GAME Digital may be slowing down the launch of its esports arenas as it looks to continue with the success of the Nintendo Switch.
Martyn Gibbs, CEO, GAME Digital elaborated on the company’s recent source of income: “Strong customer demand for consoles (particularly Nintendo Switch) [and] a stronger line-up of new software releases.”
For the first six months of the Switch being released, GAME’s revenue saw a significant boost. The company’s revenue grew 3.7%, reaching £517,000,000, though pre-tax profits fell by 25% to £12,300,000. Despite the latter, shares in the company drastically improved too, rising 25% to 30p – mainly due to strong growth in sales in both the United Kingdom and Spain.
This growth is obviously great for the company, but subsequently it may have slowed down its focus on bringing Belong to more towns and cities. GAME wants to have 100 esports arenas rolled out in three years, allowing civilians who may not be familiar with esports to game competitively against each other. In February 2018, Sports Direct acquired 50% of the rights and profits for this venture.
Nonetheless, GAME has made it known there will be a “small delay in the anticipated earnings growth” from Belong as it hunts for larger spaces to place its arenas so it can include “more gaming stations per arena.”
As a result of the console market being struck by Nintendo Switch, and with new competition coming in the second half of the year, the company explained that “even greater priority has been placed on efficiency and cost saving actions that the directors believe will largely offset this impact.”
Esports Insider says: There are both positives and negatives to take away from GAME’s revenue and profits, but the link up with Sports Direct for some capital to reach its 100 esports arenas goal makes sense. The plan to be patient to ensure they can occupy larger spaces for the arenas is a smart move too.