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		</div><p>Retailer GAME Digital became an early Christmas casualty on the UK high street as it warned over profits after being hit by weaker-than-expected sales of computer games.</p>
<p>The chain said sales of old-format games for PlayStation 3 and Xbox 360 consoles plunged by 56.7% in the 21 weeks to December 19.</p>
<p>Sales of games for Xbox One and PlayStation 4 consoles rose by a fifth, but this failed to offset the steep drop for the old format games.</p>
<p>It also saw UK sales of games consoles drop 28% to £98.7m, although it said margins on these sales are low and have little impact on overall trading profits.</p>
<p>GAME Digital said that while the next few days will be its busiest in the run-up to Christmas, the &#8220;recent trends and disappointing sales since the start of school Christmas holidays&#8221;, are set to see half-year underlying earnings fall to around £30m &#8211; a drop of 30% on a year earlier.</p>
<p>Chief executive Martyn Gibbs said: &#8220;The trading conditions in the UK video games market have been challenging.</p>
<p>&#8220;The switch over from the older gaming formats to PlayStation 4 and Xbox One software has impacted profitability across the UK market.</p>
<p>&#8220;The extent of the impact of this switch over has only become apparent in December, which has been compounded by lower year-on-year high street and shopping centre footfall.&#8221;</p>
<p>Shares in GAME Digital, which floated in June last year, plunged more than 40% at one stage after the profit warning.</p>
<p>This came despite assurances from the group that it is still hoping for a stronger second half of its financial year, with sales of software for Xbox One and PlayStation 4 expected to pick up, helped as well by sales of second-hand mobile phones and tablets.</p>
<p>Retail experts at Liberum said the first-half sales warning comes at the &#8220;most critical time of year&#8221; for GAME.</p>
<p>&#8220;While a decline in old format sales was expected, the scale has surprised the company while the importance of Christmas trading has hugely magnified the issue,&#8221; they added.</p>
<p>GAME said overall sales by gross transaction value dropped 11.4% in the UK over the 12- week period, despite strong Black Friday trading.</p>
<p>A better performance in Spain, where sales rose 8.1%, helped limit the overall drop in total group sales to 6.7%.</p>
<p>It marks the latest knock to the group in a chequered history that saw Game rescued from bankruptcy in 2012.</p>
<p>Then called Game Group, the firm was one of the high-profile high street collapses following the financial crisis.</p>
<p>Administrators closed 277 of its 610 stores and it was then bought out of administration in April 2012 by OpCapita, an investment firm working for Elliott Advisors.</p>
<p>Elliott, which has retained a significant stake in the business, has since revamped and refocused the chain.</p>
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