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Britain’s largest games retailer, Game Group, today announced that like-for-like sales for the last six weeks trading (to January 8th) were down some 20%, in no small part affected by shortages of Sony’s PS2 console.
The shortage – which some believed was an exercise to drum up consumer interest in the console, with supplies ‘miraculously’ appearing in time for the Christmas period – was indeed genuine, and left many stores sold out long before the festivities began. Combined with a late shortage of Xbox consoles nearer Christmas, the lack of hardware – and very little supply – hurt sales.
Said GAME Group chairman Peter Lewis in today’s trading update “The non-availability of console hardware in the run up to Christmas was particularly disappointing after the strong start to the second half, with titles such as GTA: San Andreas and Halo 2 setting sales records,”.
Talking of how Game adapted to such shortages, he continued “Faced with this unprecedented breakdown in the supply of PlayStation 2 and the resultant impact on customer flows, we rapidly adapted our trading strategy utilising strong software offers and promoting alternative hardware formats to drive gross margin. Throughout the year we have maintained strong cost controls and this has also helped to offset the impact of reduced revenues.” The ‘adapted trading strategy’ talked about involved only selling console packages, usually containing games, memory cards and 3rd-party controllers, rather than the console on its’ own, for a set price.
Despite the poor-Christmas trading (a problem not exclusive to Game, what with many high-street retailers suffering from sluggish sales in all types of products), the second half performance is still expected to be some 10% up on last year. And, looking forward, 2005 is expected to be bright; with the Sony PSP (which Pro-G will have coverage of next week) and Nintendo DS both due to be launched around March, hopes are high that they will sell well. Furthermore, the European operation is expected to break even a year ahead of schedule – so good times abound. Game is dead! Long live Game!
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