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GAME Digital plays the long one with Belong
Video games retailer Game Digital posted a 25.5% decline in pre-tax profits across its first half of trading as as a result of greater investment into its expanded e-sports offering.
Game's pre-tax profits fell 25.4% to £12.3m over the six months leading to 27 January, despite revenue increasing 3.9% to £517.4m, as declining UK retail sales were somewhat offset by growth seen in Spain and at its events, e-sports and digital division.
The Hampshire-based company, which has been focused on expanding its e-sports offering with ideas like its Belong in-store gaming arenas that allow customers to pay-to-play games on its PCs and the latest consoles, also entered into a deal with Sports Direct to roll-out Belong gaming across a number of its UK stores.
As a result, Sports Direct has agreed to pay £3.2m in cash for 50% of Belong's intellectual property and half of the profits generated at its new and existing locations.
Game Digital, which has also begun to pivot away from its more traditional brick and mortar stores to capitalise on a growing shift away from buying video games in store to making purchases online, assured investors on Tuesday that Belong would lead to a more successful performance in the year's following its 2019 trading year.
Game closed a dozen stores in Britain and three in Spain during the first half.
Cash and equivalents rose 16.3% to £84.9m.
Earnings per share dialled back to 5.4p each from the 7.7p per share posted a year earlier.
As of 1420, shares had jumped 21.83% to 29.24p.