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Game Group Seeks More Web Sales, Set to Reduce Margin

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Feb. 16 (Bloomberg) -- Game Group Plc, Europe’s biggest electronics-games retailer, said it’s seeking more online and digital sales, a step that will lower gross margin.

Game also wants to improve integration between its websites and stores, and bring more customers to its shops, the Basingstoke, England-based company said in a statement.

Game plans to expand digital and mobile-phone sales, even as it builds sales of products in its stores, executives told analysts at a presentation today in London. Even in 2015, 75 percent of U.K. game-industry sales will still be gaming software and consoles, the company said.

“The games industry is changing, and we will be focused on reinventing ourselves to follow our customers,” Chief Executive Officer Ian Shepherd said.

In December, Game said margins are narrowing as consumers seek bargains in the wake of discounting at competitors such as supermarkets and Amazon.com Inc. The new mix of sales will cost it about 1 percentage point in gross margin in the year ending January 2012, the company said today.

Digital sales, which represented about 2.5 percent of revenue in 2010, should triple this year, Shepherd said. The company hopes to double sales of own-brand accessories, he said.

Game is experimenting with offering mobile-phone downloading of games in outlets, Shepherd said. Customers will be able to order products in stores they can have delivered to their home, and pick up orders in stores, he said.

To contact the reporter on this story: David Altaner in London at daltaner@bloomberg.net

To contact the editor responsible for this story: Colin Keatinge in London at Ckeatinge@bloomberg.net