A controller for the new PlayStation 4 is on display at the Sony PlayStation E3 media briefing in Los Angeles. (Jae C Hong, AP, file)
London - Game Digital, the seller of Nintendo, Xbox and PlayStation consoles,
is shifting its focus to e-sports in a bid to tap into an increasingly
The push towards e-gaming comes as Game Digital posted a sales of
£891.7m for the year to July 29, down 2.3% year on year. Shares in Game Digital, based in Basingstoke,
England, rose as much as 42.13% early on Wednesday in London, the
highest since listing in 2014.
Online gaming has become a fast growing and increasingly lucrative
sport. In August the annual Dota 2 International event broke the record
for the largest prize pot in e-sports, with Europe’s ‘Team Liquid’
winning the first place prize of $10.8m. Thousands of gamers
watched live, while hundreds of thousands tuned in via Twitch, the
video-game streaming app acquired by
Amazon.com for close to $1bn in 2014.
Neil Campling, analyst at
Northern Trust, pointed out in a recent note that the final golf major
of the season - the US PGA - posted historically poor viewing figures
and although the prize pool was the tournament’s highest, it was less
than half the Dota 2 winnings. The PGA winner, Justin Thomas, took home
$1.9m. Team Liquid’s winnings were shared between five players
and their backroom staff.
Game Digital, historically a retailer selling consoles and computer
games, has been struggling with the rise of online stores and what it
has described as a “challenging trading environment." On June 20, its
shares dropped 24% after it warned that annual sales growth would
be below target.
However, the company has been focusing on reducing its retail
footprint, and since late 2016 has been launching gaming hubs, where
customers can play online games in-store, and take part in tournaments.
In August the company revealed that
Sports Direct International had
bought a 26% stake.
While focusing on e-sports and events, Game Digital is also reviewing
strategic options for the Group’s digital enterprise activities,
including Multiplay’s Digital division, which covers managed server
hosting, augmented reality and digital marketing.
Game Digital acquired
Multiplay for £20m in 2015. The new unit’s sales have
increased almost 50% to £7.1m over the past year.
Unlike the e-sports business, the Multiplay Digital division remains a
"Game has a significant opportunity to re-shape its retail footprint
and cost base over the coming year," said
Adam Tomlinson, analyst at Liberum, "which should help preserve cash and
allow further investment to develop longer-term opportunities,
including across its Events and e-sports division."
SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.
Read Fin24's top stories trending on Twitter: