The success of gaming gadget the Nintendo Switch is helping drive a turnaround at retailer Game Digital after it slumped to a £10 million annual loss.
Game said the UK console market returned to growth after two years of declines in the second half of its financial year to July 29 thanks to surging demand for the Nintendo Switch.
It added that the bounce back had continued, with sales in the first 15 weeks of the new financial year also ahead of its expectations.
But the recent sales rebound was not enough to offset a dismal first half for the group, which saw it swing to a £10 million annual loss from profits of £1.1 million on a comparable 52-week basis.
It saw UK retail underlying earnings slump 89.8% to £1.8 million after retail sales by gross transaction value tumbled 13.4% over the year.
But Game gave hope that its trading woes are behind it, with retail sales in the first 15 weeks of the new financial year up 1.8%.
Martyn Gibbs, chief executive of Game, said: "After two years of declines, our core UK console market returned to growth in the second half of our financial year on the back of the launch of the Nintendo Switch."
He added: "Whilst we remain mindful of the structural headwinds that remain in our core markets, we expect recent positive market dynamics to continue into our peak Christmas trading period."
The brighter sales outlook comes as welcome respite for Game, which was forced to warn over profits in June when it was hit by challenging high street trading and poor initial stock availability of Nintendo Switch.
Despite the supply issue, the Nintendo Switch launch has helped breathe new life into the market.
It is expected to be one of the best sellers this Christmas, while Game is also putting faith in strong demand for the recently launched Microsoft Xbox One X.
Game - in which Mike Ashley's Sports Direct holds a 26% stake - is also leading a push into e-sports and live gaming to reduce its reliance on the volatile console market.
It said this division saw strong annual growth after sales more than doubled - up 116.4% to £13.2 million.
It has previously said it wants to tap the "significant potential" of the group's e-sports activities, where professional gamers battle it out in front of crowds at events such as Insomnia.
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