Game Group suffers from "extraordinary" economic times

Game, which has closed 37 stores this year, has blamed decreased sales and revenue on what it describes as "extraordinary" economic conditions.

Shares in the specialist retailer slumped after it said it would miss sales and profit targets.

Sales in all categories were down 10.6 per cent for the 41 weeks to 12th November: software, hardware, second hand sales and accessories. This figure accounts for day one sales of behemoth Call of Duty: Modern Warfare 3.

"This is ahead of the overall video games market, which was down 12.3 per cent in the same period," Game said.

Online sales remained stable, however. 28 per cent of total sales now come from the second hand market, which operates at a 40 per cent margin.

Game has now lowered its forecast for the financial year. It expects revenue will be down 7 per cent.

"Major software titles are launching in line with first week expectations, but are then seeing a quicker tail-off than historically experienced," Game said. "Customer footfall and basket sizes are down reflecting wider consumer uncertainty."

Game is exploring digital sales as it attempts to combat the decline. It also launched the GAMEwallet in October. Game boss Ian Shepherd said: "The overall video games market remains very challenging, despite strong title launches, and our guidance today reflects the extraordinary economic times in which we are operating.

"Game has outperformed the market, reinforcing our position as market leader, and I am hugely proud of our teams. They remain focussed on delivering our strategy, controlling costs and driving operational cashflow, and we remain well placed to benefit in the medium term both from the next console cycle and the growth in digital and social gaming."

Game will report its crucial Christmas period results on 11th January.