Surging sales of the latest generation of video games consoles sent shares in Game Group, the specialist retailer, to a 20-year high this morning.

Sales for the 22 weeks to the end of June were up 74.1 per cent on the same period a year earlier, the group said, boosted by strong demand for Nintendo’s Wii machine, the release of the PlayStation 3 and the acquisition of Gamestation from Blockbuster, the video chain, this year for £74 million.

Like-for-like sales were up 45.6 per cent. Excluding the effects of the PlayStation 3, revenues were ahead 24.6 per cent.

The group said in a trading statement: “We look forward to the second half of the year and the key Christmas trading season with an unprecedented range of products available.”

KBC Peel Hunt, the broker, said: “The market is being stimulated by the largest number of consoles ever in a cycle and broadening demographic base. Game is ideally placed ... and is growing its presence in Europe.”

The group is estimated to have about 25 per cent of the market for consoles and software in the UK. It is expanding in Europe and plans to open about 50 stores before Christmas, most overseas, to add to its current 1,050.

The stock was up more than 8 per cent in mid-morning deals, at 197p, valuing the company at about £680 million.

The shares earlier hit a high of 198p, their highest level since 1987.

However, full-year margins are expected to be 2.5 per cent lower than last year, hit by increased sales of low-margin games machines and competition among British retailers.

The retailer added: “The PC and video games market has grown strongly in [the first half] ... Consumer demand remains strong for all formats, particularly for the Nintendo Wii.”

It added a note of caution, however, saying that it stood to face increased competition from retailers moving into the £15 billion global market for games machines and software.

“The UK trading environment ... continues to be very competitive with retailers expanding their PC and video games offer to capitalise on the growing market,” it said.

Game Group said that it expected to make a first-half pre-tax profit of between £1 million and £3 million.

Explore Industry Sectors

• Banking & Finance

• Construction & Property

• Consumer Goods

• Engineering

• Health

• Industrials

• Leisure

• Media

• Natural Resources

• Retailing

• Support Services

• Technology

• Telecoms

• Transport

• Utilities

Times Recommends

• B&B shareholders forced into funding rescue
• John Lewis department store sales plunge 8.3%
• Families turn to credit to cover mortgage bills