A weak round of new game launches and poor performance by blockbuster titles in the UK was responsible for a 27 per cent fall in profits at Game Digital, the video game retailer, in its first half results.
Pre-tax profits for the 26 weeks ended January 28 were £16.5m, down from £22.5m a year earlier. Revenues were down 9 per cent, from £549.2m to £499m, driven by poor performance in the UK retail market, the group’s largest division.
The company’s Spanish division, which makes up a third of revenues, did better, posting revenues up 20 per cent.
Game said the development of a new set of seven in-store gaming areas, launched last year as part of the company’s strategy to diversify revenues away from games and hardware, were yielding “encouraging early results”, with plans to open another 20 in 2017.
But while its events, esports and digital division increased its revenues by 121 per cent, losses widened to £5.6m from £2.4m in the first half of last year.
Chief executive Martyn Gibbs said:
We continue to prioritise our efforts on taking the necessary actions to respond to these challenges, whilst positioning the business to capitalise on major future market opportunities. Although we expect industry-wide challenges in our core Xbox and PlayStation categories to continue, we anticipate the overall UK market to remain positive during the rest of 2017.
Game cut its interim dividend from 1.67p per share to 1.0p per share, citing the need to increase investment in its stores.