A shortage of Playstation 2 game consoles caused sales at computer game retailer Game Group to drop over Christmas. But the company said yesterday that its results will be in-line with expectations as it managed to pick up higher-margin software sales.

Chief executive Martin Long said the company had suffered from a dearth of Playstation consoles over half the festive trading period and as a result Game suffered a dip in sales.

"That product was probably high on the Christmas lists of lots of people," he said. "We got to the point where people had to take up other gift options."

In the autumn, Sony dropped the price of its PS2 console to under £100 and then introduced a slimline version of the popular piece of hardware in November. The console flew off the shelves, but restocking was hampered by what Sony termed "supply chain issues" in Asia.

Game Group, which has 570 stores across Europe, said yesterday that during the six week period to January 8 total sales were down by 9.8% and down 17.1% on a like for like basis because of the lack of PS2 consoles.

While total sales in continental Europe were up by 22.6% and like-for-like sales up 2.7%, in the UK and Ireland total sales were down 15.1% and down 20.4% on a comparative basis.

But the company added that it expects a "satisfactory trading outcome" for the year as a whole because sales of new games such as Grand Theft Auto: San Andreas and Halo 2 picked up the slack. The company makes better margins on the sale of software than it does on sales of hardware.

Shares rose 4.25p to 66.5p, valuing the business at £226m, as Game added that its performance in the second half will be around 10% ahead of the same period last year. Last year it generated an operating profit before exceptional and accounting charges of £32.4m.