The Pentanet Ltd (ASX:5GG) share price is falling in late afternoon trade despite announcing a positive update to the market. At the time of writing, the Pentanet share price is down 2.34% to 62.5 cents.
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What's driving the Pentanet share price?
The Pentanet share price is backtracking today, perhaps as a result of the heavy sell-off in the ASX market.
In its release, Pentanet advised it has received strong market interest in the Australian launch of GeForce Now – NVIDIA's flagship cloud-based game streaming service.
The company launched an expression of interest to gauge potential market demand for gaming services late last month. Future GeForce Now users completed online registrations to receive an invitation to the Beta program.
So far, Pentanet has recorded more than 24,300 registered gamers, greatly exceeding early interest expectations for the upcoming new service. The company said the demand further validated its business case to ramp up its launch plans.
Due to the strong registration response, Pentanet upped its hardware order with NVIDIA from 12 to 18 RTX game servers. The order value is estimated to be around $3.2 million.
Once received, the company will split up and send the servers to Perth or Sydney.
In addition, Pentanet is targeting the rollout of GeForce Now beta in Australia sometime this year, followed by a commercial launch. Pricing for the service is yet to be determined and will be announced at a later date.
The beta program will give the company further insights on usage patterns, and how many users the server can support. This will allow for improvements to ensure a smooth transition to its commercial launch.
A quick take on Pentanet
Based in Perth, Western Australia, Pentanet is a telecommunications carrier and internet service provider (ISP). The company delivers high-speed internet services through its own NBN, LBN and private fixed-wireless network.
In the Perth metro area alone, Pentanet covers more than 80% of customers who require next-generation internet needs.
More recently, the company is seeking to expand in the cloud gaming market through a subscription-based entertainment service. Pentanet signed an alliance agreement with NVIDIA to use its GeForce Now technology throughout Australia.
Management comments
Pentanet managing director Stephen Cornish welcomed the registration response, saying:
We are encouraged by the very strong interest in GeForce NOW and now have a very clear indication from market demand that Australian gamers appear to understand and support the service, mirroring the strong demand also seen overseas.
As someone who grew up playing video games, I am proud to be championing the next generation of gaming service into Australia, and I am looking forward to demonstrating both the power of this technology and its ability to shift the gaming market.
Since listing at the end of last month, the Pentanet share price has risen 4.2%.
