Game vows to fight on in high street squeeze

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Game Group saw nearly 15 per cent wiped off its market capitalisation yesterday after it posted another set of dire sales, as its remuneration policy got a bloody nose from investors at its annual meeting.

But Ian Shepherd, the chief executive of the 1,299-store group, said the pipeline of games for next year was "encouraging". He admitted the "video games market had been more challenging than anticipated this year", as the computer game specialist said its underlying sales tumbled by 9.4 per cent for the 19 weeks to 11 June.

Game is battling a dearth of blockbuster game releases and a downturn in consumer spending, as well as fierce competition from the supermarkets.

Shares in Game tumbled by 6.5p, or 14.4 per cent, to 38.75p yesterday – their lowest for more than eight years. Game had previously said it expects the wider games market to be down by 5 per cent in 2011 but now forecasts a plunge of 10 per cent.

As a result, the retailer, which has 622 UK stores, reduced its estimate for its own sales to between zero and a fall of 3 per cent. But Game's sales curve improved in the last seven weeks of the reported period, with its UK like-for-like sales down by only 1.5 per cent.

Mr Shepherd also described the software releases for games in the second half of the year, including Modern Warfare 3, which is widely expected to be the biggest, Fifa 12 and Battlefield 3, as an "embarrassment of riches".

He added: "We think there is every reason to be confident in the future of the business." In addition to holding capital expenditure flat, Game aims to grow its bottom line by expanding its online and pre-owned games business.

At its AGM yesterday, more than 45 per cent of Game's shareholders voted against its remuneration report.