Chinese games developer Ourgame International Holdings Limited has revealed plans to open up to 10 eSports arenas in China and the United States by 2019 as it looks to aggressively expand its eSports business. And the company has also named Japan as the primary focus of its World Poker Tour brand over the next two years.
The revelations form part of an update on the proposed issuance of subscription shares, which Ourgame expects will raise around HK$416 million to put towards its eSports and poker businesses as well as a revamp of its board game offerings in mainland China.
In a filing to the Hong Kong Stock Exchange, Ourgame said it planned to spend HK$125 million “to further develop the eSports business and expand the global arena network” of its subsidiary, Tianjin Allied eSports Arena Internet Technology Co Ltd (AES).
“The company plans to build approximately four to six eSports arenas in the US and approximately two to four eSports arenas in the PRC in 2018 and early 2019,” it said. “The company also plans to build approximately two mobile eSports arena trucks that is currently being used in Europe to be introduced to the US in 2018.”
AES is currently developing the first permanent eSports venue on the Las Vegas Strip at MGM’s Luxor Hotel and Casino, due to open in 2018, having raised HK$120 million through the issuance of convertible notes in July.
Ourgame will also put HK$62 million towards further development of the World Poker Tour – the leading global poker tournament brand it purchased for US$35 million in 2015 – including HK$25 million “for geographic expansion including tournaments, marketing of WPT online games products and TV content development, with initial focus in Japan and South America … and approximately HK$37 million for WPT online games development and marketing primarily focusing on the playWPT set of online games products.”
Another HK$125 million will be used to acquire or develop two or three China regional card and board games platforms to complement and enlarge the group’s current China national games platform, including through the acquisition of proven card and board games teams and products.
Ourgame announced losses of RMB68.4 million for the six months to 30 June 2017 – a 190% decrease from the RMB76 million profit it generated 12 months earlier – with revenue down 34.5% year-on-year to RMB 272.3 million due to “intensified competition” and a loss of sponsorship of its WPT brand.
In its filing, the company said, “In response to such rapid development and intensified competition in the group’s industry, the group needs to take immediate actions to solidify its market share and raise sufficient funds to support and continue the group’s growth plans.”
It also addressed the proposed acquisition of 89,189,189 subscription shares, representing approximately 10.18% of the issued share capital of the company, by three Ourgame executive directors, stating, “With respect to the Management Subscription, the management has been considering acquiring a meaningful interest in the company in order to demonstrate their confidence in the company’s business and to align their interests with that of the company’s shareholders for some time.
“Subscribing for new shares was considered the preferred option by the management as opposed to the principal alternatives.”
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