Game Digital shares tank after profit warning

23rd Dec 2015 07:49

(ShareCast News) - Shares in Game Digital tanked after the specialist video games retailer warned adjusted operating profit for the 26 weeks ending 23 January 2016 will be around £30m, down from £43m in the same period a year ago following disappointing sales since the start of school Christmas holidays.In an update for the 21-week period ended 19 December, it said trading conditions in the UK retail market have been challenging with total sales for the video games market down 13.5% year-on-year.Game said UK gross trading margin of £73.9m was down £3.7m or 4.8% from a year ago.Meanwhile, revenue, or total gross transaction value as Game calls it, of £466.8m was down 6.7%, largely due to the reduction in low margin console sales, down 20.3%.Chief executive officer Martyn Gibbs said: "The trading conditions in the UK video games market have been challenging. The switch over from the older gaming formats to PlayStation 4 and Xbox One software has impacted profitability across the UK market."The extent of the impact of this switch over has only become apparent in December which has been compounded by lower year on year high street and shopping centre footfall."At 1103 GMT, Game shares were down 39.2% to 125.11p.