Embattled retailer Game Digital is hoping the arrival of virtual reality devices like Oculus Rift this year will help it stem a sales decline that forced it to issue a profit warning just days before Christmas.

The retailer is hoping the arrival of VR in living rooms will open up a new avenue for its struggling business, which has been squeezed by the rise of online retailers like Amazon on one side and the popularity of mobile gaming on the other.

Despite this, Game was able to weather the tricky festive period, with gross transaction value, a measure of sales excluding taxes and other deductions, down 0.4 per cent the three weeks to 9 January. This was not as big a drop as the 6.7 per cent fall in the first 21 weeks of the full-year.

Whether Game can kick on and maintain momentum remains to be seen but chief executive Martyn Gibbs reaffirmed its commitment to “taking appropriate actions to respond to the market challenges” in the UK.

"Looking forward, we see a solid schedule of new games releases planned during the second half of our financial year,” he continued.

“We also anticipate that new technology releases this year, in particular the launch of Virtual Reality devices, will lead to increased consumer interest which will benefit Game as customers seek expert advice and specialist service."

The arrival of the $599-priced Oculus Rift later this year is tipped by experts to open up gaming to a whole new audience and is crucial in getting more people to buy into the tech initially. While not cheap, the hope is that there are enough games on it at launch to convince adopters its worth shelling out on and establish a new product category.