Emerge Gaming mines Africa for esports gold; shares go flying
Former miner turned esports player Emerge Gaming says it now has exposure to 350 million potential subscribers for its “Arcade X” computer game platform after integrating with an African telco network.
esports refers to organised, multiplayer video game competitions.
Emerge Gaming (ASX:EM1) — which underwent a $5 million backdoor listing via Arrowhead Resources earlier this year — so far has about 60,000 users of its ArcadeX gaming platform.
It’s not yet making much money — the company banked less than $20,000 last year — but it’s hoping to become the favoured eSports player in the evolving African market.
Emerge hopes its Arcade X technology — which allows gamers to play more than 300 gaming titles against each other via mobile, console or PC — will make it the main service provider catering to gamers and gaming businesses in Africa.
In the African mobile sector alone there are some 960 million phone subscriptions, with internet penetration at 18 per cent. Smart phone penetration is said to be growing there 50 per cent year-on-year.
“Securing access to 29 per cent of the entire continental African population for Arcade X is an enormous achievement,” Emerge chief Greg Stevens said in a statement.
“This further enhances our monetisation strategy to generate significant advertising revenue across the African continent and our recent success in South Africa has provided the leverage needed to enter new emerging markets and gain significant traction.”
From mining to gaming
Emerge came about after Arrowhead last year started looking across the mining, agriculture and tech sectors for a new project to return value to shareholders.
At the time it was involved in legal action against the Egyptian Government after it lost its 50 per cent stake in an Abu Dabbab tantalum, tin and feldspar project.
Emerge eventually decided on esports after signing a content distribution agreement with South African telco MTN Group for its Gaming Battle Ground platform (GBG).
Once the acquisition was finally ticked off Emerge raised $5 million and re-listed on the ASX in April.
Today, the company told investors they had gained access to more than 350 million new potential subscribers in Ghana, Kenya, Namibia, Nigeria, Zambia and Zimbabwe.
Shareholders responded, sending Emerge shares up 20 per cent to an intraday high of 1.2c.
Mr Stevens is a co-founder of GBG. Phillip Re is the only director remaining on the current board from Arrowhead Resources.
The company’s preliminary final report revealed revenue of $16,345.
The the full-year loss blew out more than 1000 per cent to $6.5 million thanks to an accounting impairment loss of $5.4 million.
“This one-off, non-cash expense is recognised as the result of the ASX listing transaction.
“Management will routinely review its assets for impairment and should the Arcade X platform prove to be very successful, this impairment will be reversed,” the report said.