Game Group, the troubled computer games retailer, has blamed "extraordinary economic times" for another profits warning after a spike in sales of new releases failed to materialise.
Nearly half was wiped off the market capitalisation of the business yesterday after it marked down its guidance on profits, gross margins and underlying sales.
Analysts at Peel Hunt now expect Game – which has 1,287 stores – to sink to a loss of £11m for the year to 31 January 2012, compared with a profit of £38m the previous year.
In a tale of woe, Game said revenues at its software, hardware, pre-owned games and accessories units were down. Ian Shepherd, the chief executive, added: "The overall games market remains very challenging, despite strong title launches, and our guidance today reflects the extraordinary economic times in which we operate."
Some industry experts believe the inexorable shift to downloading games online means that Game could be only a few steps behind the troubled entertainment group HMV in terms of having to find a plan B. Others question whether Game should be a quoted company, when it is so reliant on the vagaries of the release cycle of games.
Game raised hopes in its interim statement on 27 September, when it listed 15 top-rated games to launch before December, including Call Of Duty: Modern Warfare 3, Battlefield 3 and Fifa 12. At that time, it admitted the next 10 weeks were "extremely important", as they represent about 40 per cent of annual revenues. But in the seven weeks since then, Game's sales have fallen by 4.9 per cent, and they are down 2.9 per cent on a like-for-like basis.
Philip Dorgan, an analyst at Panmure Gordon, said yesterday: "Game's last outlook statement read like a child's letter to Santa. It appears the unfortunate child will not be getting any pressies." Game last warned on profits in June.
Mr Shepherd said "the big game launches over the last few weeks have gone pretty well", but he conceded that customers had cut back significantly on purchases of hardware, accessories and back catalogues.