Video game company Game Digital is "shifting its focus" to esports in a "bid to tap into an increasingly lucrative industry," according to Giles Turner of BLOOMBERG. The push toward egaming comes as Game Digital posted sales of £891.7M ($1.14B) for the year to July 29, down 2.3% on the year. Shares of Game Digital, based in Basingstoke, England, rose as much as 42.13% early Tuesday in London, the "highest since listing" in '14. Online gaming has become a "fast growing and increasingly lucrative sport." In August, the annual "Dota 2" int'l event "broke the record for the largest prize pot" in esports, with Europe's "Team Liquid" winning the first place prize of $10.8M. Game Digital has been "struggling with the rise of online stores" and what it has described as a "challenging trading environment." On June 20, its shares dropped 24% after it "warned that annual sales growth would be below target." Earlier this month, the company revealed that Sports Direct had bought a 26% stake (BLOOMBERG, 8/23). In London, Sam Dean reported Game Digital said that it was further prioritizing its esport activities after a review, and was "evaluating strategic options" for its Multiplay Digital division, which hosts servers for gaming. The suggestion that it may sell the division "helped send shares soaring," with Liberum analyst Adam Tomlinson saying that it would be a "sensible" move. Last year, Game Digital launched its Belong "gaming arenas," and now has 18 Belong sites "where customers compete against each other on consoles within the store" (TELEGRAPH, 8/23).
British advertising company WPP shares had their "biggest drop in 17 years" after the company "cut its full-year revenue forecast amid lower spending by customers, in particular consumer-goods manufacturers," according to Joe Mays of BLOOMBERG. The stock fell as much as 13% after WPP said that "like-for-like revenue growth is expected" from 0-1% in '17, down from an earlier 2% forecast. Ad companies worldwide are "being hit" as big clients like Unilever and Proctor & Gamble "focus on cost-cutting to cope with sluggish global economic growth and technological disruption." WPP "singled out ad spending on consumer goods" as "coming under particular pressure." Unilever, one of WPP's biggest customers, said earlier this year that it would "cut ad output" by 30% and "halve the number of creative agencies it works with to 1,500 from 3,000." That followed a "failed takeover bid" by Kraft-Heinz. WPP CEO Martin Sorrell said, "That sent a shock-wave through the industry. It obviously had an effect in terms of people spending, particularly in the packaged goods sector." WPP, which also works for brands such as Ford and Marks & Spencer, has already seen its shares fall 12% this year through Tuesday "amid a difficult economic climate and pressure on its businesses in North America." It is now down more than 20% year-to-date. Its biggest rivals, including Interpublic Group, Publicis Groupe and Omnicom Group, are "each down" more than 8% this year. WPP shares on Tuesday fell as low as 1,382 pence and were down 11% to 1,420 pence on Tuesday afternoon (BLOOMBERG, 8/23).
European esports organization G2 Esports has taken on outside investors for the first time, raising an undisclosed sum from a group that includes Barcelona midfielder André Gomes; Marc Lemann, co-founder of Brazilian sports agency Go4It; multicultural media company MACRO Ventures and Everblue Management, the private family fund of Eton Park Capital Management Founder Eric Mindich. G2 will use the money to hire players and fund content creation and brand initiatives. Also, Inner Circle Sports has been hired as a strategic adviser as G2 continues to evaluate prospects (Ben Fischer, Staff Writer).
A "gamble" by online betting group GVC that it could secure a takeover of Ladbrokes Coral with an offer believed to be worth as much as £3.6B ($4.6B) "failed to pay off, as the two companies ended talks in recent weeks." GVC approached Ladbrokes Coral with an offer that "would have created one of the world’s largest gambling companies," according to people familiar with the matter. However, discussions "ended amid disagreement over the value of each of the companies" (LONDON TIMES, 8/23).