HMV will exit 60 UK stores this year in an attempt to cut costs.
The move follows a 13.6 per cent reduction in like-for-like sales for the five-week Christmas period. HMV blamed weak underlying entertainment markets and frozen Britain for the poor sales.
HMV has in recent years become one of the UK's premier videogame retailers.
It's contemplating selling second-hand games online this year. It already offers a trade-in service in-store, called Re/Play.
"We don't sell used games online at present, but it is something that we are considering for 2011," HMV's Martin Baxter said last month.
CEO Simon Fox said: "Whilst HMV has had a challenging year to date, it remains a profitable and cash-generative business and a powerful entertainment brand. The pace of change in the markets in which we operate underlines the urgency with which we must continue to transform this business."
HMV owns book shop Waterstone's, which is said performed better.
"Progress at Waterstone's this year has been pleasing, and we remain on track to meet our business and financial objectives for the end of the first year of our turnaround programme," Fox added.