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GAME hit by slow transition to PS4 and Xbox One

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High street video game retailer GAME is suffering because UK consumers aren't switching to newer consoles fast enough.

The company has just issued a trading update, where it admits that it is struggling in a challenging UK market.

At the heart of the problem is the fact that UK consumers are finally dropping their PS3 and Xbox 360 consoles, resulting in much lower demand for older games. GAME admits that this has been a "faster than expected decline."

Compounding the issue, while sales of PS4 and Xbox One games are rising, they haven't proved to be enough to cover the shortfall.

The result of this is that GAME is predicting half-year earnings of just £30 million, which is a significant drop of £13 million from the same period last year.

Related: Best games 2015

"The trading conditions in the UK video games market have been challenging," says GAME CEO Martyn Gibbs (via Engadget).

"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."

With console profit margins only likely to shrink as the PS4 and Xbox One continue to undergo aggressive price cuts, GAME will be hoping that the UK starts buying games again following the Christmas splurge.

Next, take a look at our PS4 vs Xbox One comparison video:

Alex Walsh

December 23, 2015, 10:54 am

That's odd considering how incredibly well the PS4 and even the Xbox One have sold, and are ahead of the previous generation in installed userbases at the same time in the product life cycle (from what I've read anyway).

Would have thought it's more down to a shift to digital and online stores offering much better deals but obviously that's not something that GAME can admit.

playtech1

December 23, 2015, 12:17 pm

A big difference between old and new consoles is that the latter were launched in an era of widely available broadband, so their online marketplaces are now serious competition for retailers like Game. That's not going to change even if/when there has been a 100% move to the new machines. Add that to the issues facing the High Street generally and I fear for Game's future.

Darkedge

December 23, 2015, 12:37 pm

Nothing to do with their terrible current advertising campaign? That pos would've looked poor back in the late 80's

HoistDude

December 23, 2015, 6:52 pm

Not surprising. Game basically dissed Nintendo. PS4 and Xbox One are tapping out at this point. Sure, they sold like crazy the first two years, but they cater to single adult male gamers only. That crowd (i.e., the hardcore crowd) already has their new systems. The more casual gamers and families are just now looking to upgrade, and PS4 and Xbox have little to offer. At, least comparatively when you look at the Wii U, 3DS, and Amiibo.

Despite the talk, let's not forget that the 3DS is the best selling console this generation and has DOUBLE the install base of PS4 and TRIPLE the install base of Xbox One.

Game shot itself in the foot by catering too much to the hardcore crowd and dissing Nintendo.

Mike Walker

December 24, 2015, 10:16 am

What do they expect, shops run by teenagers, rubbish service, high prices and as the comments below minimal Nintendo presence, the issue is more them than the transition to the current gen machines.

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