GAME shares plummet after winning trading statement

GAME Group’s shares have slumped by 14 per cent today, following its stunning trading statement this morning.

Analysts have suggested that demand for the industry has peaked in the wake of the results.

According to Reuters, Game shares, which had outperformed the UK general retailers index by about 85 percent this year, fell as much as 14 percent to a three month low of 225 pence.

"A stunning trading update," said Shore Capital analyst John Stevenson, raising his full-year profit forecast by almost a quarter to 139.5 million pounds ($277 million).

"(But) unless we see new hardware launches into the UK market over the next two years, which appears unlikely at present, then we believe profits will peak this year and fall consistently over the following three years," he said, keeping a "sell" rating on the stock.

GAME Group CEO Lisa Morgan said the games market was "absolutely not" at a peak.

"The point to make is that we haven't seen any new console releases in the first half and we were up against the launch of Playstation 3 last year," she told reporters.

Morgan said that, unlike previous games cycles which have been driven mainly by one major console in Playstation, ‘demand was now fuelled by a number of consoles, and that new games were appealing to bigger audiences.

"What you're seeing now is that as the installed base (of consoles) grows there's a fantastic momentum for a whole host of software titles," she said, tipping sequels for Fifa and Need for Speed games as big sellers in the run up to Christmas.

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Tags: GAME , game group , lisa morgan

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