Game Digital has massive profit warning

“Trading conditions in the United Kingdom video games market have been challenging”, explained GAME boss Martyn Gibbs.

The games seller said that their half-year adjusted earnings will be around £30m, which is down from the £43m last year, and £51.3m the year before that.

Shares in Game Digital, which floated in June previous year, plunged more than 40% at one stage after the profit warning.

Three years ago, Game went into administration with 277 stores closed in the United Kingdom and Ireland.

Game said there had been a faster-than-expected decline in sales of older games formats, while the switch to the newer Xbox One and PlayStation 4 consoles had been slower than expected.

Game Digital posted a 13.5 percent fall in video games sales in the United Kingdom market for the 21-week period ended December 19. United Kingdom sales of consoles were down 28.3%.

GAME says it is disappointed by its sales performance during the crucial holiday season.

However, US retailer GameStop recently said that sales of some of the biggest triple-A games of the year-Halo 5, Star Wars Battlefront, and Assassin’s Creed Syndicate-have underperformed. Does that mean Sony’s PlayStation 4 and Microsoft’s Xbox One have proved a disappointment?

Not the sort of thing you’d like to become a habit, but unfortunately it’s just issued another one after disappointing sales at the start of the festive trading period.

Demand for new consoles hasn’t been enough to offset what has been “an unexpectedly steep decline” in games for older models.

He added that “the extent of the impact of this switchover has only become apparent in December which has been compounded by lower year-on year-high street and shopping centre footfall”. While most of those are small and medium-sized firms, Game’s latest profit warning shows the outlook isn’t smooth sailing for bigger players either.

Game said overall sales by gross transaction value dropped 11.4% in the United Kingdom over the 12- week period, despite strong Black Friday trading.