Game shares fall by half after profit warning

Shares in Game Digital have fallen 50% after the company issued a profit warning following fierce competition over the Christmas period.

Sales were down 6.7% in the 11 weeks to 10 January compared with the previous year, leaving earnings much lower than expected.

Profits would be “broadly in line” with last year’s £51.3m, rather than the £63.7m expected.

The company blamed “intense competition” in the run up to Christmas and lower margins on sales of Xbox One and PlayStation 4.

Game Digital had become the best performing float of 2014, with its share price up nearly 65% since June when it debuted.

Martyn Gibbs, Game Digital’s chief executive, said: “We invested margin in offering gamers competitive product propositions through the bundling of games with hardware and reduced pricing, to recruit as many new generation customers as quickly as possible.”

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