Sports Direct buys 50% of GAME's esports arenas in £3.2m deal
Belong arenas to appear in Sports Direct stores, with additional £55m in loans
Sports Direct has increased its relationship with GAME by acquiring 50% of Belong.
Belong is the name of the in-store areas that exist within selected GAME stores. These are places where gamers can pay to participate in a series of local competitive multiplayer PC games. GAME views them as a key part of its future as the games industry becomes increasingly digital.
Sports Direct has acquired 50% of the rights to the Belong IP for £3.2m and will take a 50% share of future profits from Belong.
The sports retailer has also entered into a loan agreement with GAME where it will provide £55m in capital. This money is to accelerate the roll-out of Belong and GAME Retail stores into some Sports Direct shops across the UK. The money will also be used for new ventures and the development of the Belong website.
GAME opened 19 Belong stores so far, and said it will open 35 by the end of its next financial year. It's not clear if this new deal will accelerate that roll-out.
In July year, Sports Direct acquired 26% of GAME after its share price plummeted amid growing concerns for the retailer. However, the share price has rallied slightly and the video game chain has posted improved financial results since then.
"I am delighted that through the Collaboration Agreement we are able to accelerate the implementation of a key element of our transformational strategy to move from a seller of physical products to providing gaming experiences," said GAME CEO Martyn Gibbs.
"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. We look forward to collaborating with Sports Direct to increase the availability and scale of Belong and to capitalise on the increasing overlap between sports and esports fans by bringing this unique experience to a wider consumer base."
Sports Direct CFO Jon Kempster added: "We are very happy to partner with GAME in building an increased presence in the esports market through the Belong brand. This is a very good example of building a commercial relationship via our strategic investment approach."