The on-line games site Freeloader.com that let users download games for free, relying on advertising revenue, will be closed down. The announcement yesterday wiped 78% off the share value of its AIM-listed owner, Pure Entertainment Games.

The 750,000 registered users of the games site submitted their personal details and preferences and clicked on pop-up adverts in order to play the games for free. In December last year, Pure’s CEO Bob Dewar said he expected the company to reach profitability ahead of its target.

However, the company yesterday said that the reduced spend on internet advertising coupled with the need to expand overseas to break even forced closure of the Freeloader.com site with a consequent loss of around 40 jobs. In a statement, it added that rescue talks failed and it did not see a new fundraising effort as a realistic option in current market conditions.

The company is reported to have enough cash to pay off outstanding debts.

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