The UK games industry took a collective sharp intake of breath this morning, upon hearing the news that leading specialist retailer Game Group reported a whopping 80% plunge in annual profits – down to £5.4m, from £29m in 2005.
Whilst a drop in profits was of course expected in this ‘transitional’ year, this is still quite a major hit for Game. The retailer reasoned that the substantial drop off was mostly due to falling software prices on current generation formats.
"This was an immensely difficult transitional year and it is disappointing to report such a sharp drop in profits," said chairman Peter Lewis.
MCV reports that Game's share price dropped on the announcement this morning, plus that chief executive Martin Long refused to comment on whether the company had received any further buy-out offers.
The company issued a statement to say that sales have now begun to pick up, following the release of the PSP and Xbox 360 and that UK like-for-like sales were up 2.7% in the 12 weeks to 22 April.
Sales are expected to continue to pick up throughout the year, with the impending release of the Nintendo Revolution (to be announced, SPOnG hopes, at E3 next month) and of Sony’s PlayStation 3 in November.
Whilst a drop in profits was of course expected in this ‘transitional’ year, this is still quite a major hit for Game. The retailer reasoned that the substantial drop off was mostly due to falling software prices on current generation formats.
"This was an immensely difficult transitional year and it is disappointing to report such a sharp drop in profits," said chairman Peter Lewis.
MCV reports that Game's share price dropped on the announcement this morning, plus that chief executive Martin Long refused to comment on whether the company had received any further buy-out offers.
The company issued a statement to say that sales have now begun to pick up, following the release of the PSP and Xbox 360 and that UK like-for-like sales were up 2.7% in the 12 weeks to 22 April.
Sales are expected to continue to pick up throughout the year, with the impending release of the Nintendo Revolution (to be announced, SPOnG hopes, at E3 next month) and of Sony’s PlayStation 3 in November.
Companies:
Game
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Comments
Joji 26 Apr 2006 02:51
1/3
Might also have something to do with us buying online on ebay and their pre-owned bins.
Hey, maybe Gamestation will eat them up.
Hey, maybe Gamestation will eat them up.
SPInGSPOnG 26 Apr 2006 05:28
2/3
The really scary thing fro GAME, and GameStation, and HMV and Virgiin, has to be the fact that Sony, Microsoft, Paramount, Fox et all plan to make them all TOTALLY redundant.
All of the platform holders and major studios want people to download content directly from them, cutting out the need for both distributor and retail... More profits for big evil corporations... massive job losses for entertainment retailers. GAME has 10 years, tops, to exist in its current form. It will have to change massively to survive.
All of the platform holders and major studios want people to download content directly from them, cutting out the need for both distributor and retail... More profits for big evil corporations... massive job losses for entertainment retailers. GAME has 10 years, tops, to exist in its current form. It will have to change massively to survive.
majin dboy 26 Apr 2006 09:04
3/3
will be nice to see how this devolps.
i dont mind GAME,its the kind of casual gamers paradise. Its no secret u can get 90%(if not 100%) of their stock somewhere else for cheaper.however,they are convienent as its much easier and faster to hand cash over the counter rather than go searching on the internet and using credit/debit cards and then waiting for delivery.
i dont mind GAME,its the kind of casual gamers paradise. Its no secret u can get 90%(if not 100%) of their stock somewhere else for cheaper.however,they are convienent as its much easier and faster to hand cash over the counter rather than go searching on the internet and using credit/debit cards and then waiting for delivery.