The boss of retailer Game appears to have backtracked on his rescue plan to make £100m from marketing to Reward Card members by claiming the only thing that will boost the firm – and the industry at large – is more game consoles.
After a 17.6% slump in sales over Christmas, Game admits that it might not meet some of its EBITDA (earnings before interest, taxes, depreciation and amortisation) covenants. But chief executive Ian Shepherd claims that the market will grow with the arrival of new hardware.
He said: “The weakness in the overall numbers was partly driven by the economy and consumer confidence issues. It was also driven by where we are in the hardware cycle. The hardware market was much more negative than the software market. That tells you the industry and the consumer is ready for more innovation there.”
But with updates to the PlayStation and X-Box still a long way off – PlayStation 4 is not expected until at least 2015 – Shepherd’s call is likely to fall on deaf ears.
It appears a far cry from his predictions when revealing 2010 results last February. At the time Shepherd, a former head of customer marketing at BSkyB, said: “In the UK in 2010 how many bespoke user communications did we employ? Around 500,000. This year the target is 12 million. The total amount of money we made across the Group by stimulating customers with communication was less than £5m. By 2013 that will be more than £100m, and we will deliver on that number.”
