A WORLDWIDE shortage of the slimline version of PlayStation 2 consoles in the festive run-up devastated sales at Hampshire-based computer company Game.

Thousands of parents in the south were left disappointed as they shopped in vain to buy the equipment for their children for Christmas.

Like-for-like sales collapsed by 20.4 per cent in the eight weeks to last Saturday following the "unprecedented breakdown" at Europe's biggest retailer of computer games.

Game, which has its headquarters in Basingstoke and has 398 stores in the UK, including four in Southampton and 224 more worldwide, was forced to trade for more than half the run-up to Christmas with no PS2 consoles in its stores. However, its shares rose eight per cent yesterday as investors expressed relief that the sales drop was not worse and that a rapid change in trading strategy had worked.

Chief executive Martin Long, 37, who hails from near Southampton and is a familiar figure in local business functions, said: "We had customers calling us daily to find out the latest position on hardware and checking the messages that we put on our website.

"When we got deliveries (of PS2) we were selling out within one or two days." He estimated that the group lost "tens of millions" of revenues from the shortage of PS2 consoles, with sales of accessories such as memory cards also lower.

Executives reacted by launching a string of promotional offers on software titles, such as multi-buy deals involving new titles like GTA: San Andreas.

Alternative hardware such as the Xbox Crystal console, the Game Cube and Gameboy Advance SP from Nintendo were also pushed to the front of stores.

A strong third quarter meant it expected to post full-year profits in the region of £32.2m - in line with the market consensus that emerged once Sony flagged the supply problems of PS2 in early November.

A tight grip on costs and the amended trading strategy helped to drive margins, which were expected by Game to be higher than a year earlier.

Evolution Securities analyst Assad Malic said: "The share price recovery shows it's not been a total disaster."