Allied Gaming & Entertainment narrowed its net loss by 48.7% in the first quarter of 2023 despite a decline in revenue.
The first quarter was the first full quarter since the group announced plans to restructure its existing esports business and expand its focus across a wider range of markets, after completing a strategic review in December last year.
At the time, Allied said it would be in shareholders’ interests to focus on a broader range of entertainment and gaming products and services rather than pursuing a single business combination transaction.
Yinghua Chen, chief executive of Allied, said the group made progress on its strategic goals in the first quarter and this will help it gain further momentum in the second quarter.
“Allied has had a strong start to the year so far and we continue to gain momentum in the second quarter as we advance our strategic goals,” said Chen. “We are also pleased to recently announced our continued relationship with HyperX/HP on arena branding and the renewal of sponsorship from Progressive Insurance for our original content programs.”
“These growing relationships are further evidence that Allied is recognized as an established name in the gaming entertainment community and that we are providing access to this important and rapidly growing multibillion-dollar gaming market.”
Revenue for the three months to March 31 was $1.2 million (£953,613/1.1 million euros), down from $2.2 million in the corresponding period last year.
Allied said this decline was primarily due to the timing of its original “Elevated” content series, which recorded first-season revenue in the first quarter of last year and was expected to record second-season revenue in the second quarter of 2023.
The company also noted that revenue since the fourth quarter remained relatively flat compared to the previous quarter.
In terms of expenses, costs and expenses decreased 38.7% to $3.8 million, driven by a reduction in general and administrative expenses, primarily cash, severance and stock-based compensation, as well as timing associated expense recording of the Elevated series was supported.
The decline in expenses caused the operating loss to fall from $3.7 million to $2.7 million. After including $761,904 of other income, including $734,449 of interest income, there was a net loss of $1.9 million compared to $3.8 million in 2022.
Allied also noted a positive impact of $1,880 in currency translation adjustments, meaning its overall net loss was $1.9 million, compared to $3.7 million last year.