Electronics Boutique (EB) is continuing to suffer from cut-throat competition in the games market after revealing a profit slide to £2.8m for the year ended 31 January, compared with profit of £15.3m in 1999.
The retailer's turnover rose by 57 per cent, from £159m in 1999 to £251m, but profit took a nose-dive because of a six-month price war and costs related to the acquisition of rival Game last May.
Peter Lewis, EB's chairman, said: "We completed the integration of Game in time for the vital Christmas season, only to be plunged into the heaviest price discounting war in the history of this industry.
"Last year, PlayStation software titles were subject to heavy discounting during the peak Christmas season as we saw retail prices on this format fall by 25 per cent overnight."
This year, EB's unit sales exceeded the previous year's figures by 13 per cent. However, like-for-like sales fell by 18 per cent, which led to a four per cent decrease in sales during the Christmas period.
Lewis claimed the company's financial prospects for this year look good, thanks to a number of significant deals with MSN UK and Sky's interactive Open channel.
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