Game on as hits push sales up

Published on Thursday 3 July 2008 21:50

VIDEO games retailer Game fell victim to a stock market sell-off yesterday despite hit releases pushing the firm ahead of expectations so far this year.

The firm's shares fell as much as 12 per cent, before closing 4.6 per cent lower, as some analysts voiced fears that Game could face tougher competition in a more challenging environment for retailers.

Game – buoyed by the launch of Nintendo's Wii Fit and Grand Theft Auto IV – has so far evaded the misery elsewhere on the high street. Its shares have risen about 60 per cent in the past year.

But Investec's David Jeary said yesterday: "Our fundamental view remains that Game is approaching the top of the current cycle and that competitive and pricing pressures are increasing."

The growing competition was shown earlier this week as HMV reported increased profits after shifting the focus of the business towards games sales.

But Game nonetheless posted a 28.1 per cent rise in UK like-for-like sales in the 22 weeks to 28 June, with other big sellers for the company including Mario Kart and Metal Gear Solid 4. Although the firm said the quality of the games released during the first half of 2008 was "unprecedented", it remained confident on Christmas trading.

Chairman Peter Lewis said he expected profits for the six months to 31 July to be at least 33 million.

The chain, which bought rival Gamestation last year, said it was continuing with its roll-out of new stores and investing 42m on capital expenditure.