Sales decline slows at Game group

Sales decline slows at Game group

Computer games retailer Game today said the decline in its sales had slowed following a number of blockbuster software releases.

The English firm, which has 701 stores in the UK and Ireland, said 'Call of Duty: Modern Warfare 2' and 'FIFA 10' broke records in their first week of launch.

Like-for-like sales in the 18 weeks to December 5 were down 13.9%, as the titles helped offset softer than expected sales of some other releases. The sales figure had been down by 16.3% in the six months to July 31.

Like-for-like sales were down by 15.1% in the 44 weeks to December 5.

Recent price cuts for Sony PlayStation 3 and Microsoft Xbox 360 Elite have increased demand, the company said, but it added that increased sales of these consoles have not offset the “overall fall in hardware revenues”.

Game said it has outperformed the wider computer games console market by offering exclusive bundles, including the Call of Duty: Modern Warfare 2 Xbox 360 250GB pack, which was only available in the UK from Game. The sale of second-hand games and consoles has continued to perform well.

The company reported strong competition in all of the markets it operates in, amid significant pricing activity from the supermarkets.

Its market share has improved in the year to the current date due to a range of promotions, including customers being able to trade in old games and consoles for discounts on new ones and loyalty card initiatives.

The group has opened 43 new stores since the half year and closed five.

Investment in the online business is continuing and the group has launched three new consumer websites in Europe, taking the total to 10. Game boasts that it is the only UK entertainment retailer to offer a download service for pc games, with nearly 700 games available.

The next eight weeks historically account for 25% of the group’s annual turnover, and the group has said it is on track for its biggest ever Christmas campaign.

The group is looking forward to strong software releases from January 2010, including Vancouver 2010 from Sega and Mass Effect 2 from EA.

Mark Photiades, an analyst with Singer, said: “Today’s data implies that trading over the most recent 11 weeks has improved, but only marginally. This is clearly slightly worse than we had assumed.

“This year in particular Game will be looking to pick up at least its fair share of Woolworths and Zavvi’s video game business.”

Shares in Game have fallen by 16% since the half-year results in September, Mr Photiades added.

The stock dropped another 9% following today’s figures.

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