Mike Ashley’s Sports Direct has bought half of Game’s esports division and plans to install gaming concessions across its estate.
The £3.2 million deal will see the video game retailer hand over a 50 per cent stake of its new Belong esports division to Sports Direct, who now holds a 26 per cent stake in Game.
Alongside plans to roll out concessions, which will see competitive video game arenas pop up inside Sports Direct stores, it will provide £55 million of borrowing to Game’s Spanish arm in order to fund the expansion of more arenas.
Game has begun to invest increasingly in its esports division over the past year, seeking to decrease its reliance on retail sales which remain at the whim of triple-A title and console releases.
Investors welcomed the new deal and shares rose 12 per cent to 42.2p in morning trading.
“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,” investment bank Liberum’s analyst Adam Tomlinson said.
“More details are needed to fully assess the value of the opportunity ahead, but we see today’s announcement as a clear positive overall.”
Game’s chief executive Maryn Gibbs added: “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.”