Allied Gaming & Entertainment said a recent restructuring of its esports business will help the group build on its success in 2022, in which it reported a year-on-year increase in revenue.

The group announced details of the restructuring towards the end of the fourth quarter, following a strategic review, with the aim of broadening its focus across a broader range of markets.

The review concluded that shareholders’ interests would be best served by restructuring the existing esports business and expanding its focus on a broader range of entertainment and gaming products and services, rather than a single business combination transaction to strive for.

In addition, the company was renamed Allied Gaming & Entertainment, with the group adopting the new name from December 1st.

While the initiative came too late in the quarter to have any impact on Allied’s fourth-quarter or full-year performance, CEO Yinghua Chen said the restructuring will support its growth plans in 2023 and beyond.

“Going forward, we are confident that expanding Allied’s original focus on live events and multiplatform content and adding new revenue drivers such as live virtual entertainment events and online gaming tournaments will result in future positive financial results,” Chen said .

Fourth quarter

Looking first at Allied’s fourth-quarter performance, revenue for the three months ended Dec. 31 was $1.2 million, down 36.8% from $1.9 million in the quarter Previous year.

Allied attributed the decline in revenue to the one-off nature of its live streaming partnership with Trovo in 2021. Almost all of the revenue came from in-person operations, with only $428 coming from cross-platform content.

However, despite the decline in sales, Allied was able to reduce its operating costs by 33.3% to $3.8 million, resulting in an operating loss of $2.6 million, an improvement from $3.8 million. Dollars in 2021.

Allied recorded other income of $954,077, including interest income of $755,209, resulting in a pre-tax loss of $1.7 million, compared to the loss of $3.8 million. dollars in the previous year.

The group paid no taxes in the fourth quarter, meaning the net loss was also $1.7 million, in contrast to last year’s loss of $6.3 million, although the 2021 figures were through a loss of $2.6 million from the sale of assets in 2021 World Poker Tour (WPT) in July 2021. Allied sold its poker assets, including the WPT, to Element Partners for $105.0 million.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter reached a loss of $1.7 million, although this was an improvement from the loss of $2.1 million in 2021.

Full year

For the full year, revenue increased 28.0% year-over-year to $6.4 million, supported by an increase in sponsorship revenue and live event revenue hosted at HyperX Arena and Allied Esports Truck -operation took place.

Of this total revenue, $6.1 million came from in-person activities and $251,558 came from cross-platform content.

Operating costs and expenses fell 12.6% to $18.1 million, meaning the operating loss narrowed to $11.8 million from $15.8 million in 2021 decreased. Taking into account other income of $942,311, the loss before taxes was $10.8 million, compared to $15.1 million in the previous year.

Again, Allied paid no taxes, meaning the net loss was also $10.8 million. This contrasted with the net profit of $62.9 million reported at the end of 2021, although last year’s figures were impacted by the WPT sale, which resulted in a profit of $77.9 million.

Allied also noted that adjusted EBITDA for the year reached a loss of $8.6 million, although this was an improvement from $10.5 million in 2021.

“We experienced positive momentum in 2022 with a 28% increase in revenue compared to 2021, driven primarily by an increase in live events at our HyperX Arena in Las Vegas and our Allied Esports Truck, as well as sponsorship revenue from the first season of our Original content series Elevated,” said Chen.

“In addition, in the fourth quarter we renamed ourselves Allied Gaming & Entertainment to better reflect our positioning as a global experiential entertainment company and also completed our strategic review process.”