GAME Digital bursts through the ceiling after year-end update

GAME Digital announced it had experienced better-than-expected sales in the second half following the launch of Nintendo's Switch console that drove an 8.8% increase in its UK video game sales.

GAME had previously said it was expecting to grow by between 5% and 6% in the second half as conditions became more challenging in the UK as a result of a "continued softness" in sales of both PlayStation and Xbox consoles.

In its year-end trading update posted on Wednesday, the group said that as anticipated its gross transaction value (GTV) in the UK had dropped off 1.3% but thanks to a strong 23.1% boost in its Spanish division, the overall GTV had risen 6.8% over the six months leading to 29 July.

The company said revenue for the trading year should come in at approximately £780m, a 5% decrease on the £823m it reported in 2016.

On the back of the Nintendo Switch release and the much-anticipated launch of the Xbox Scorpio later in the year, the video games industry as a whole has seen a boost of late.

Martyn Gibbs, chief executive officer of GAME Digital, said, "We have been encouraged by the recent growth in both the UK and Spanish markets overall and we expect that this momentum will continue into peak trading driven by the benefits of continued customer demand for the Nintendo SwitchTM, the launch of Microsoft's Xbox One X and a strong line-up of new games releases."

According to the update, GAME should have in the vicinity of £47m in cash and equivalents at the end of the year, an 8% boost on the £43.1m it had sitting in the bank at the same time last year.

The firm expects to use a portion of these funds to expand further into the eSports realm, saying its objective was to "fully capitalise on the strong growth potential" the market displayed.

While the International Olympic Committee has implied that arguments may still be wanting, several bodies have been seen lobbying for the inclusion of eSports in the 2024 Olympic Games in Paris and will be recognised as an official sport at the 2022 Asian Games in China.

"eSports is a fast growing industry but still relatively immature; IHS Markit said the market grew 19% last year to six billion hours of game time watched worldwide and tt’s estimated that this will reach nine billion by 2021," said Gibbs.

As of 0945 BST, shares had rocketed ahead 40.44% to 34.50p.