Shares in UK video game group plunge today

Shares in UK video games group Bits Corp tumbled 47% today after it revealed a decision to pull the plug on a publishing deal had blown a hole in revenues.

The group plans to raise £390,000 ((€622,000) by issuing nearly 10 million new shares in the City to compensate for a "substantial shortfall" in cash.

Bits Corp said it had lost £500,000 (€797,000) from expected revenue after agreeing with a unnamed publisher to scrap a contract covering the development of a game.

Chairman John Corre said the move was down to "fundamental differences in approach" and that the group hoped to re-sell the rights to a new firm.

But he added that revenues had also been hit by delays in signing off deals for two games designed for Nintendo’s GameBoy Advance console.

Mr Corre said the company had decided to "take the time necessary to secure the best possible terms" for both titles.

Mr Corre said he still hoped significant royalties would be generated by a game due for release later this year based on the Die Hard film trilogy.