‘Shocking’ result clouds Game’s future once more
Game’s future is again under a cloud after a result described by one analyst as “shocking”.
The embattled UK retailer of games and game hardware has reported an 18.1 per cent decline in UK gross turnover in its first half year – following a decline of 9.1 per cent in the same period last year.
“Despite weak comparatives, Game has had another shocking performance as low margin hardware sales from the likes of PS3 and Xbox 360 dragged down sales,” observed Zoe Mills, associate retail analyst with GlobalData.
“Yet, the gaming specialist cannot blame all its woes on the performance of its old generation consoles, with GTV still down 12.2 per cent once low margin hardware is stripped out.”
Mills said the gaming market is evolving and Game’s adaption to these changes has, in the past, been too slow.
“Greater focus must be placed on its in-store gaming venues if it is to weather the storm of declining games console sales. In 2016, the retailer opened seven instore gaming areas — a good start. The proposed opening of a further 20 stores this year will also help the retailer turn its business around and achieve revenue growth.”
Game claims that one in five of those visiting its arenas since their launch in July 2016 were new customers to Game, highlighting that this concept has the potential to bring different consumers to its stores such as PC gamers which historically have not been a core customer for the retailer, Mills said. The gaming arenas have also increased footfall and dwell time in-store ensuring that the retailer will be able to encourage more retail sales.
“Game will hope to produce a much better result in the second half with the successful launch of Nintendo Switch the primary cause of its group core retail GTV up 20 per cent in the first seven weeks. However, strengthening its wider proposition will be critical to ensure it does not witness horrific declines in the next financial year from an overreliance on new console launches.
“Placing greater focus on PC gaming accessories and VR, as well as its in-store gaming arenas, will help Game to stabilise its proposition in the future,” Mills concluded.
The retailer has already survived one bankruptcy before being purchased and relisted in streamlined form.