Game giant Electronic Arts (EA) has seen profits fall 91% ahead of new consoles due out later this year.
EA's catalogue is getting old, analysts warn
The firm said net profits for the three months to March were $8m (£4.2m), down from $90m the previous year, with profits for the full year dropping 13%.
EA made its name with sports simulations but also produces games such as The Sims.
The two biggest players in the games console business, Sony and Microsoft, are both releasing new models in 2005.
Neither the PlayStation 3 nor the Xbox 2 have release dates set yet, and analysts said gamers often held off on purchases in order to invest in software for new consoles.
PJ McNealy of American Technology Research pointed out that the slump was affecting the industry as a whole.
"These guys are the blue-chip company of their sector," he said.
"This is only proof that they are not immune to the down-cycle."
Growing competition and higher price-tags attached to lucrative licences for film and other tie-ins were also to blame for the shortfall, EA said - all factors which affect its competitors.
But some observers said EA would have to work hard to improve their product range.
"I think this is all catalogue-driven," said Michael Pachter, an analyst at Wedbush Morgan.
"I think their catalogue has got weak because they don't have as competitive a line-up for the last six months as they did in the past."