Game Digital puts money on e-sports after upbeat results
SHARES in video game retailer Game Digital soared by 35pc yesterday as the company revealed better-thanexpected sales and hinted it may offload the digital branch of gaming events division Multiplay.
Sales in the second half of the financial year grew 9pc in the UK and 26pc in Spain as the company was boosted by the popularity of the Nintendo Switch console. However, full-year sales in the UK were still down by 7pc.
Shares in Game, which plunged by more than a third earlier this summer after it blamed a low supply of the Switch for its third profit warning in recent years, rose 8.6p to 33.25p yesterday. Two weeks after the profit warning, Mike Ashley, the Sports Direct boss, snapped up a 25.75pc stake in the retailer. The value of his holding has now climbed from around £10.7m to £14.6m.
In a strategic update, Game said it was further prioritising its e-sport activities following a review, and “evaluating strategic options” for its Multiplay Digital division, which hosts servers for gaming.
The suggestion that it may sell the Multiplay division was welcomed by analysts, with Adam Tomlinson from Liberum saying it would be “sensible”.
Game launched its Belong “gaming arenas” last year to capitalise on the growing popularity of e-sports and now has 18 sites where customers compete against each other on consoles within stores.
“It is intended that the group will focus management and capital resources on the acceleration of the development of the e-sports and live gaming initiatives,” the company said.
Overall, Game’s retail sales were up 0.1pc over the year, thanks to growth of more than 22pc in its Spanish division.