Morrisons is starting a bloody price war

Morrisons’ eyebrow-raising deals on video games this week could force prices down at GAME and start a ‘bloody war’ according to the national press.

Games on offer at the supermarket include Mercenaries 2 on Xbox 360 for 25, Spore Creatures for just 12.99 and Tiger Woods PGA Tour ’09 All Play for 15.

Altium Securities’ analyst David O’Brien told The Guardian:

"The opening salvo in what could turn out to be a very bloody war was fired yesterday by Morrisons. Game Group has a price promise and as a result will be forced to match the levels offered by the food retailer.

"We think it highly likely that other retailers will follow suit in the run-up to Christmas, resulting not only in Game Group being forced to price match but also to increase its promotional spend in the press and on TV.

"Our expectation is that little help will come from hardware sales, as Microsoft has just reduced the entry price of the Xbox 360 to $199 (115), with Sony likely to follow suit.

"We think the above combination is likely to result in a reining in of profit estimates closer to Christmas."

Game’s share price has fallen over six per cent since Monday, down from 259.75 pence 243.50 pence.