Pressure on Game Group as sales of new titles and computer consoles falls

A FURTHER decline in sales of computer games during the first quarter of 2010 means the pressure is on this week for games and consoles retailer Game Group.

Investors are braced for the firm to unveil poor results on Wednesday amid a difficult year for the industry in 2009.

Despite record demand for last year's blockbuster releases – including Call Of Duty: Modern Warfare 2 and Fifa 10 – other titles have not done so well and overall sales fell well below 2008's bumper year.

Price cuts by supermarket rivals – selling the hit games at below cost – have also hurt the group, as well as retailers such as HMV looking to grab a bigger share of the market.

While Game's market share dipped to 33.9 per cent in 2009 from 35 per cent, supermarkets enjoyed a 17.7 per cent share. Analysts said the supermarkets tended to be the beneficiaries as former shoppers of failed Woolworths and Zaavi looked for new suppliers.

Analysts expect Game to show pre-tax profits of 88.8 million for the year to 31 January. Although it will be the second-best profit performance in the group's history it is well down on the previous year's 126.2m and short of earlier expectations.

The group's post-Christmas update showed like-for-like sales in the UK and Ireland down 17.5 per cent in the five weeks to 9 January, a worsening of the sales trends seen over the year as a whole.

There were no major console launches last year to spur on sales, while lower prices on existing platforms, such as the Xbox and PlayStation 3, also dented like-for-like sales.

With more than 27 million consoles in the UK, Game now expects growth to come from sales of accessories such as motion-sensitive controllers.