It seems like the UK games retailer GAME has lost a significant amount of income due to the poor performance of games over last year's Christmas period. This news comes from a report on Gamesindustry.biz.
Over the fourth fiscal quarter of 2016 (which ended on January 28), GAME's profits took an alarming nosedive to the tune of 26.5% before taxes, settling down at £16.5m. This is way lower than the expected £22.5m. The company has gone on record to say that they blame the poor performance of AAA titles and the ever-falling hardware sales over the holiday period. Here's a quick comparison: 2015 saw five games sell more than a million units. 2016 only had three.
GAME's investment in the nascent esports category also contributes to the company's losses over the last year. The company has also lost 3% of its console market share.
This decline in revenue hasn't affected the company's operations outside of the UK, with the Spanish arm of the organization showing signs of growth. This is possibly due to the Spanish GAME stores offering pre-owned smartphones and tablets in addition to PC parts and video games. The company'widening focus has paid off thus far, with 'new retail categories' going up by 28.3%.
Securing GAME's future is no easy task and will lead to the company having to make some hard choices to make ends meet. This year, the company is planning on opening 20 more 'Belong' stores over the course of 2017. These stores offer the same inventory to prospective buyers, with the added benefit of you being able to play games in their stores. This'll allow GAME's stores to function as gaming hubs where players can come in and play games against other players.
GAME is also positive about gaming in 2017. Big releases like the Nintendo Switch, the upcoming release of Project Scorpio and a few big name titles should allow GAME a more stable revenue stream in addition to the Belong concept.
We delivered a strong performance in digital and new VR technology, however our first half saw another tough period for console hardware and physical software sales in the UK, impacted by a weaker line-up of new games launches and the market-wide underperformance of certain key titles.What do you think about this news? Let us know in the comment section down below!
Martyn Gibbs, GAME CEO