Analyst: GAME could lose £2 million over ME3 siutation

Friday, 2 March 2012 09:57 GMT By Johnny Cullen

Not stocking Mass Effect 3 could cost GAME as big as £2 million, one analyst has said.

Speaking to The Guardian, Singer Capital Markets’ Mark Photiades said the retailer could see an added £6-£7 million lost in revenue.

“Working on the assumption that a decent triple-A title sells 0.8m-1m titles in the first few weeks of release in the UK and assuming GAME has around 20 per cent share, we calculate that by not stocking Mass Effect 3, GAME is potentially missing out on around £6m-£7m of revenues in the UK given the title will retail for £39.99,” he said.

“With new software margins of around 24% this could result in £1.5m-£2m of lost gross profit in the current year. It is also worth noting that margins will suffer as a result of the reward card points being offered in compensation.

““We estimate this could amount to another £0.3m of forgone gross profit as typically pre-orders account for around 30% of initial sales. So in total there could be £2m-£2.5m of lost UK profit in a year where we are already forecasting losses of £8m.

“This latest development is further evidence of just how tough the situation is for GAME right now. The focus very much remains on pure survival as opposed to revival at this stage.”

The shop announced earlier this week it would not stock the game, with other EA games affected in some form, continuing its ongoing woes that emerged last month.

The BioWare RPG launches next week for PS3, 360 and PC.