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GAME eyes sale of Multiplay's Digital division as revenue improves

GAME's shares rose 30%

GAME saw its revenue for the second half of its financial year hit 325.4m, a rise of 6.8% over the same period the year prior.

That's a slight improvement on the profit warning it issued in July, when it estimated reduced growth of between 5 and 6%.

The growth comes from primarily the company's Spanish division, with its UK business seeing declines - although the UK arm also includes its esports, events and digital businesses, which are still fledgling businesses and will be impacting the overall results. The UK market is up 8.8% overall, while GAME's UK performance is down 1.3%. Its Spanish sales are up 23.1% year-on-year.

The company's full year (ending July 29th 2017) gross transactional value (GTV) sits at 891.7m, which is a 2.3% decline over the 912.6m posted the year before.

GAME is continuing to cut costs in its retail business, and today announces an intention to sell its Multiplay Digital division.

This division is based in the New Forest in Hampshire, and boasts multiplayer game server-hosting technology, which has been utilised in several high profile titles including Titanfall 2, DeFormers and Echo Arena. GAME says that the revenue from this division more than doubled from 2.1m to 4.5m in its last year. However, GAME has decided to focus on the development of its esports and live gaming initiatives, and improving the performance of its retail business.

The news this morning has seen GAME's share price rise more than 30%, after slumping to an all-time low in July - which resulted in Sports Direct picking up over 25% of the company.

GAME added that it is encouraged by the performance of its Belong retail concepts (gaming experience areas that are located in 18 GAME stores in the UK) and will continue to invest in this business as well as its consumer event Insomnia, all of which have been led by Multiplay's esports and events business.

As for the retail segment, GAME says it is optimistic about the period ahead based on the demand for Nintendo Switch and the upcoming launch of Xbox One X.

"GAME has made further progress in the second half of the year as we continue to focus on developing our strategic initiatives whilst creating a new cost base for our UK retail business to address the challenges in the UK console market," CEO Martyn Gibbs says in a statement.

"We have been encouraged by the recent growth in both the UK and Spanish markets overall and we expect that this momentum will continue into peak trading driven by the benefits of continued customer demand for the Nintendo Switch, the launch of Microsoft's Xbox One X and a strong line up of new games releases."

"GAME has now opened 18 Belong arenas, and we have seen encouraging early performance. We have reviewed our operations and are now accelerating development plans as we seek to fully capitalise on the strong growth potential in our exciting and growing esports activities."

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