High street retailer GAME has notched operating losses of £10 million.
The figure, which is pre-tax, stands in contrast to a £1.1 million profit the prior year. Revenues were down by 3.6 per cent (£782.9 million) and gross profit fell by 5.7 per cent (£205.1 million). The retailer has cited a 'challenging' market this year, with big titles like Call of Duty: Infinite Warfare and Watch Dogs 2 failing to deliver in terms of expected sales numbers.
Unsurprisingly however the retailer claims to still be the leading videogames market, saying that it has 29 per cent of overall spend. The company has also said that it is investing in its online and app presences, with performance improving in recent months. In addition, GAME says that it has successfully negotiated additional support from suppliers, and has successfully renegotiated 39 leases for better terms and made £11.1m in operational efficiency savings across its UK stores.
Another potentially redeeming factor here is that these figures are for the financial year that ran until July 2017. In the months since, the retailer has seen a huge investment from controversial businessman Mike Ashley who acquired a 26 per cent stake in GAME. The company has also in the past few months heavily invested in the aforementioned BELONG and Multiplay esports business, which saw sales grow a massive 116.4 per cent to £13.2 million.
“Though our markets remained volatile last year, we made solid strategic progress as we continued to focus on those elements within our control; delivering on each of the four pillars of our strategy and creating a new cost base for our UK retail business,” CEO Martyn Gibbs said.
“After 2 years of declines, our core UK console market returned to growth in the second half of our financial year on the back of the launch of the Nintendo Switch. This growth has continued into our new financial year in both of our key territories.
“Whilst we remain mindful of the structural headwinds that remain in our core markets, we expect recent positive market dynamics to continue into our peak Christmas trading period, driven by strong growth in all elements of the PlayStation 4 category, continued customer demand for the Nintendo Switch, the launch of Microsoft's Xbox One X and continued stronger demand for related software.”
“Against this market backdrop, our priorities remain unchanged. Across the Group we are focused on maximising the opportunities from our core retail markets by delivering a compelling and constantly improving customer proposition, realising further operational efficiencies and driving the continued transformation of the business, as we transition our business from a leading retailer of boxed products to a leading provider of physical and digital gaming products, services and experiences.”