By Loveday Morris

July 3 (Bloomberg) -- Game Group Plc, the U.K.'s largest video-games retailer, said sales growth accelerated in the second quarter as new releases including Nintendo Co.'s ``Wii Fit'' and ``Grand Theft Auto IV'' boosted revenue.

Sales at stores open at least a year rose 25 percent in the 22 weeks ended June 28, the company said today, faster than the 20 percent gain it reported for the first 13 weeks of the period. First half pretax profit will surge to at least 33 million pounds ($65.7 million) from 2.7 million pounds a year before, Game said.

Game Group fell 4.2 percent in London trading as some analysts said sales can't get any better. Releases including Take-Two Interactive Software Inc.'s ``Grand Theft Auto IV'' and ``Wii Fit'' went on sale in April, drawing shoppers even as higher fuel and food costs weigh on disposable incomes.

``Despite this continuing strong performance, the current gaming cycle is going to peak at some point, as it has done with previous console generations,'' Landsbanki Securities analyst Mark Photiades wrote in a note. ``The current cycle has been extended by the number of consoles available, and because the Nintendo Wii has attracted substantial numbers of non-core gamers to the market.'' Photiades has a ``reduce'' rating on the stock.

Game dropped 11 pence to 251.25 pence in London. The stock is little changed this year, the second-best performance in the 19-member FTSE 350 General Retailers Index, which has declined 41 percent.

Xbox, PlayStation 3

``People are increasingly starting to look toward the down cycle,'' said Numis Securities analyst Andrew Wade. ``As we move toward the down cycle, the stock will gradually be de-rated.''

Take-Two has said consumers purchased 8.5 million ``Grand Theft Auto IV'' units worldwide from the April 29 release through May 31, helping U.S. video-game sales gain 41 percent in the month.

Same-store sales in the U.K. and Ireland climbed 28 percent in the 22 weeks, while revenue at international stores open at least a year rose 17 percent, Game said. Growth was slower outside the U.K. because of an ``insufficient'' supply of Nintendo products, particularly in Spain, the retailer said.

Software sales are increasing while demand for consoles including the Wii, Microsoft Corp.'s Xbox and Sony Corp.'s PlayStation 3 continues, Game said. Rising sales of games, which are more lucrative than consoles, will help the gross margin to widen by between 0.5 and 1 percentage point this year, Game said.

`Brain Training'

``The bears keep expecting Game's fantastic sales growth to slow down, but it never does,'' Pali International Ltd. analyst Nick Bubb, who doesn't rate the stock, wrote in a June 30 note.

Video games have moved beyond the stereotypical audience of teenage males to become a mainstream product, aided in particular by Nitendo's Wii and DS Lite, the company says. Games developed for the DS Lite include ``Dr. Kawashima's Brain Training,'' a series of tests and puzzles intended to stimulate the brain.