The last few weeks has seen some big game titles being released to the market that has resulted in millions of units being sold. This is normally a busy time of year and even more so with some big titles that have been in development for quite a while being released, such as Battlefield 3. We now have news that there could be troubled times ahead for the GAME Group.
Last week the retailer lowered its revenue by over half according to an article over at the Edge. Originally it was expected to have a full year revenue between zero and three percent but now GAME is saying it could drop by at least seven percent.
The video game retailer is still confident it is outperforming the market as a whole, but like-for-like revenue in the forty one weeks to November 12th dropped 8.6 percent. The market as a whole dropped by 12.3 percent but the forecasts has unsettled investors.
Its share price dropped from 15.75p down to 10.25p that is a fall by 35 percent in just one day when the company announced the news. Since then the share price has dropped every day and closed at only 6.66p recently, which accounts for a drop of 57.7 percent. At the start of this year the Game Group’s shares were valued at 70.5p, and even further back in 2008 they were worth 296.7p.
This year the retailer has been experimenting with digital sales but it has been a far from successful year, which recently saw losses more than double. It has found it hard to compete with the supermarkets with prices, and when the Nintendo 3DS was launched it was purchasing stock from Tesco stores and selling it as pre-owned on its own shelves.
Luckily it is not all doom and gloom for the retailer though as many analysts feel GAME can turn things around. Despite expected losses it has about £120 million in the bank and has increased its market share, which coincides with new hardware releases next year with the PS Vita and Wii U.
Do you still use GAME?