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Game Digital focuses on the consumer experience, but warns on profits

Game Digital updates on multichannel strategy

Game Digital said today that it continued to focus on improvements to the customer experience, with plans to expand its in-store gaming arena network, as it focuses on growing its business.

The gaming retailer is looking at how it will finance the roll-out of its new in-store gaming arenas. Its Belong arenas are exclusive to Game reward card holders who can use them to test out the latest gaming technology, including virtual reality, play against others, and to hold birthday parties, have so far been launched in 12 locations. Today Game said it was “exploring new funding arrangements” to roll them out further.

But while Game is on course for “record sales” in its Spanish business, its UK business is affected by “challenging trading conditions” and by UK shortages of the new Nintendo Switch games console, which it had expected to boost its business in the second half of its financial year.

Game Digital, a Top100 retailer in IRUK Top500 research, said in a trading update today: “Consumer demand for Nintendo Switch has been, and remains, very strong, however the level of supply to the UK market has been lower than expected. These lower levels, combined with the continued softness in our core Xbox and PlayStation markets, have impacted sales.”

It said that, although it expected to see turnover rise in the second half, it now expected that full-year profits would be “substantially below previous expectations”.

It added: “Looking forward, we continue to be encouraged by the positive consumer reception of Nintendo SwitchTM in both of our geographic markets. This demand is helping to strengthen the outlook for our next financial year and we expect to benefit from both greater Nintendo SwitchTM hardware supply as well as the strong interest that is building for Microsoft’s new Xbox One X console. Furthermore, we expect to see growth returning to the UK and Spanish software markets in our next financial year, benefiting from a stronger line up of new releases on Xbox, PlayStation and Nintendo.”

Game’s UK action plan includes, alongside improvements to the customer experience, a programme of cost reductions and improved supplier arrangements. It is also focusing on cutting costs in its store estate, where it has more than 220 leases “events” to manage by the end of 2018.

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