore all options and are in dialogue with a number of interested parties regarding the future of the business."
Grainger Games - named after the Newcastle Grainger market where it began life - has been operating for over 20 years. It employs around 400 staff.