Member Article

Game gambles on eSports to stop the rot as profits dip 32%

UK computer game and electronics retailer Game has blamed the switchover from older gaming formats to Playstation 4 and Xbox One for its near 32% drop in pretax profits.

The figures, which cover the 26 week period up to 23 January this year, were announced this morning to the London Stock Exchange.

Numbers were down for almost every measure for the beleaguered retailer in comparison to the same period in 2015, as it saw profits drop to £22.5m from £33.2m while revenue was also down by 6.3%, from £585.9m to £549.2m.

It was not all bad news, however, as the group saw revenue at its Spanish outlets jump by 5.2% to £141.4m, whilst also posting strong growth in profits from accessories, toys, and pre-owned phones and tablets.

Martyn Gibbs, Chief Executive Officer commented: “Operating in the fast-paced video games industry continues to present both opportunities and challenges to our business.

“Market dynamics in the UK were challenging during our peak trading period, although sales trends improved in the last week of December and first three weeks of January.”

In an attempt to diversify its business, the Hampshire-based firm has recently embarked on a number of new commercial strategies including forays into the Spanish market, and attempts to muscle its way into the booming eSports business.

Game acquired Spanish eSports platform SocialNAT earlier this year and follows on from its £20m purchase of eSports event organiser Multiplay in 2015, as it attempts to capitalise on industry which is expected to grow to around $463m (£326m) this year alone.

With this in mind, Gibbs added: “Increasing engagement with gaming communities and broadening our offer, both within and beyond retail, sits at the heart of our strategy. We are committed to investing in our teams and core foundations to support our plans for the business.

“The development of our competitive gaming, eSports and gaming events continue to progress rapidly at Multiplay, and we are looking to develop similar activities in Spain through the acquisition of SocialNAT.

“I remain excited by our plans for the business and the opportunities ahead of us.”