Game's sales slump eases but warning of Tesco competition
COMPUTER games retailer Game Group said yesterday that the slump in sales had eased somewhat, but the company is now under pressure from non-traditional sellers, such as supermarkets.
The company, which employs some 6,500 people across nearly 700 Game and Gamestation stores in Ireland and the UK, said like-for-like sales for the 18 weeks to December 4 fell by 7.6pc.
That was an improvement on the 12.2pc decline recorded for the year to date.
Away from Ireland and the UK, Game faired slightly better, with the international business showing a 0.5pc rise in like-for-like sales.
Group chairman Peter Lewis said the company expected reduced margin this year in a market that remains "very competitive".
"In order to deliver the like-for-like performance and to maintain our market share, we have continued to pursue a value proposition. A consequence is that we now anticipate margins will be down by between 160 and 190 basis points on the prior year," he said.
Pure computer game stores such as Game are coming under pressure from the likes of Tesco and other retailers which have traditionally not been involved in gaming but are now pursuing an industry which is worth some $40bn in annual revenue globally. Tesco now takes in second hand games as well.
Looking into next year, Mr Lewis remained cautious despite being "encouraged" by an apparent stabilisation in sales declines.
"The ongoing weakness in the market performance of hardware and casual gamer products means that we are maintaining our cautious outlook for the remainder of the current financial year.
"Our most significant weeks are still ahead of us, historically representing over 25pc of our annual revenues," he said.
The company added that it expects Microsoft's 'Kinect', which acts as a motion sensor for gamers, to be a top seller at Christmas, driving sales of the Xbox 360 console, which has also benefited from record breaking sales of the 'Call of Duty: Black Ops' game.