Specialist gaming products play GAME Digital's (GMD) dire run continues, shares marked down a further 6.9% to 68p following another round of earnings downgrades.

GAME Digital guides towards lower sales of £815 million (2015: £866.6 million) for the year to July, the tough domestic market conditions encountered in the first half having continued in the second.

Click here to read today's pre-close trading update from GAME Digital, returned to the stock market in June 2014. 'Market trends experienced in the first half of the year have continued into our second half, with a challenging UK trading environment set against good growth in Spain,' laments the Martyn Gibbs-guided retailer.

EDITORIAL USE ONLY Zohair Ali from London is first in the queue to pick up a copy of Grand Theft Auto V at the flagship GAME store in Westfield Stratford City in London, which opened at midnight so fans could get a copy the moment the game was released.  PRESS ASSOCIATION Picture date: Monday September 16, 2013  Photo credit should read: David Parry/PA Wire

While the Spanish business traded well, a soft pipeline of new games and the footfall-dampening impact of poor weather hurt the UK business in the second half. Sales of both mint and pre-owned games remained soft last year, with healthy growth in pre-owned technology products and its 'Accessories, Toys-to-Life and Other (AT&O)' category insufficient to make up the shortfall.

Costs have also risen, reflecting growing investment behind Multiplay, GAME Digital's specialist game server hosting business. Combined with the soggy sales performance, this leads Canaccord Genuity to cut its year-to-July 2016 pre-tax profit and earnings per share estimates from £20.6 million and 9.3p to £16.5 million and 7.3p respectively and its price target from 92p to 72p.

'We are encouraged by the strong line-up of highly anticipated new products scheduled for launch over the next 12 months including, amongst others, PlayStation VR, Oculus Rift, Xbox One S and Nintendo NX,' says GAME Digital, which is also cutting costs across its UK store estate.

'These exciting developments will provide further opportunities to engage with both existing and new customers. However, the Group needs to balance these developments against the prevailing conditions in our markets. Accordingly, at this stage we retain a cautious sales outlook for our retail markets in the year ahead. Overall, the Board plans to deliver an Adjusted EBITDA for FY16/17 broadly level to the current year (on a 52 week basis), before the financial impact of its planned new live gaming activities.'

Web chart - GAME DIGITAL - Aug 16

Following this latest GAME Digital profit warning, Canaccord Genuity also downgrades its July 2017 taxable profit and earnings estimates from £19.7 million and 9p to just £12.4 million and 5.5p. One major positive for GAME Digital is that net cash came in ahead of expectations at £40 million and it has also secured a £75 million, third party financing facility, that provides long-term working capital funding up to 2020.

Issue Date: 03 Aug 2016