Expressions of interest, but no Motorsport Games sale yet

The quest to sell Motorsport Games continues, with multiple parties believed to be exploring the option of a purchase or merger.

“We recently announced that Motorsport Games is considering ‘strategic alternatives’ and the Motorsport Games board of directors and I are in the process of reviewing the options available to us with a view to improve our long-term funding needs in order to produce the great game experiences we have proved that we can offer under our new business structure,” said Motorsport Games CEO Stephen Hood, on 14th November 2024.

“The number of expressions of interest received serves to reinforce our belief in the opportunities ahead.”

Last month, the company acknowledged that its ‘strategic alternatives’ included a “potential sale or merger of the Company”, with Traxion sources confirming the former is a primary goal.

In the meantime, it made a wave of mass redundancies across the company, including its development arm Studio 397, which is currently working on rFactor 2 and Le Mans Ultimate.

“A reduction in personnel has not meant a reduction in productivity or progress,” said Hood on the beleaguered firm’s Q3 2024 earnings call.

“However, we believe we have struck the right balance between cost saving and retaining key staff and vital knowledge.”

Development on its sim racing titles continues, with some form of subscription service for rFactor 2 and Le Mans Ultimate expected to launch before the end of the year. The official FIA World Endurance Championship title will also see LMGT3 cars debut imminently.

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Net losses continue

In the third quarter of this year, running from July to September, Motorsport Games reported a net loss of $600,000. This is compared to a net loss of $3.5 million in Q3 2023 and a net income of $2.1 million in Q2 2024.

Its reported adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) was positive at $100,000 for the most recent quarter. This is compared to an EBITDA loss of $0.2 million in Q2.

As of 30th September 2024, Motorsport Games reports that it still has a deferred payment of $0.6 million, plus unpaid accrued interest of $0.3 million, owing to Luminis International B.V. and Technology In Business B.V. for the purchase of Studio 397.

55.6% of its revenue for the three-month period came from sales of its ageing NASCAR games, such as NASCAR 21: Ignition, NASCAR Heat 5 and two titles on Switch. These are set to be removed from sale at the end of this year, following a final payment from licence purchaser iRacing.