In response to changing market conditions, Ten Square Games announces new strategic priorities. The company focuses its activities on the development of core games, resigning from additional projects. Ten Square Games adapts the employment structure to new plans and the current market potential, focusing on the profitability. Despite the challenges that were reflected in the Group’s results in Q1 2023, Ten Square Games increased the level of cash from operations and recommended the payment of nearly 100% of the consolidated net profit generated in 2022 to shareholders.
– The global mobile gaming market is consolidating, adding to the already fierce competition in the industry. Which is why, we decided to refocus strategic goals on our most important and prospective titles. After a large internal reorganization, we are currently in the process of redesigning the processes related to the execution of projects. We want to solidify Fishing Clash and Hunting Clash as leaders in their market segments and prepare Wings of Heroes for further scaling.- says Andrzej Ilczuk, CEO of Ten Square Games.
In Q1 2023, bookings from the games of Ten Square Games Group amounted to PLN 123.6 million, which means a decrease compared to both – Q1 2022 and Q4 2022. This is primarily the result of lower bookings in Fishing Clash, the company’s main title. The Company’s second title – Hunting Clash – recorded stable results with bookings of PLN 32.4 million. On the other hand, Wings of Heroes, supported by increased marketing expenditure, recorded PLN 5.8 million in bookings. Thanks to increased investments in marketing campaigns, the Wings of Heroes team has thoroughly tested the title, which is now entering an intensive phase of building monetization depth. It will last at least the next few months.
– Our main goal is to get Fishing Clash back on the path of growth, unlock the full development potential of Hunting Clash and accelerate the process of building monetization depth for Wings of Heroes, – says Ilczuk. – While it may take at least a few months before our actions are reflected in the Group’s results, we are confident that revising our strategic priorities will help rebuild the performance of our major games. – he adds
The change in the strategic priorities of the Group was related to the termination of two projects – Fishing Masters and Undead Clash, which resulted in a write-off of capitalized costs related to their production. The cost of write-offs created in Q1 2023 amounted to PLN 26.6 million and had a significant impact on the amount of the operating loss, which amounted to PLN 14.4 million. By closing two projects and adapting the organization to new goals, Ten Square Games underwent a restructuring process, as a result of which in April 2023 110 people parted ways with the Company. The costs related to the layoffs amounted to PLN 6.5 million, and the Company estimates cost savings resulting from this process at approx. PLN 1.8 million per month, starting from May 2023.
In January 2023, Ten Square Games increased its stake in Gamesture to 36.9% by purchasing 12% of the company’s shares for approximately USD 2.7 million. The Management Board of Ten Square Games is pleased with the progress in the development of the Gamesture’s product portfolio. In addition, the level of bookings from Gamesture games increased compared to both Q4 2022 and Q1 2022. The Krakow-based studio used the proceeds from the transaction to increase marketing expenses and its games deliver promising initial parameters. In June 2023, the company plans a soft launch of the game – Hero Legacy. Thanks to the support of artificial intelligence, Gamesture aims at releasing several new titles in the social wars genre later this year. Ten Square Games treats the Krakow studio as a long-term investment that provides the Group with further prospects for development and diversification of the product portfolio.
The Ten Square Games Group ended Q1 2023 with adjusted EBITDA of PLN 27.6 million, which means a decrease compared to the result from Q4 2022 and Q1 2022. This is mainly the result of the deterioration of Fishing Clash’s results. Despite this, the Company is increasing the level of cash generated – cash and cash equivalents amounted to PLN 140.3 million at the end of Q1 2023.
– Ten Square Games systematically generates cash from operations, which ensures the stability and financial security of the entire Group and allows for investments. In addition, the generated funds are also shared with the Company’s shareholders. This year, due to the change of strategic priorities for the near future, we decided to recommend the payment of almost 100% of the consolidated net profit for 2022 in the form of a dividend. This proposal deviates from our standard dividend policy, which provides for the payment of up to 75% of the consolidated net profit – says Magdalena Jurewicz, Member of the Management Board and CFO of Ten Square Games.
Ten Square Games published financial results for Q1 2023 and announced new strategic priorities on May 22, 2023. All materials are available on the Company’s corporate website: https://tensquaregames.com/pl/inwestorzy/.
The Ten Square Games Group is a producer of mobile games in the free-to-play model. It consists of about 400 people working in studios in Wrocław, Warsaw and Bucharest. Ten Square Games S.A. acquired the Rortos studio in Verona, as well as a minority stake in the Krakow Gamesture studio. The Group’s portfolio includes, among others: Fishing Clash, one of the world’s most popular 3D fishing simulators, Hunting Clash, a realistic hunting simulator, as well as Airline Commander, one of the most recognizable flight simulators, and Wings of Heroes, which premiered globally in October 2022.
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