Gfinity Shifts Gears and Closes Esports Division
Gfinity, the prominent UK-based esports and gaming company, has made the surprising announcement of shutting down its esports division. The decision comes as the company’s directors identified limited profitable growth opportunities within the sector. This move follows the closure of the Gfinity Arena in London earlier this year, where the company had previously hosted a range of tournaments and events.
In February, Gfinity had already hinted at a shift in focus away from esports, expressing its intention to rebalance revenue sources and reduce dependence on esports services and operations. The recent decision to close the esports division is a further indication of the company’s strategic realignment.
Gfinity, known for its contributions to UK esports production and live events, played a significant role in developing the industry. Since its establishment in 2015, the company has organised various notable tournaments, catering to both grassroots and professional players. These included the Gfinity Elite Series, the F1 Esports Series, and HCS London 2018, among others.
Alongside the closure of the esports division, Gfinity also announced its plans to divest 72.5% of its subsidiary, Athlos, to Tourbillon Group UK Limited. This transaction will transfer all future liabilities associated with the tournament platform to Tourbillon. By doing so, Gfinity aims to significantly reduce its cash burn. Athlos, which generated £400,000 in revenues but experienced a net loss of £500,000 in 2022, had consumed £1.5 million of Gfinity’s cash by May 2023.
With the divestment and the closure of its esports operations, Gfinity will redirect its focus towards digital media, particularly within the gaming industry. The company experienced a decline in users in 2022, prompting cost-cutting measures within the digital media division. These measures included streamlining the editorial team and making strategic hires to enhance search engine optimisation (SEO).
In a significant revelation, Gfinity disclosed that it had leveraged artificial intelligence (AI) to reduce the costs associated with content creation. According to the company, this approach resulted in an upturn in May 2023, providing optimism for its digital media endeavours.
As of now, Gfinity possesses cash reserves of £400,000, the same amount reported earlier in the year. Gfinity Chairman Neville Upton acknowledged the challenges faced by the company in the digital media landscape but expressed confidence in its ability to thrive without requiring further working capital following a substantial restructuring effort.
While Gfinity’s exit from the esports scene may disappoint fans and participants, the company’s strategic shift towards digital media signals a recognition of evolving industry trends and a determination to adapt accordingly. As Gfinity navigates this transformation, it remains to be seen how the company’s new direction will unfold and whether it can capitalise on the opportunities presented by the thriving gaming sector.
