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(Reuters) - Video games retailer Game Digital Plc (L:GMDG) said it expected first-half profit to fall due to challenging trading conditions and disappointing sales since the start of school Christmas holidays.
Shares in the company fell as much as 42 percent to 120 pence, to trade well below the 200 pence at which it went public last year.
Adjusted earnings before interest, tax, depreciation and amortisation are expected to drop to about 30 million pounds for the 26 weeks ending Jan. 23, the company said on Wednesday.
It reported adjusted core earnings of 43 million pounds last year.
"The switch over from the older gaming formats to PlayStation 4 and Xbox One software has impacted profitability across the UK market," Chief Executive Martyn Gibbs said in a statement.
Game Digital posted a 13.5 percent fall in video games sales in the UK market for the 21-week period ended Dec. 19.
"Game is just heading into its peak sales period, so this is a particularly disappointing update," analysts at Canaccord Genuity wrote in a note.
The brokerage cut the target price on the stock to 183 pence from 270 pence.
Game Digital's shares were down 40.7 percent to 122 pence at 0810 GMT on the London Stock Exchange.