The problem, according to the company, is thanks to trends in the video game market – gamers have upgraded to nextgen consoles quicker than expected, and aren’t buying as many games in the process.
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He said ” Star Wars ” profits won’t offset larger troubles Disney faces from shrinking subscribers at the ESPN sports network. Disney’s billion purchase of Lucasfilm nearly looks like a bargain now.
At the heart of the problem is the fact that United Kingdom consumers are finally dropping their PS3 and Xbox 360 consoles, resulting in much lower demand for older games.
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He added that “the extent of the impact of this switchover has only become apparent in December which has been compounded by lower year-on year-high street and shopping centre footfall”.
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It may seem unusual to give a profits warning immediately before the busiest two trading days of the year, but no matter how good last minute sales on the High Street are the damage is done.
Game digital reported adjusted core earnings of 43 million pounds previous year.
A better performance in Spain, where sales rose 8.1%, helped limit the overall drop in total group sales to 6.7%.
GAME also notes that sales in the wider video game market are down 13.5%.
Not the sort of thing you’d like to become a habit, but unfortunately it’s just issued another one after disappointing sales at the start of the festive trading period.
“UK sales have fallen off sharply in the past few weeks at the most critical time of year for GAME”, said Liberum analyst Tom Gadsby.
But Mr Gibbs said that GAME Retail UK has recruited a significant numbers of new customers through sales of hardware and content.
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Game shelled out £20m for gaming event business Multiplay earlier in 2015. The UK and Gross Transaction Value was down by 11.4% at £353.5 million ($525.2 million). Game then ended up being funded by Elliott Advisors which floated the video game chain at £340 million ($505.2 million) in June 2014. Despite assurances from the group that it is still hoping for a stronger second half of its financial year, with sales of software for Xbox One and PlayStation 4 expected to pick up, helped as well by sales of second-hand mobile phones and tablets. Over 270 stores were closed and 2,104 employees made redundant before the group was bought out of administration by private equity firm OpCapita.
