Game pins hopes on new consoles

The Sony Playstation 3 is due to be released in November

Computer games retailer Game Group has reported a plunge in annual profits but said the release of new games consoles should help sales this year.

Annual profits were £5.4m, down from £29m in 2005, as shoppers waited for the release of new consoles and prices of existing models fell.

Sales have now begun to pick up, Game said, following the release of the Sony PSP and Microsoft Xbox 360.

UK like-for-like sales were up 2.7% in the 12 weeks to 22 April, Game said.

"This was an immensely difficult transitional year and it is disappointing to report such a sharp drop in profits," said chairman Peter Lewis.

However, expectations of a pick-up in sales as the year progresses led Game to raise its dividend by 15%.

Sony is due to launch its Playstation 3 console in Japan in November this year, and Game said that the launch of the Nintendo Revolution is expected to be announced in the coming months.