Game Digital revealed that its annual profits crashed more than 80 per cent as it battled against a “challenging UK console market”.
The retailer posted pre-tax profits of £4.9 million for the 53 weeks to the end of July, down from £25.8m the previous year, after seeing sales tumble.
It reported sales by gross transaction value down 5.2 per cent on a 42-week basis to £923.3m, but said it was seeing “significant early progress” from its turnaround plan, with trading in the first ten weeks since its year-end “in line with group plans”.
As part of its recovery, Game is pushing into new areas, such as e-sports and live gaming events. It launched a number of trials in the UK, including a “gaming arena” in two stores – with plans for at least another ten by the end of January. Game said it is planning “significant” investment in this area over the next three years.
The group is also looking to a boost from a strong line-up of products, including highly-anticipated new virtual reality (VR) system launches. Sony’s PlayStation VR headset went on sale in the UK today and Game said: “These developments will provide impetus to our markets and fresh opportunities to engage with both existing and new customers.”
Chief executive Martyn Gibbs added: “Market dynamics in the UK have undoubtedly been tough in the past year. The management team responded quickly to these new market conditions and have made significant progress with its action plan since January.”
Analysts at Liberum said: “The video games retail market declined 9 per cent in the year across its markets, so Game did well to limit its top-line decline to 5 per cent.”
They added that the retailer was “sensibly” investing into other growing areas, such as events, e-sports and digital sales.