Game cuts profit forecast after sales slump

Game Group, the video games and consoles retailer, today warned that profits would be lower than expected after poor festive trading.

Chief executive Lisa Morgan said price drops on Microsoft's X Box and Sony's Playstation could not offset the year-on-year decline in demand for Ninento's hit Wii console.

Shares in Game dropped six per cent to 100p after it said sales in Britain and Ireland plummeted by 17.5 per cent in December and the first week of January. Christmas accounts for a quarter of Game's annual sales.

Ms Morgan said the figures had shown "significant improvement" since then: "We're still expecting pre-tax profit to come in between £87 million and £93 million, the second-best performance in our history."

Game has a strong schedule of releases in the coming months, including Splinter Cell: Conviction and God of War 3. It said it would focus on more lucrative, peripheral products, such as video game steering wheels, guitars and dance mats.