Game Digital has agreed a £52 million sale to Sports Direct.

The takeover could result in House of Fraser - a recent purchase by Mike Ashley’s retail portfolio - department stores creating purpose-built gaming arenas.

In a stock market statement, Game explained that as Sports Direct increased its 26 per cent stake bought in 2017 up 38.5 per cent earlier this month, the video game retailer had to consider a deal, as per City rules.

“In coming to this recommendation, the board has considered the growing size of Sports Direct’s shareholding in the group,” read the statement. “Current negative retail market outlook and the likely elongated current console life cycle are expected to impact the future financial performance of the group.”

Earlier this month, a final £51.9 million bid was made, at a price of 30 pence per share.

A statement at that point did not rule out possible store closures and job losses, with Sports Direct suggesting that Game might not be able to face up to the continued pressures in the retail industry “as a standalone business”.

Game’s sales fell 4.7 per cent to £492.9 million in its first half, but cost-cutting initiatives and higher margin sales boosted interim pre-tax profits 20.3 per cent to £14.8 million.

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