Gameplay nets Israel's Pixel in £23m share deal

Gameplay.com, the computer games retailer, yesterday said it had bought Pixel Broadband Studios, an Israeli technology company, for $34.1m (£23.36m) in shares.

Gameplay.com, the computer games retailer, yesterday said it had bought Pixel Broadband Studios, an Israeli technology company, for $34.1m (£23.36m) in shares.

The deal was announced as Gameplay reported a maiden full-year loss of £22.8m before goodwill and depreciation, slightly higher than analysts' expectations.

Pixel's assets will allow the UK group to launch sophisticated new services, such as renting its games to be played on the internet.

Mark Bernstein, Gameplay's chief executive, said: "This acquisition gives us a very significant lead in interactive games services [in Europe]." Asked whether the company plans to expand outside the Continent, Mr Bernstein said: "We are Europhiles. We are not going to go to the United States - it's too big and complicated."

Gameplay issued 15.4 million shares to buy Pixel.

In the 12 months to 31 July, Gameplay's customer base rose to 1.2 million. Total sales were £23.2m and the group ended the period with cash reserves of £47.8m.

Gameplay shares yesterday closed up 2.5p at 231p.