Shares in Game Group have been coming under pressure on growing fears of increased competition.
Although the computer games business might not be as badly hit by a consumer downturn as some - given its target audience probably still has a reasonable amount of disposable income - this also means other retailers are increasingly looking to get a slice of the pie, while further down the line there is the prospect of games increasingly being distributed online.
A number of supermarkets - notably Wm Morrison - have already launched discounted offers on a number of the more popular games. Now HMV has announced it is moving into selling second hand items, one of Game Group's most profitable areas.
Altium Securities analyst David O'Brien said:
"HMV has announced that it will enter the lucrative pre-owned games market in 160 stores initially from this Friday. Pricing will have to be competitive, which potentially places pressure on Game's highest margin area. We consider this to be a long term negative and re-iterate our sell recommendation."
Game is down 0.75p at 149p at the moment.
