Pre-owned sales could account for close to a third of GAME’s revenue in 12 months’ time – as the firm looks forward to another year of double-digit growth for its trade-in business.
In alarming news for publishers, pre-owned generated 25.7 per cent of the firm’s revenues in a tough H1 2009 – up 12.3 per cent year-on-year.
GAME CEO Lisa Morgan told MCV this week that GAME enjoys “significantly better margins” from pre-owned sales than from new games.
Last Wednesday, the GAME Group posted a 60 per cent year-on-year drop in profits for the six months to July 31st.
New income for the period fell from £35.5 million to £14.5 million.
The company said the fall was in line with company expectations, following a record year in 2008. Overall sales dipped seven per cent, down to £690.8 million.
Despite the downward trend, pre-owned sales leapt to £177 million in the period – representing impressive growth on the £157.8 million taken in H1 2008.
Morgan said she hoped to see similar growth next year. When asked if GAME expected another 12 per cent rise in pre-owned sales in H1 2010, she added: “I can’t give guidance, but we would suggest you’ll continue to see the same kind of trend. Pre-owned makes significantly better margins than new.”
Morgan added that GAME expected pre-owned’s impact on sales to “soften” during Q4, but admitted that the retailer would never deliberately limit trade-ins to please publishers.
“It’s not up to us to restrict the way in which our customers buy,” she added.
For the full year ended January 31st, 2009, pre-owned revenues made up 18 per cent of GAME Group’s overall sales, up to £353 million from the previous year’s £257 million.