Game Digital share price plummets, warning Nintendo Switch supply problems will hit profits

 
Oliver Gill
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Game Digital revealed it is struggling to get its hands on enough Nintendo Switch consoles (Source: Getty)

Shares in Game Digital were in freefall this morning after it revealed earnings would be "substantially below previous expectations".

The beleaguered retailer, which had banked on a successful roll-out of the popular Nintendo Switch console said "the level of supply to the UK market has been lower than expected".

It added: "These lower levels, combined with the continued softness in our core Xbox and PlayStation markets, have impacted sales."

Read more: Game Digital shares jump despite sluggish six months

Shares are down over 27 per cent, with around £10m wiped off the firm's market cap in a matter of minutes.

Game Digital operates in the UK and Spain. While the Spanish business is continuing to "trade strongly" and in line with expectations, Britain is a "challenging trading environment", the company said.

The firm added in a statement:

We also stated that we anticipated an overall positive sales performance in the second half of the year, underpinned by the successful launch and continued consumer demand for the Nintendo Switch console, as well as further progress across our other UK sales initiatives, although this positive momentum would be highly dependent on stock availability of Nintendo Switch.

Game Digital re-listed on the London Stock Exchange in June 2014. The move capped a dramatic turnaround in fortunes for the firm that fell into administration just over two years earlier.

The firm went to the wall in March 2012 after suppliers, including Nintendo, refused to supply the firm after credit insurers "pulled cover" – where firms refused provide insurance against Game Digital not paying any debts owed to suppliers.

Read more: Game Digital laments "tough" UK market

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