UK Game Retailer Releases Improved Christmas Report

Predominant UK specialty video game retailer The Game Group plc has provided an update on its trading performance over the Christmas period, and for the 49 weeks to 7 January 2006, in an official statement. It revealed that, for the 6 week period ended on January 7, 2006, total group sales were up by an impressive 37.5% compared to the previous year, and like-for-like sales were up by 26.6%, showing a significant uptick for December 2005 in Europe. As for sales for the 49 week period ended on January 7, 2006, total group sales were up by a slightly smaller 11.5%, with group like-for-like (same store) sales only increasing by 2.7%. The Game Group went on to comment that, since the company's last pessimistic trading update on November 29, the company had been successful in securing a much improved supply of Sony PSP consoles, particularly in the 10 days leading up to Christmas. This meant that sell-through of both PSP hardware and software in the UK and continental Europe had been extremely good, and, together with sales on established formats and the launch of Xbox 360, led to significantly improved trading over the Christmas period. Therefore, the company now expects that the Group profit before taxation and exceptional items for the year ending January 13, 2006 will be between £8m ($14.1 million) and £10m ($17.6 million). Looking ahead to 2006, the Game Group is predicting "a rapid growth in ownership of both Sony PSP and Microsoft Xbox 360", and also cites "the expected launch in the second half of Sony Playstation 3 and Nintendo Revolution" as another important factor. Commenting on the Christmas trading period, Peter Lewis, Chairman said: "This outstanding Christmas sales performance has helped an otherwise difficult year as the industry transitions to the next technology cycle. The UK market continues to be very competitive, particularly on second generation formats, which has in part contributed to our reduced gross margins. However, the resilience of our business model has been amply demonstrated."