Gfinity reports reduced operating loss in 2022 final year results

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London-based esports and gaming business Gfinity made an operating loss of £2m for its financial year ending June 30th 2022.

This is a reduction of 28% when compared to the loss it made one year prior: £2.7m.

Revenues for the latest year reached £5.3m, a decrease of 8%, but including a 33% increase in revenue attached to Gfinity’s owned audience, technology and esports properties.

Gfinity shares took a tumble after the news, dropping from around 1p on Thursday to 0.58p on Friday.

Gfinity’s digital media arm did well, reporting average monthly active users of 14.5m, a 36% year-on-year increase. Gfinity Digital Media is made up of 11 content websites including the likes of SiegeGG (acquired by Gfinity last year).

On the esports solutions side, once again Gfinity delivered the F1 Esports Series (won by McLaren Shadow and Lucas Blakeley), the V10 R League as well as solutions for brands including Coca Cola, Nintendo and Manchester United, and the Red Bull Home Ground in Manchester, won by 100 Thieves.

digital schoolhouse esports winners
The Gfinity Arena in London has been home to many tournaments over the years, including the Digital Schoolhouse Smash Bros finals, won by Norton College

Overall, across the esports solutions business, revenue fell 47% to £2.1m. Gfinity said ‘this reflected the revised phasing of the V10 R League programme, which had seen a greater concentration of activity in the prior year, but also a increased strategic decision to prioritise revenue streams attached to Gfinity’s owned intellectual property, which directors believe will give the business a greater chance of driving longer term, high margin revenue growth’.

Gfinity is also eyeing Saudi Arabia and its investment in esports.

Last month, Gfinity was appointed esports strategy development partner of the Saudi Pro League. And in June 2022, Gfinity hosted a business delegation organised by the Saudi General Entertainment Authority (GEA), at the Gfinity Arena.

Gfinity CEO, John Clarke, commented: “The investment in gaming in KSA (the Kingdom of Saudi Arabia) is creating new opportunities and Gfinity is well positioned to play a positive role in future developments. 

“It was in this context that in November 2022 I was delighted to be able to announce Gfinity’s appointment as the esports and gaming solutions partner for the Saudi Pro League.  This represents an important first step within the region.”

John continued: “When appointed CEO in March 2020, I set out a bold plan to bring the economics of our business under control and to reset the strategic focus on ‘what we own’ to deliver scalable and profitable growth. We are now at the end of the second full year of this plan, and we are making progress in each area.

“The decision to prioritise the ‘what we own’ strategy over the delivery of multiple fee based one-off client service programmes has had an adverse short-term impact on top line revenue in 2022, which was £5.3m, a decrease of 8% year-on-year. However, we saw a 33% increase in revenue attached to Gfinity’s owned audience, owned tech IP and the V10 R-League esports programme which is a co-owned partnership with Abu Dhabi Motorsport Management. We have driven 107% increase in gross profit from these areas.

“During the year we turned down several one-off assignments which would have driven more revenue but would not have helped us deliver on our strategic plan. We have had the confidence to say no. The numbers show that it is the right thing to do.”

John Clarke, Gfinity

“Today we are starting to see a more balanced revenue dispersion, reflecting the ‘what we own’ strategy. This is going to continue. The transformation of Gfinity’s business model is now well underway. It is delivering improved financial performance and we continue on a pathway towards profitable growth.”

Neville Upton, Gfinity Chairman, added: “It has been another year of progress in the delivery of the company’s strategic plan. The focus on “what we own” continues to guide the team and prioritise where resources are best allocated. This contributed to third consecutive reduction in adjusted operating loss.

“By owning a fast-growing community of hard-to-reach gamers, and proven technology that facilitates both competitive game play and deepens engagement, the business now has a more predictable and reliable revenue flow. This is scalable, and delivers strong margins.

“The GDM team continues to grow our owned community of hard-to-reach gamers through web and social channels. Gfinity now touches the lives of close to 100m young people each month. Several our sites have seen significant growth but none more so than EpicStream which grew monthly users and page views by 356% and 512% respectively.”

You can see Gfinity’s full end of year report to June 30th 2022 here, and more Gfinity articles on Esports News UK here.

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