Pre-tax profit fell to £12.3mln in the six months to January 27 from £16.5mln the same period a year ago.
Revenue increased 3.9% to £517.4mln from £498.1mln as a decline in UK retail sales was mitigated by growth in Spain and in the events, e-sports and digital division.
The company has been expanding its e-sports offering with its Belong in-store gaming arenas, which allow consumers to pay to play games on PCs and the latest consoles.
Game Digital has entered into a deal with Sports Direct to roll-out Belong gaming across a number of stores. Sports Direct has agreed to pay £3.2mln in cash for 50% of Belong's intellectual property and 50% of profits from new and existing locations.
Game Digital said Belong will lead to a more successful performance in fiscal year 2019 and beyond.
The company has also been repositioning the business in response to a growing shift away from buying video games in store to making purchases online. It closed 12 stores in the UK and three in Spain during the first half.