Game Group profits tumble as new releases fail to impress consumers

VIDEO games retailer Game Group yesterday posted a 60 per cent slump in first-half profit and said sales were continuing to fall.<br /><br />The group said profits had crashed to &pound;10.8m in the six months to 31 July, from &pound;32.5m in the same period last year. The company had told shareholders to expect profits between &pound;13m and &pound;16m in the period.<br /><br />Game, which trades from 1,368 outlets in nine European countries and Australia, said that sales had been hurt by a downturn in consumer spending and a weak games release schedule. <br /><br />Last year&rsquo;s release schedule was exceptionally strong, with hit titles like Wii Fit and Guitar Hero, meaning current sales are being benchmarked against tough comparatives. <br /><br />First-half sales fell seven per cent, while sales at stores open at least a year were down 16.3 per cent. Nor do sales show any immediate sign of improvement, falling 16.6 per cent in the 33 weeks to 19 September. <br /><br />But Game said it was optimistic about the Christmas period despite the tough retail environment. <br /><br />It said recent price cuts for the Microsoft Xbox Elite and the new version of the Sony Playstation 3 would stimulate the hardware market and drive software sales. It also said there were strong game and accessory releases on the horizon. <br /><br />Pali International analyst Nick Bubb said: &ldquo;We felt nervous about Game ahead of today&rsquo;s interims, given the continuing weakness in the UK software market, but management put up a good case for the defence. Christmas prospects are looking reasonably solid at this stage.&rdquo;