Gfinity said it is closing its Esports division to shift its focus to digital media and the gamer website industry.
The board of the AIM-listed tech and media firm said the market for esports remains soft, and the directors see limited profitable growth opportunities.
According to a statement, Gfinity has performed a round of cost cuts and improvements in its content to increase its number of users following a large dip in 2022.
Part of this plan includes deploying artificial intelligence (AI) tools to reduce the cost of specific items of content creation, which helped deliver an upturn in trading last month.
Gfinity also said it made “extensive cost savings”, with the monthly cost base expected to amount to £185,000 in July, compared to a monthly average of £600,000 in the first half of the year.
As a result, the directors believe the cost savings can lead to an organisation that can achieve profitability on an underlying earnings basis in the near term.
“By focussing on our core web offering for gamers, we are able to remove the capital-intensive businesses of software development and esports events, and focus on returning to a positive return on investment,” said chairman Neville Upton.
Gfinity also said it disposed of 72.5% of its subsidiary Athlos to management consultancy firm Tourbillon Group, with the buyer assuming liabilities and providing capital to support growth.
The technology and media company will retain a 27.5% share with Tourbillon, paying £1 for its stake.