Game profits drops while customers hunt for bargains

Game Group today posted a 67% drop in first half profits but said trading had returned to more “normal” levels after last year’s record-breaking software launches.

The UK-based firm, which generates most of its profits in the second half of the year, had a bumper period in 2008 with the release of Mario Kart, Wii Fit and Grand Theft Auto IV.

Game today posted pre-tax profits of £10.8m (€11.9m) for the six months to July 31, down from £32.8m (€36.2m) in the same period last year, while like-for-like sales fell 16.3%.

Chairman Peter Lewis said the firm had out-performed the market, helped by the growth of its second-hand games business – with sales up 12.3% – as consumers seek out value in the recession.

Recent manufacturer price reductions on the Microsoft Xbox 360 Elite and Sony’s new model Playstation 3 were also said to be “helping to stimulate the market for hardware”.

“Whilst we recognise that we are operating in a challenging wider economic environment, the sales performance of the limited number of AAA new software releases in the first half gives us continued confidence in customer demand for video game products,” he said.