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UK retailer GAME issues profit warning as Switch shortage hits hard
UK retailer GAME issues profit warning as Switch shortage hits hard
June 30, 2017 | By Chris Kerr




UK video game retailer GAME has warned investors that its profits for the full financial year will be "substantially below previous expectations."

As reported by GamesIndustry.biz, the company has blamed its flagging performances on the Nintendo Switch stock shortage, explaining that despite "very strong" consumer demand, there simply aren't any console to stick on shelves. 

Adding to GAME's worries are a number of other "market challenges," such as the softening of the core Xbox and PlayStation markets. 

Although the retailer was prepared for a tough year and potential stock shortages, it didn't believe Switch availability would become this much of an issue. 

"We anticipated an overall positive sales performance in the second half of the year, underpinned by the successful launch and continued consumer demand for the Nintendo Switch console, as well as further progress across our other UK sales initiatives," reads a company statement.

"Consumer demand for Nintendo Switch has been, and remains, very strong, however the level of supply to the UK market has been lower than expected. These lower levels, combined with the continued softness in our core Xbox and PlayStation markets, have impacted sales."

As a result of those struggles, the company's share price has dropped by almost 30 percent to just 23 pence (30 cent) per share.

There is a silver lining of sorts though, as GAME now expects to benefit from Switch sales in the next financial year, and believes the release of titles like Red Dead Redemption 2 is cause for optimism. The company also hopes Microsoft's supercharged console, the Xbox One X, proves to be a hit.

"We continue to be encouraged by the positive consumer reception of Nintendo Switch in both of our geographic markets," the statement continues. 

"This demand is helping to strengthen the outlook for our next financial year and we expect to benefit from both greater Nintendo Switch hardware supply as well as the strong interest that is building for Microsoft's new Xbox One X console.  

"Furthermore, we expect to see growth returning to the UK and Spanish software markets in our next financial year, benefiting from a stronger line up of new releases on Xbox, PlayStation and Nintendo."



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