Entertainment retailer Game Group has today reported a 11.3 per cent fall in total sales since January but insists that its new strategy is starting to improve the firm’s performance.
Like-for-like (LFL) group sales during the 19 weeks to June 11th 2011 declined 9.4 per cent year-on-year, with UK & Ireland stores outperforming international outlets on a LFL basis – down 9.1 per cent and 11.8 per cent respectively.
Despite the precarious state of the physical media industry at present, Game’s management is still buoyed by being ahead of the market, with rivals seeing revenues drop 12.8 per cent over the period, and by its trading seemingly improving.
Game has cut market growth expectations however after reviewing the latest releases unveiled last week at the E3 annual global video games trade show, including titles such as Modern Warfare 3, FIFA 12, Mario Kart 3D and Assassin’s Creed Revelations.
Having previously expected the total market to be down five per cent, it has now increased its projected decline to -10 per cent but still believes margins will be -100bps and its operating cost to be down £5 million to £8 million for the full year.
Critics will argue that Game has been a long time promising a turnaround in trading but group CEO Ian Shepherd argues that its new focus on multichannel, a reduction of stores and improving loyalty will ultimately prove successful.
“We are seeing early results from the strategic initiatives that we outlined in February, even though the video games market has been more challenging than anticipated this year,” Shepherd commented.
“The pipeline of new hardware and software which has been announced for 2012 and beyond is encouraging, and our strategy is designed to strengthen our leading position and drive growth as the market transitions and evolves over the next five years.”
Annual total sales dropped 8.3 per cent during the last financial year, and with business improving Game believes that it is on target to improve this to between flat and a three per cent decline for 2011.
The group’s total owned and concessions stores have been reduced from 1,312 to 1,298 since January with 17 of those outlets closing in the UK & Ireland.
Trading over the last seven weeks has reportedly been down only four per cent year-on-year thanks to the successful launch of the LA Noire game.