UK-based esports and gaming company Gfinity has announced the closure of its esports division due to its directors seeing ‘limited profitable growth opportunities’.
The decision to shut down its esports division comes shortly after Gfinity closed the Gfinity Arena in London earlier this year. However, at the time, the company stated that it would use another venue in the United States for production and live events through a partnership with an unnamed company.
Gfinity’s departure from esports was hinted at slightly when the company revealed in the February report that it looked to “rebalance the company’s revenue sources, with less dependence on esports services/operations”.
Up until recently, Gfinity was a staple of UK esports production and live events. The company created the Gfinity Arena in 2015 and held a variety of notable tournaments, ranging from grassroots to professional play. This included multi-title competition Gfinity Elite Series, the F1 Esports Series and HCS London 2018, among others.
The announcement also states that Gfinity will divest 72.5% of its subsidiary Athlos to Tourbillon Group UK Limited. As a result, all future liabilities associated with the tournament platform will be assumed by Tourbillon.
According to the company, the divestment will significantly reduce Gfinity’s cash burn. In 2022, up until December, Athlos generated £400,000 in revenues with a net loss before tax of £500,000. By May 2023, Gfinity stated that the platform had absorbed £1.5m of its cash.
Following its divestment and closure of esports operations, Gfinity will instead focus on digital media, particularly within the gaming industry. Following a dip in users in 2022, the company revealed that it performed cost cuts in this division. This included ‘streamlining’ its editorial team and bolstering its SEO with specific hires.
The filing revealed Gfinity has relied on the use of AI to reduce the cost of certain items of content creation. In the announcement, Gfinity claims that this has delivered an ‘upturn’ in May 2023.
Currently, Gfinity has cash reserves of £400,000, the same amount as what was reported earlier in the year.
Gfinity Chairman, Neville Upton, commented: “This has been a difficult year for digital media with the company having losses across all verticals, however after a significant re-structuring, we are confident that Gfinity will flourish without the requirement to raise further working capital.”