Game Digital remains focussed on cost savings

Video games retailer Game Digital expects to post broadly flat revenues from the second half of its trading year as first-half profits were dampened by increased sales of lower-margin products and challenges in its pre-owned business.

Game told investors on Tuesday that its gross transaction value was likely to have increased 1.8% to £907.2m in the year ended 28 July, despite revenues slipping 0.37% to £780m, as declining UK retail sales were somewhat offset by growth seen in Spain and at its events, e-sports and digital division.

Where "quality new releases" have launched, such as God of War 3, Game noted that the market and its volumes had been positive. Mint console hardware, software, digital and accessories sales were up 12.2% for the year, after slowing to 5.9% in the second half.

During the half, the Hampshire-headquartered company, expanded its e-sports offering with an agreement for its Belong in-store gaming arenas, where customers pay to play the latest games on various games consoles, rolling out into a number of Sports Direct stores. There are currently 19 Belong 'arenas' and two will initially be added via the deal with Sports Direct, which owns a 25.75% in Game.

Game, which has also begun to pivot away from its more traditional brick and mortar stores to capitalise on a growing shift away from buying video games in store to making purchases online, insisted that Belong would lead to a more successful performance in the year's following its 2019 trading year. "The existing 19 Belong arenas continue to perform well with all key metrics advancing, a considerable affirmation of the offering," said chief executive Martyn Gibbs.

The group said its focus remained on delivering cost savings in the UK in order to offset the continuing sales mix impact on gross margin, with "further progress" made in the second half to reduce the cost base.

Cash and equivalents rose 22.8% to £58m.

As of 0840 BST, GAME shares had climbed 2.63% to 28.28p.