Join our daily newsletter At The Bell to receive exclusive market insights
Cloud gaming services provider Pentanet (ASX:5GG) has posted a major update to its partnership with global microchip giant NVIDIA for gaming hardware.
The sensational US AI-microchip stock – largely in control of US market sentiment – had its genesis in gaming hardware, predominately graphics cards, which would decades later end up being the best decision the company could ever make when they had computer parts powerful enough to train modern AI language models.
An amendment to the existing partnership now officially includes New Zealand as a serviceable territory, paving the way for the addition of neighbouring territories in the future.
The latest financial results off the back of its Q2FY24 report showcased positive earnings in the gaming segment.
Paid memberships experienced 52% quarter-on-quarter growth, driven by diverse membership offerings, marketing initiatives, new content additions, and expansion through partnerships.
With Pentanet betting the Australian cloud gaming market is heading for substantial growth, Managing Director Mr. Stephen Cornish expressed confidence in the company’s ongoing success with NVIDIA.
“With over half a million members now part of the CloudGG ecosystem, Pentanet continues to demonstrate the growing appetite for cloud gaming in our territory,” Mr Cronish said.
Pentanet will be moving to a “capex deployment model” more in-line with its requirements (read: another way of saying ‘we want to cut costs,’) while it retains a first right of refusal to continue being the sole distributor for NVIDIA’s relevant gaming hardware in Australia.
As far as some of the other amendments for the partnership extension, these are the key highlights:
- The GeForce NOW (GFN) agreement has no finite term and will remain ongoing
- Pentanet is able to extend its GFNA exclusivity in Australia in six-month increments for each additional purchase of U$1.5m in GFN hardware infrastructure
- Should Pentanet not extend the exclusive agreement, it will have first right of refusal to re-engage exclusivity, by placing a non-cancellable purchase order of GFN gaming hardware infrastructure within 30 days notice of a third-party competing offer to deploy the GFN service in Australia
5GG has been trading at 8.5 cents.
