Online gambling technology provider and operator Gaming Innovation Group (GiG) has shut down its proprietary game studio GiG Games because it generated “negligible” revenues.
On Monday, the Malta-headquartered GiG announced the “strategic decision” to shut down its GiG Games studio “with immediate effect.” The studio made its debut at the end of 2017 and the company originally envisioned producing six to eight new proprietary games per year. But only four titles had emerged since the first game was delivered in October 2018 and the division’s revenue to date had been well below expectations.
The company said it took this decision to reduce operating expenses and to “concentrate focus on key strategic areas.” The closure is expected to produce monthly savings of around €250k “once the full effect is realized.” The company hasn’t ruled out a return to in-house game development “should proprietary content be considered strategically more important.”
The shutdown affects some 25 individuals who have received termination packages, while three staff members have been retained to maintain the current game studio through the end of the year. The four in-house games already out in the wild will continue to be offered via GiG’s in-house brands and its B2B clients.
GiG CEO Richard Brown said the studio’s demise was part of the company’s “recent strategic initiatives taken to reduce non-marketing related OPEX, together with our commitment to execution and bottom line earnings.”
GiG’s most recent earnings report showed double-digit declines in both B2B and B2C revenue, in part due to the loss of a major B2B customer and regulatory headwinds in Sweden’s liberalized online gambling market. In July, GiG shut the Swedish-facing sportsbooks of its Rizk and Guts B2C brands, citing a lack of regulatory certainty over what types of betting markets were kosher.
Investors reacted badly to GiG’s announcement, pushing its share price down nearly 13% on the Oslo exchange by the close of Monday’s trading. The shares are now worth roughly one-third of their 2019 peak set back in February.
