Game Digital, a video game retailer, has issued a profit warning due to disappointing sales as the start of the December festive trading period. Company shares dropped a whooping 40% in the early stages of the trading season.
Game Digital was created in 2012 after Game Group fell into administration. They stated a number of factors had combined to make trading conditions in the market challenging.
Chief Executive Martyn Gibbs said in a statement "The switch over from the older gaming formats to PlayStation 4 and Xbox One software has impacted profitability across the UK market."
"The extent of the impact of this switch over has only become apparent in December which has been compounded by lower year on year high street and shopping center footfall."
Video game sales have dropped an astonishing 13.5% in a 21 week period ending on December 19 and gross transaction values was down 6.7% at £466.8 million euros.
Within the next few days, the group will have its busiest trading period. Because of the recent trends given and disappointing sales since the start of school up until the Christmas holiday, the board will now be expecting that the EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) be adjusted for the 26 weeks ending January 23 of 2016, and will be around £30 million euros, a huge margin from the adjusted EBITDA for the same period last year that was £43 million Euros.
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