Games grow at HMV despite fewer releases

As part of its trading statement today HMV has offered further details on the success of its games category – reporting continued successes in areas like pre-owned in the face of a lighter release schedule.

Amongst its HMV UK & Ireland stores, the chain’s technology and related entertainment products grew to account for 9 per cent of sales (2008: 7%) – while in games specifically the firm said it increased market share "in a weak market" thanks to its second-hand games offer Re/Play.

Re/Play has "reinforced the appeal of our overall games proposition" the firm said.

However, given the fewer number of big releases in the latter half of the year – Modern Warfare 2 notwithstanding as HMV’s trading report is for the 26 weeks up to October 24th – the games category at HMV has seen a 32 per cent like-for-like decline. Nevertheless, HMV managed to grow its share by 2.2 per cent – again thanks to the Re/Play offer, the firm said.

Games also had an impact on the reduction of the firm’s operating lossees, which were down 6m on the prior period. The firm said: "Gross margin was also up 40 basis points reflecting the lower mix of games sales, particularly hardware. The gross margin for the second half of the year is expected to remain broadly in line with the prior period as the games release schedule improves."

The quieter release schedule was also singled out as a contributing factor to HMV Internationaltotal sales falling 10.6 per cent. The firm cited "challenging trading in Canada, Hong Kong and Singapore, combined with the impact of a weak games release schedule" for this.

But across its wider business HMV has also moved to diversify its product offering – and games have contributed to its pursuit of new business channels too.

Specifically, the firm said: "Our pay-to-play gaming centres located in selected HMV stores are in their own right a profitable use of space, and also provide good uplifts in sales of games hardware and software. New locations were successfully opened during the period at Manchester and Reading, taking the current total to five."

Click here to read our story on the topline details of HMV’s trading report