Shares in Game Digital climbed as much as 13pc on Monday as the computer games retailer's investors cheered plans to sell half its Belong esports business to Mike Ashley’s Sports Direct for £3.2m.

The sportswear firm, which bought a 25.8pc stake in Game last year, now plans to introduce concessions of the chain in its own stores along with Belong-branded gaming “arenas” where computer game fans can compete against each other.

Game’s chief executive Martyn Gibbs said the deal would help Game to “move from a seller of physical products to providing gaming experiences” and allow both retailers to “capitalise on the increasing overlap between sports and esports fans”.

The deal means Sports Direct will gain 50pc of Belong’s intellectual property and be entitled to half its profits. It has also agreed to provide Game’s Spanish arm with £55m worth of borrowing facilities, some of which could be used to open new venues.

The news earned Game a “buy” rating from Liberum analyst Adam Tomlinson, who said it was an “important step” in the retailer’s transformation. That sent its shares up as much as 13pc in early trade, but this afternoon they had fallen back to around 40p, up 5.3pc.