LONDON: Selling video games on the high street does not look like a business with a future – so this morning’s profit warning from the Game retail group hardly comes as surprising news.
Game collapsed three years ago after an over-ambitious expansion programme, and was then bought out of uer from one generation of consoles to the next. The figures show that in their first two years, 3.7 million of the next-generation consoles were sold in the UK, compared with the 2.4 million sales of the PS3 and the Xbox 3 in their first two years.
The trouble is that the margin on a console is much thinner than on a game, and the Xbox One and PS4 came bundled with some very attractive games at first, which meant their owners did not splash out on many new titles. Even now, it seems, they are being slower to snap up new games than had been anticipated, while owners of older consoles have cut back much faster than expected on their purchases.
But the games industry body UKIE insists the picture is much brighter than the Game profit warning might suggest. It quotes figures from MCV showing that total spending on games by UK consumers rose 13% to £3.9bn in 2014.
“Faster broadband and evolving business models have meant consumers now have multiple ways to buy and play games,” says UKIE’s Chief Executive Jo Twist. But despite the availability of these new ways of gaming she insists that a physical presence for the games sector on the high street remains vital.
