HMV's trading news - in particular, comments about weak sales of video games over Christmas - may not bode well for Game Group, but there may be a bright spot on the horizon.
The computer games retailer is set to give its own update on Wednesday, but looking further ahead, there could be the prospect of new consoles to breathe some life into the struggling market. According to trade magazine MCV, next generation consoles from both Sony and Microsoft will be announced at the E3 show in Los Angeles in June, with a view to launching before next Christmas. Nintendo has already said it will launch its new Wii U this year. And although gamers may well put their purchases on hold ahead of the new equipment, it could have a positive effect in the medium term. Analysts at Espirito Santo said:
The source of this rumour is not given. The rationale is understandable, in terms of keeping pace with Nintendo, which has already announced that it will launch Wii U this year. Microsoft's Xbox was launched in 2005 and Sony's PS3 in 2006, so this has been a very long cycle. However, next generation consoles were not widely expected this year since the full potential of the existing models has not yet been exploited. The key question here, if these rumours are true, is whether consumers are ready to ditch their old models. In that context, we need to understand what innovation the next generation will bring. From Game's perspective, there is usually a hiatus ahead of a new launch and gamers wait for the new model. However, the games market does need some kind of catalyst to spark demand and this could be it. Too early to get excited yet, but worth monitoring.
Game's shares are steady at 6.9p.
