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SEGMENT REPORTING
 6 Months Ended
Jun. 30, 2026
Segment Reporting [Abstract]  
SEGMENT REPORTING

NOTE 11 – SEGMENT REPORTING

 

The Company’s principal operating segments coincide with the types of products and services sold by the Company. The products and services from which revenues are derived are consistent with the reporting structure of the Company’s internal organization. The Company’s two reportable segments for the three and six months ended June 30, 2026 and 2025 were (i) the development and publishing of interactive racing video games, entertainment content and services (the “Gaming segment”); and (ii) the organization and facilitation of esports tournaments, competitions and events for the Company’s licensed racing games as well as on behalf of third-party video game racing series and other video game publishers (the “Esports segment”). The Company’s Chief Operating Decision Maker (“CODM”) has been identified as the Company’s Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Segment information is presented based upon the Company’s management organization structure as of June 30, 2026 and the distinctive nature of each segment. Future changes to this internal financial structure may result in changes to the reportable segments disclosed. There are no inter-segment revenue transactions and, therefore, all revenues are earned from external customers.

 

Segment operating profit is determined based upon internal performance measures used by the CODM. The Company derives the segment results from its internal management reporting system. The accounting policies the Company uses to derive reportable segment results are the same as those used for external reporting purposes. Management measures the performance of each reportable segment based upon several metrics, including revenues, gross profit, Adjusted EBITDA, and operating income/loss. Management uses these results to evaluate the performance of, and to assign resources to, each of the reportable segments. Segment income from operations excludes interest income/expense and other income or expenses and income taxes according to how a particular reportable segment’s management is measured.

 

 

Motorsport Games Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

Segment information available with respect to these reportable business segments was as follows:

 

             
   Three Months Ended June 30,   Six Months Ended June 30, 
   2026   2025   2026   2025 
Revenues:                
Gaming  $3,503,685   $2,591,840   $7,534,974   $4,350,293 
Esports   36,277    -    36,277    - 
Total Revenues  $3,539,962   $2,591,840   $7,571,251   $4,350,293 
                     
Cost of Revenues:                    
Gaming  $602,289   $454,887   $1,096,414   $920,273 
Esports   42,139    -    65,151    - 
Total Cost of Revenues  $644,428   $454,887   $1,161,565   $920,273 
                     
Gross Profit (Loss):                    
Gaming  $2,901,396   $2,136,953   $6,438,560   $3,430,020 
Esports   (5,862)    -    (28,874)    - 
Total Gross Profit  $2,895,534   $2,136,953   $6,409,686   $3,430,020 
                     
Sales and Marketing Expenses:                    
Gaming  $190,017   $126,307   $400,336   $224,008 
Esports   1,333    -    1,333    - 
Total Sales and Marketing Expenses  $191,350   $126,307   $401,669   $224,008 
                     
Development Expenses:                    
Gaming  $636,056   $270,343   $1,150,393   $872,296 
Esports   101,172    -    101,172    - 
Total Development Expenses  $737,228   $270,343   $1,251,565   $872,296 
                     
General and Administrative Expenses:                    
Gaming  $1,316,277   $852,282   $3,014,908   $2,015,508 
Esports   5,104    12,758    5,104    18,014 
Total General and Administrative Expenses  $1,321,381   $865,040   $3,020,012   $2,033,522 
                     
Impairment of Intangible Assets:                    
Gaming  $-   $-   $27,928   $- 
Esports   -    -    -    - 
Total Impairment of Intangible Assets  $-   $-   $27,928   $- 
                     
Depreciation and Amortization:                    
Gaming  $5,087   $5,359   $9,301   $17,310 
Esports   2,224    6,338    4,526    12,513 
Total Depreciation and Amortization  $7,311   $11,697   $13,827   $29,823 
                     
Other Operating Income (Expense):                    
Gaming  $-   $1,106,703   $-   $1,616,748 
Esports   -    (2,206)   -    (12,251)
Total Other Operating Income  $-   $1,104,497   $-   $1,604,497 
                     
Income (Loss) From Operations:                    
Gaming  $753,958   $1,989,365   $1,835,694   $1,917,646 
Esports   (115,694)   (21,302)   (141,009)   (42,778)
Total Income From Operations  $638,264   $1,968,063   $1,694,685   $1,874,868 

 

   June 30, 2026   December 31, 2025 
Total Assets:          
Gaming  $9,954,938   $10,424,054 
Esports   1,367,485    1,544,012 
Total Assets  $11,322,423   $11,968,066