Game Group shares plunge 44% after poor sales

Game Group's share price sank by 43.7 per cent to an all-time low of just 3.8p after it issued another profits warning yesterday and admitted it was likely to breach banking covenant tests next month.

The video games retailer maintained that shoppers had continued to buy the latest releases, including Call Of Duty: Modern Warfare 3, before Christmas but its underlying sales collapsed after consumers sharply slashed their expenditure on other products, such as peripherals and hardware. The chief executive, Ian Shepherd, said: "Consumers came out for the hits but not for anything else."

He described 2011 as an "incredibly tough" year for the industry, but said it had "outperformed" the weak games market over Christmas.