Game’s profits will be “substantially below” expectations

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Game

Game has issued a profit warning revealing to shareholders that profits were likely to come well below expectations for the year.

The struggling video game retailer said it was hit by an inability to keep up with demand for the Nintendo Switch, as the Japanese company‘s notorious stock shortages damaged margins.

The retailer is increasingly reliant on flagship console sales, as physical game sales are being eaten away by their digital counterparts.

“Consumer demand for Nintendo Switch has been, and remains, very strong, however the level of supply to the UK market has been lower than expected,” it stated in a trading update.

“The group still expects to deliver positive group gross transaction value growth in the second half of approximately 5-6%, however this is below our previous expectation.

READ MORE:  Hands On with Game‘s Belong arena

“As a result, we now expect adjusted EBITDA (earnings) for the full year to be substantially below previous expectations.”

In its half-year update in March, Game saw pre-tax profits drop 26.7 per cent alongside a sales dip of 18.1 per cent.

Although it was plagued with stock issues, the Nintendo Switch has reinvigorated softening demand for the Xbox and Playstation console mainstays, as the more expensive consoles struggled in a “challenging trading environment.”

The retail recently launched its e-sports arm, aiming to offset the reliance on retail sales from triple A releases and flagship consoles.

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