Video game retailer in red

THE Irish arm of the world’s largest video game and entertainment software retailer, Gamestop, went into the red last year recording pre-tax losses of €3 million.

Documents just filed with the Companies Registration Office show that the Gamestop Group recorded the €3m pre-tax loss in the 12 months to the end of January 30 of this year after recording pre-tax profits of €2.86m the previous year.

The Dublin-based group has 55 outlets across the country and recently announced it was seeking to hire 125 part-time seasonal sales assistants in the run-up to Christmas.

The filings show that the US-owned Gamestop Group Ltd’s revenues last year dipped by 16% from €81.3m to €67.9m.

The accounts show that the group sustained an after-tax loss of €4.3m after paying tax of €1.2m.

According to the directors’ report “both the level of business and the year end financial position were considered satisfactory in the light of the current economic downturn and the life cycle stage of the current generation of computer consoles”.

The directors add that “the key business risks and uncertainties affecting the group are considered to be related to product availability and supply and the life cycle status of game formats”.

On the company’s future development, the directors state that “in 2010, the company plans to expand its product offering to the consumer beyond the exclusive sphere of gaming. Such new products will be complementary and will extend more value and choice to our customers”.

The Gamestop network of outlets’ revenues would have been boosted by sales of the gaming world’s bestsellers in 2009 such as Wii Fit, Wii Play, Resident Evil 5, Killzone 2 and Mario Kart Wii.

Along with the group sustaining a drop in revenues, a €1.1m rise in administrative expenses from €16.4m to €17.5m contributed to the group — which also operates a small number of stores in Britain — moving into the red.

The accounts show the group’s cost of sales fell from €59.3m to €51.2m.