The firm said it mined fewer coins due to a higher network difficulty, operational issues and the suspension of some operations.

Bitcoin mining firm Hut 8 said its third-quarter net loss more than doubled and revenue fell 46% from a year earlier as it mined fewer coins due to a higher network difficulty, operational issues and the suspension of some operations.

The Toronto-based company’s loss widened to C$53.6 million ($39 million) from C$23.8 million, while sales slumped to C$17 million from $31.7 million in the year-earlier period, according to a statement on its website. The number of bitcoin mined in the quarter tumbled to 330 from 982.

While some miners have posted better returns in 2023 as the BTC price has rallied this year, Hut 8 attributed the decline in part to issues encountered at its site in Drumheller, Alberta, where “high energy input levels … have been causing miners to fail.” Operations at the site are currently at only 27% the installed hash rate, Hut 8 said in its earnings statement.

HUT Nasdaq-traded shares slid 8.4% to $1.86 at the time of writing.

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The deal will enable Hut 8 to reach Enthusiast Gaming’s 300 million-strong audience and provide data center hosting.

Canadian crypto miner Hut 8 signed a multi-year strategic partnership with gaming entertainment company Enthusiastic Gaming to collaborate on new experiences and content, and data center hosting.

“As ambitious leaders at the intersection of gaming and digital asset mining, Enthusiast Gaming and Hut 8 will collaborate on new experiences and content within mobile and blockchain gaming, Web 3.0, NFTs, and cryptocurrency,” according to a statement. Hut 8 will also provide “critical infrastructure support” by hosting Enthusiast Gaming in its data centers.

The new partnership will allow Hut 8’s content to be integrated across Enthusiast Gaming’s flywheel of communities, games, and experiences. “In the near term, we anticipate the benefits to Hut 8 will include connecting with an expanded crypto-savvy audience and potential new customers, while generating incremental revenue by hosting Enthusiast Gaming on our infrastructure,” Hut 8’s CEO Jaime Leverton told CoinDesk in an email.

The gaming sector is rapidly changing as the number of video gamers globally is quickly approaching 3 billion with a projected 5%-7% compound annual growth rate (CAGR) over the next few years, according to research by Messari. The gaming sector generated $175 billion in revenue last year and is expected to reach $269 billion by 2025, the report said.

Moreover, blockchain gaming has seen a rapid user adoption, while investors continue to pour money into the sector. In January alone, $1 billion was invested in blockchain games, on top of $4 billion already raised in 2021, according to the data tracker DappRadar.

“We’re excited to host Enthusiast Gaming in our data centers and collaborate on new experiences and content that will connect us to their audience of 300 million Gen Z and Millennial viewers, the majority of whom are crypto-savvy,” said Jaime Leverton, CEO of Hut 8.

To kick off the deal, Hut 8 will be featured as a presenting sponsor for a significant upcoming update to its first-person shooter game EV.IO. The miner will also become a sponsor of Enthusiast’s Luminosity Gaming, the top esports organization on Twitch with a social following of more than 145 million globally.

The deal comes as some miners are diversifying into non-mining business ventures such as blockchain gaming, NFTs and Web 3 projects. Most recently, another crypto miner, Argo Blockchain, launched an internally funded, in-house non-mining business unit to diversify its business and take advantage of other opportunities in the blockchain ecosystem.

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