Struggling UK retailer GAME has blamed its financial struggles on the Nintendo Switch, saying that its profits have suffered as a result of the stock shortages the new console has faced.
GAME, the UK’s leading brick-and-mortar video game store, reported that its profits have fallen by almost 27 per cent in the first half of its financial year. A statement from the company revealed that they had been banking on the Switch and key releases to carry them to their sales estimations, though Nintendo failing to meet the high demand for its handheld / home console hybrid caused their bottom line to suffer, as did the disappointing performance of games such as Call of Duty: Infinite Warfare.
A statement from Nintendo (via GamesIndustry.biz) reads:
“In our half year results announcement on 29 March 2017, we stated that we expected the challenging trading environment faced in the UK retail market in the first half to continue into the second half of the financial year. We also stated that 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, although this positive momentum would be highly dependent on stock availability of Nintendo Switch.
“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. The Group still expects to deliver positive Group GTV2 growth in the second half of approximately 5 to 6%, however this is below our previous expectation. As a result, we now expect Adjusted EBITDA for the full year to be substantially below previous expectations.”
GAME added that they “continue to be encouraged by the positive consumer reception of Nintendo Switch”, and that the launch of Red Dead Redemption 2, the Xbox One X and increased Switch stock are expected to reverse their fortunes.
The store has experienced continued financial difficulties over the past five years, with GAME having been put into administration in 2012. Since then it has attempted to devise a number of money-making programs, including a new and expensive Elite Rewards system that costs subscribers £36 per month.
