GAME Group's sales have fallen 10.8 per cent for the 44 weeks to December 5th – despite strong sales of FIFA and Modern Warfare 2.
Like-for-like sales were for the same period were down 15.1 per cent, while total UK sales were down 14.3 per cent.
Meanwhile, for the 18 weeks to December 5th total Group sales were down 11.3 per cent, and UK and Ireland sales were down 15.3 per cent.
The firm's chairman Peter Lewis has highlighted poor software sales and supermarket price cutting for the drop.
"Since the half year, there have been a number of major software releases including Call of Duty: Modern Warfare 2 and FIFA 10, which both broke records in their first week of launch," said Lewis in a statement.
"However, the exceptionally strong performance of these titles was in part offset by softer than expected sales of some other releases.
"We have seen strong competition in all of the markets that we operate in. In the UK, in particular, we have seen significant pricing activity from the supermarkets. However, our overall year to date market share position has improved due to the strength of our consumer proposition, including our trade-in offers, loyalty card discounts, breadth of range and specialist staff.
"Our preowned business has continued to perform well as it offers real value for our customers, particularly in the current economic climate."
Despite the fall, GAME has opened 43 stores since the half year, and expects a solid Christmas performance. The retailer is also looking ahead to January, with key releases Vancouver 2010 and Mass Effect 2 due that month.
"Over the longer term, we believe the video games market will continue to trend towards higher margin software and peripherals," continued Lewis.
"GAME is well placed to benefit, as increased choice and technical innovation encourages customers to visit the specialist. As the market leader, we will continue to build our multi-channel proposition and preowned-led value offer to best serve our customers’ demands."