East Side Games turns a profit in Q2 as it moves further out of the red

• East Side Games made a profit of approximately $631,000 in Q2 2024
• The company turned a profit despite lower revenue and higher cost of sales

Canadian games studio East Side Games continued its move out of the red this last quarter, making a profit of approximately $631,000 in Q2 2024.

This marked a stark improvement over Q2 2023’s loss of $132,000.

In fact, the studio turned a profit this quarter despite declining revenue from $21.3 million in Q2 2023 to $20.5 million in Q2 2024. Adjusted EBITDA also fell year-on-year, meanwhile cost of sales grew higher.

Making a profit in spite of this was possible in no small part due to reducing operating expenses, at $12.4 million in Q2 2024 compared to $15.2 million one year earlier.

The developer has laid off 20% of its workforce in the past year.

Going green

With this latest $631,000 profit, East Side Games’ net income for the first half of 2024 totals $2.5 million, up dramatically from a $1.2 million loss in the first half of 2023.

It’s a stark turnaround in spite of falling revenue, and the company is continuing to launch new games rather than simply riding the results of reduced expenses. Cheech and Chong's: Kush Kingdom was launched in the second quarter as East Side Games’ second title in the match-3 games market.

The developer also spent $5.7 million on user acquisition in Q2. Meanwhile, advertising revenue fell from 25% of total revenue to 24%, comparing Q2s. This totalled $4.8 million in the latest quarter.

Daily average users were also down year-on-year, having fallen by 15.8% to approximately 230,000. Monthly average users fell by 5.3% to roughly 897,000. However, those declines were less dramatic than last year’s, when DAU fell by 21.3% and MAU by 29.4%.

Moving forward

To further bolster profitability moving forward, East Side Games is focusing more tightly on its IP-driven games and partnerships, promoting "talent density", and continues to realign company structure. "Significant" investments have also been made into Bud Farm: Munchie Match, which saw almost a 50% increase in average topline revenue this Q2.

"Our team delivered another strong quarter with continued stability through the first half of the year," said East Side Games CEO Jason Bailey.

"We grow stronger every quarter as we increase our cash balance, diversify our portfolio, invest heavily in our future, and, most importantly, build a strong base of knowledge and experience, which will allow us to dominate new genres with exceptional IP game launches."

Please note: East Side Games’ financials are reported in Canadian dollars.