Mike Ashley’s Sports Direct has tightened its hold on the video game world by upping its stake in Game and revealing plans to open ‘e-sport arenas’ in its stores.
The billionaire retailer already holds a 26 per cent stake in Game and has now picked up 50 per cent of the high street chain’s Belong e-sports division for £3.2 million it was announced on Monday.
E-sports involves professional gamers battling it out in front of crowds, with the top competitions such as League of Legends commanding huge cash prizes.
Game launched the Belong brand more than a year ago and has already opened 19 arenas
Game launched the Belong brand more than a year ago and has already opened 19 arenas – now Sports Direct wants a slice of the action and plans to open concession arenas in its own stores.
Game boss Martyn Gibbs said: ‘As more consumer focus and spend moves to experiences, we are well advanced in delivering unique, world class gaming at both local and national level.
‘Having launched the Belong brand just over a year ago, we have now opened 19 arenas and are very encouraged by the popularity and performance of these locations.’
Alongside the Belong stake, Sports Direct will also provide Game’s Spanish arm with £55 million of borrowing, which is available to use to fund the roll out of more arenas.
Shares in Game were up 12 per cent in morning trading to 42.2p while Sports Direct shares fell 1.55 per cent.
Adam Tomlinson, analyst at Liberum, said: ‘The potential to locate both Belong and Game retail stores in Sports Direct stores also improves Game’s ability to optimise its UK store base, where 221 lease events are due to occur in 2018.
‘More details are needed to fully assess the value of the opportunity ahead, but we see today’s announcement as a clear positive overall.’
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Game has had a difficult time of late and slumped to a £10 million annual loss in November, despite the success of gaming gadget the Nintendo Switch.
It saw UK retail underlying earnings slump 89.8% to £1.8 million after retail sales by gross transaction value tumbled 13.4% over the year.
The push into e-sports and live gaming aims to reduce Game’s reliance on the volatile console sales market.
Sports Direct has a number of stakes in other retailers such as Debenhams and French Connection.
Jon Kempster, Sports Direct’s finance chief, said: ‘We are very happy to partner with Game in building an increased presence in the e-sports market through the Belong brand.
‘This is a very good example of building a commercial relationship via our strategic investment approach.’