The game publisher and developer tinyBuild has published an update on the state of affairs. It reveals that the company is "actively considering short-term options to strengthen the balance sheet," and also confirms staff reductions.
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The main theses of the document:
- against the background of weak trading in October and in the fourth quarter as a whole, the company considers it likely that the level of annual revenue will be in the range of $40 to 50 million (for comparison, according to the result of a record last year, the company earned more than $63 million);
- moreover, the achievement of the upper limit depends on whether the company will be able to agree on the signing of a number of large contracts and on the results of the December auction;
- the company currently has no debts, but it has only $5.7 million at its disposal (at the same time, the company previously planned that by the end of December it would have between $10 and 20 million in its account);
- a separate significant cost item for tinyBuild now is the trial with the founder of Versus Evil, to whom she now has to pay $3.5 million (and this is not counting legal costs);
- at the same time, the work of Versus Evil itself does not satisfy tinyBuild (three of the four games of the purchased publisher had to be postponed to next year);
- against the background of all this, the company is introducing "accelerated cost reduction measures to bring investments in line with expected revenues";
- In particular, the company is preparing to raise up to $10 million.
As far as can be understood from the document, the layoffs that occurred (there are no words about the reduction, only two points indicate that they occurred — information about the reservation of funds for lump—sum payments for layoffs and the statement of founder and CEO Alex Nichiporchik at the end) is just the answer to the difficult situation in the company.
"We have not been able to overcome the weak demand for video games and the sudden change in market dynamics that favored us in previous years. We have implemented innovations in marketing, reoriented our catalog and adjusted the base cost as quickly as possible. But this was not enough in such a rapidly developing market," Nichiporchik said.
And then they further note: "It is physically painful to part with colleagues after all the work they have done in the company. The only reason justifying these decisions is that the company has entered a crucial stage, and I am obliged to do everything so that we can overcome this difficult period."