GameStop sells digital video game publisher as restructuring continues

GameStop has made another move in its quest to move beyond video games by selling Kongregate, a digital gaming publisher and developer it acquired in 2010.

MTG, a Swedish digital entertainment group, said it’s acquiring San Francisco-based Kongregate for $55 million.

Founded in 2006, Kongregate attracts 14 million users each month with more than 100,000 games in its browser. MTG said it is expected to generate at least $50 million in sales in 2017.

Grapevine-based GameStop, the nation’s top video game retailer, has been rapidly diversifying in recent years as digital downloads of video games have eaten into its retail business. It has acquired hundreds of AT&T Wireless stores and expanded into toys and collectibles tied to video games and othe entertainment.

“We believe the sale of Kongregate to MTG is good for both Kongregate and (GameStop),” GameStop spokesman Joey Mooring said in an email. “It allows Kongregate to receive additional investment they need to continue to grow and thrive in their market segment. It allows us to use the proceeds from the acquisition in shareholder friendly ways.”

GameStop reported better-than-expected first-quarter results last month as Nintendo’s new Switch console boosted sales. But the company disappointed investors, maintaining its outlook for the year.

GameStop shares (ticker: GME) dropped 18 cents Wednesday to close at $20.46. The stock has lost 18 percent this year.

This story was originally published June 21, 2017 at 4:30 PM with the headline "GameStop sells digital video game publisher as restructuring continues."