Game Looks For A Power-Up As Christmas Sales Drop 12 Percent

Game Group is hoping new motion-control hardware, blockbuster releases and new peripherals will return it to growth this year, after sales in the five weeks to January 9 fell 12.1 percent from the prior year.

The current generation of consoles is now mature, meaning fewer console sales than last year – though, on the surface, there’s plenty of new console owners coming to market. Game explains: “Much of the decline is due to a fall in revenues from the Nintendo formats.”

Pre-owned games sold more than last year. UK-and-Ireland Christmas sales were down most, by 18 percent, and annual sales there are down 15.1 percent. But this outperformed the market-wide 24 percent dip (source: GfK ChartTrack).

And Game’s 2009/10 profit – down by as much as 31 percent from last year’s £126.2 million high – will still be the company’s second-best ever, at between £87 million and £93 million, the retailer forecasts.

Looking ahead, Game namechecks Microsoft’s forthcoming Project Natal motion-sensitive interaction system as helping give a boost on its scheduled November launch.

“In 2010/11 we expect the video games market to continue moving towards higher margin software and new peripheral technology, to supply an unprecedented installed base of consoles in the market.

“We believe that this, together with additional hardware pricing activity, will continue to stimulate the market before we transition to the next growth phase of the video games market and our business.”