The future of troubled e-tailer Gameplay last night hung in the balance after it admitted that it was running out of cash faster than previously thought.
Shares in the online games seller slumped 33% to 4.75p amid fears that it would have to sell its last remaining businesses or find partners to avoid administration.
Last year Gameplay was named the Alternative Investment Market's "new company of the year" and its shares changed hands for almost £11.
Lower than expected returns from the sale of its boxed games divisions and the collapse of a credit line with its suppliers has wiped around £10m from its dwindling cash resources leaving it without enough funds to take its residual technology business into profit. "The desire is to carry on and complete the journey that we have embarked on but it is tough and we have to act in the best interests of shareholders," said Mark Bernstein, the chief executive.
It is thought that shareholders BSkyB and BT remain interested in using Gameplay's multi-player and online gaming technology but internal issues at both companies are getting in the way of any deal.
BT is keen to conserve cash, while BSkyB has been put off internet companies after having to write off a series of bad investments. They are also concerned about Gameplay's continued solvency.
It is thought that Gameplay could guarantee its short-term future if either of the deals being discussed is sealed but executives admit that the talks could take longer than the company has.
In the event that an agreement does not materialise, the executives are determined that Gameplay will not go bust. Instead they will close the technology business, leaving a stock market listed cash shell that another company could be reversed into.
Gameplay has been stricken by the lack of an expected upturn in sales in the computer games market and the slower than expected roll-out of fast internet connections which would have made mass online gaming a commercial reality.
Despite increasing sales and a strong brand, it has been forced to sell businesses to raise cash. Executive chairman Mark Strachan yesterday stepped down to a non-executive position as part of a boardroom shake-up designed to save money.
