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Allied Esports Entertainment announced record revenue in its latest earnings report, but also posted losses — a trend that has become increasingly prevalent in the gaming industry.
The esports entertainment company saw its revenue jump 381% year-over-year to $2.4 million in Q1 2022. Despite the encouraging results, Allied posted a net loss of $3.8 million during the quarter, up from a loss of $3.3 million in Q1 2021.
Total costs and expenses reached $6.2 million in Q1 2022, a 15% increase year-over-year.
- Allied posted record results behind increased traffic at its HyperX Arena in Las Vegas.
- During Q1, the company launched its first original branded content offering and NFTs.
- It produced 92 events with 68 proprietary events and 24 third-party productions in Q1.
- It also renewed its deal with NASCAR to host eNASCAR Arcade events.
Luckily, the company continues to invest in its balance sheet, which reached $95.7 million in Q1.
Troubling Trend
Allied is another example of mounting losses for gaming-related companies due to increased spending on marketing and securing deals.
Esports Entertainment Group reported a net loss of $63.8 million in fiscal Q3 compared to $15.7 million in revenue, while esports betting company Rivalry posted a net loss of $19.2 million in 2021 against $8.6 million in revenue.
In April, FaZe Clan submitted an amended filing to the SEC indicating that it posted an adjusted EBITDA loss of $28.7 million in FY2021, compared to a projected loss of $19 million.
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