Guild Esports enters sim racing via new partnership with Fanatec
investee company ( ) announced a new partnership with sim racing equipment provider Fanatec. The partnership marks Guild's entry into simulated racing. Fanatec will supply Guild with eight sim racing rigs, related hardware, and regular technology upgrades under a value-in-kind deal.
Guild said the rigs would form the centerpiece of its new Sim Racing Facility being established at its Sky Guild Gaming Centre in Shoreditch, to serve as a new revenue stream for the company. In exchange for its hardware and service, Guild will provide Fanatec with prominent branding around the Sim Facility as well as logo placements on social media. The Sim Facility will additionally serve as a showroom for Fanatec, providing Guild with affiliate revenue from any on-site or digital sales.
Guild's Sim Facility will provide tailored simulator gameplay and experiential packages for corporates, the wider public, and rentable training facilities for professional teams. The new offering will be advertised across Guild-owned channels, partner networks, and the existing B2B communications channels and outlets used for Guild HQ services.
Overall, this partnership deal is a win for Guild as it will provide a new revenue stream for the company at minimal capital cost by leveraging its existing flagship facility in Shoreditch, London. Moreover, it will diversify Guild's revenue into the rapidly growing simulator racing sector of esports, expected to see significant growth in the coming years.
Guild expects the Sim Racing Facility to begin generating revenue from Q3 2023. The move into digital motorsports also opens up a range of new sponsorship categories for Guild's esports division, with conversations already underway.
Sim racing is among the fastest-growing areas of esports with global competitions run by Formula 1, Formula E, Le Mans and established esports operators such as ESL. The global gaming simulator market, of which sim racing makes up a significant portion, is expected to reach US$10bn by 2027. Guild said it is considering expanding its professional esports roster into sim racing.
In its recently announced interim results, Guild reported a revenue increase of 241% to £3.7m compared to £1.1m in H1 2022, driven by significant growth in sponsorship income. Gross profit also rose 256% to £2.5m from £0.7m a year ago. The company's loss before tax halved to £2.3m from £4.96 in H1 2022, reflecting increased sponsorship revenue and reduced operating expenses. Net cash stood at £1.1m on 31 March 2023. Momentum is positive into H2 2023 with a strong contracted orderbook and diversification of revenue streams such as the abovementioned partnership deal. We expect H2 2023 revenues to show further growth year-on-year.
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