Market dip dents GAME

GAME has reported an expected year-on-year drop in sales and revenue in its half-year financials.

For the 26 weeks ending July 31st, revenue was down 9.6 per cent to 624.6m compared to 690.8m the year previously, with like for like sales down 10 per cent.

That’s in line with the UK games market’s downward year-on-year trend, which we reported last week was predicted to come in at nine per cent smaller than 2009.

Splitting GAME’s results out by region makes that even clearer: in the UK and Ireland, total sales were down by 17.8 per cent and like for like sales were down by 16.2 per cent.

In GAME’s International operations, total sales were up by 4.0 per cent while sales fell by 3.1 per cent.

GAME’s Online operations outperformed the rest of its business on a like for like basis and sales increased by 2.0%.

But GAME remains confident. It says the traditional Christmas games boom will see it through to the new year, and will maintain a close watch over costs – with plans to shave down its store count in the UK further and restructure its French and Australian chains.

In a statement to shareholders, group chairman Peter Lewis said: "Against the backdrop of a very challenging marketplace and an uncertain economy, we have increased market share in all of our territories since January and maintained our leading position in Europe.

"As expected, we have returned to our traditional seasonal trading profile with losses reported in the first half and all profits being made in the second half.

"The Group made a loss before tax and non-recurring costs of 18.8m in the first half of the year, compared to a profit before tax and non-recurring costs of 14.5m in the previous half year.

"This profile reflects the performance of the wider market. In the UK, market revenues were down by 17.1%1 and we have seen similar trends in other territories. This has largely been driven by revenue declines from Nintendo products, which enjoyed explosive growth in 2008 and 2009.

"We have continued to take decisive action to remain operationally efficient, through store and headcount rationalisation, and by creating a truly multi channel offer through astute investment. In our under-performing international markets of France and Australia, we have made changes to local management teams, property portfolios and our commercial profile.

"As a result, we are well positioned to benefit from the imminent launch of new motion sensing technology and the extensive range of Christmas software releases. An ongoing focus on the management of our operating costs and development of our customer proposition will ensure we continue to be successful when the market returns to growth."