Consumers appear to have taken refuge from the credit crunch in fantasy, to judge from the latest trading update from computer games retailer, Game Group.

As traditional high street retailers reel under the impact of the credit crunch, Game Group said today that it would beat expectations in the first half of the year due to strong growth in the PC and video games market which has been helped by a raft of hit game releases.

The company said the "unusually strong" release schedule which has seen Grand Theft Auto IV, Nintendo’s Wii Fit, Mario Kart and Metal Gear Solid 4 hit the shops within weeks of each other would mean that half year profits would be at least £33 million, compared with £2.7 million at the same point last year.

Game Group, whose shares fell 18.5p to 243.75 this morning, is now worth £834 million - more than double the value of Taylor Wimpey, Britain's biggest housebuilder by volume.

Lisa Morgan, chief executive of Game Group, said: "We can't say that we are immune to the wider economic circumstances but we have not seen any impact in the first half of the year."

"Games are incredibly popular at the moment and the unprecedented set of releases we have seen this summer has been driving demand," Ms Morgan said.

There are fears that it will be difficult for Game Group to repeat such a performance in the second half of the year, but Ms Morgan said that there had been a shift in the market, with video publishers producing more titles to take advantage of the growing base of game consoles.

Another strong line up of releases is due to come out in time for Christmas, including Gears of War II, which should bolster the second half.

Demand for consoles also shows no sign of waning, the group added, as UK like-for-like sales rose 28.1 per cent in the 22 weeks to June 28. Total group sales were up by 54 per cent.

Game Group's update was well-received by analysts. David O’Brien, at Altium Securities, said: “One word can describe the latest trading update - wow!”.

Nick Bubb, the retail analyst at Pali International, said: "This cycle is completely different to any other cycle, given the much broader and deeper range of formats and consumers involved. The games market boom is likely to continue."

"As and when things do slow down in the US market, the US giant Gamestop is bound to look overseas for more growth and will bid for the UK market leader Game, so that prospect is massive under-pinning for the GMG share price in the medium term, even if the short term is volatile."

Separately, Nintendo's Wii game console outsold Sony Corp’s PlayStation 3 for the seventh consecutive month in Japan in June, a game magazine publisher said. Nintendo sold 235,990 units of its Wii console in the five weeks ended June 29, while sales of the PS3 came to 139,494 units.

Times Recommends

• B&B hit by £18m fraud charge
• Mortgage rescue fund at the ready
• Zoom airline collapses and halts all flights