Game Digital today said it was making progress with a strategy that rebalances its business away from retail sales and towards in-store experiences through its Belong gaming arenas.
It said its aim to right size the retail business as it moves “from lower margin retail sales to high margin gaming experiences through Belong.”
So far Game has opened 20 of the gaming arenas in stores, where gamers, all members of its Game loyalty club, can try out the latest consoles and games, and it now plans to have 100 opened in the next three years. The retailer has now set up a joint venture with Sports Direct to further roll out the concept, including to Sports Direct stores.
The update came as the retailer, a Top50 trader in IRUK Top500 research, reported revenues of £517.4m in the 26 weeks to January 27. That’s 3.9% higher than in the same period last year. Ecommerce sales grew by 30.6%. But pre-tax profits of £12.3m were 25.5% down on last time. The fall in profits affected the retail side of the business, with profits there down by 56.1% to £9.7m. The events, e-sports and digital side of the business posted pre-tax profits of £2.6m, from a loss of £5.6m last time.
Chief executive Martyn Gibbs said: “During the period important strategic progress was achieved, helping us to better position the group for our development in the rapidly growing esports market with our unique and high margin concept traded under the BELONG banner. This is further facilitated by entering into a new and exciting collaboration with Sports Direct that will allow us to accelerate our expansion and help develop a larger scale experience based gaming business than previously planned and steadily reposition our retail offering. The traditional retail landscape is under increasing pressure and we have developed a strong growth strategy to utilise the valuable components of our core business in building our new experience based gaming offer.”
The business has also looked to cut costs in its retail business, and says it achieved savings of £5m as it closed stores – to an estate of 299 stores from 311 at the same time last year – and renegotiated property leases. It says that it has 230 potential lease expiries left in 2018, and there will be
