GAME profits fall by 28%, CEO quits

Posted on 21 Apr 2010 at 10:38

The UK's leading high-street retailer of games and games consoles has just reported a 28 per cent drop in year-on-year profits. GAME Group run both GAME and Gamestation stores. The Chief Executive, Lisa Morgan, has stood down after 14 years as a result, though the company blamed tough trading conditions rather than attributing blame to senior executives.

"Our results were delivered against the backdrop of a very difficult trading environment, which saw the global PC and video games market decline by over 20 per cent," said chairman Peter Lewis.

This may come as a surprise to many, given the massively publicised success of Call of Duty: Modern Warfare. However, huge titles often generate massive price wars between retailers, and actually reduce profits compared to when sales are spread across multiple titles.

BBC News reported that international sales of games rose by 1.7 per cent last year, while sales in the UK dropped by 20 per cent. We believe this is because the Nintendo boom of recent years, with huge numbers of Wii and DS consoles sold has finally started to slow.

The launch of motion controls systems from Microsoft and Sony later this year should help alleviate these problems, though the stock market wasn't convinced with GAME shares tumbling by 11 per cent this morning.

Author: Seth Barton

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