PSP comes out on top
Game Group plc have revealed their game sales have escalated over the Christmas period. It appears that the boost in sales was down to the supply of Sony PSPs that were delivered over the period. Microsoft failed in the delivery of enough Xbox 360s to meet the high demand, so it looks like many consumers opted for the PSP instead.
Here is the press release in full:
The GAME Group plc ('GAME') is today providing an update on its trading performance over the Christmas period and for the 49 weeks to 7 January 2006.
Sales for the 6 week period ended on 7 January 2006:
Total Group sales were up by 37.5%. Group LFL sales were up by 26.6%.
Total sales for the UK and Ireland were up by 30.2% with LFL sales up by 27.7%.
Total sales for Continental Europe were up by 69.4% with LFL sales up by 22.2%.
Sales for the 49 week period ended on 7 January 2006:
Total Group sales were up by 11.5%. Group LFL sales were up by 2.7%.
Total sales for the UK and Ireland were up by 4.9% with LFL sales up by 1.6%.
Total sales for Continental Europe were up by 43.0% with LFL sales up by 7.8%.
Since our last trading update on 29th November 2005, the Group has been successful in securing a much improved supply of Sony PSP consoles, particularly in the 10 days leading up to Christmas. Sell through of both PSP hardware and software has been extremely good. This, together with our creative promotion of established formats and the launch of Xbox 360, led to significantly improved trading over the Christmas period.
The Board anticipates that gross margins for the year as a whole will decrease by around 350 basis points compared with last year. This is as a result of cyclical deflation in software selling prices and the increased participation of hardware in the sales mix.
In Continental Europe, where we accelerated our store opening programme, we expect to see our profits grow in aggregate for the year.
The Board now expects that the Group profit before taxation and exceptional items for the year ending 31 January 2006 will be between £8m and £10m.
Looking ahead to 2006 a rapid growth in ownership of both Sony PSP and Microsoft Xbox 360 is anticipated, together with the expected launch in the second half of Sony Playstation 3 and Nintendo Revolution.
Commenting on the Christmas trading period Peter Lewis, Chairman said:
"This outstanding Christmas sales performance has helped an otherwise difficult year as the industry transitions to the next technology cycle. The UK market continues to be very competitive, particularly on second generation formats, which has in part contributed to our reduced gross margins. However, the resilience of our business model has been amply demonstrated. Our industry leadership was reaffirmed with an increase in market share throughout the Christmas period compared with October and November.
The new technology cycle has now begun. With 700 stores our business is well positioned to enjoy the benefits. The Board remains confident of a successful outcome for the financial year 2006/07".
