Next Games has laid off 26 staff as the company reported total losses for 2018 of €17 million ($19m).
Operating losses increased from the previous year when the company reported a loss of just over €5m ($5.6m). Revenue however was up to €35.2m ($39.7m) for 2018, from €32.4m ($36.6m) the year prior.
During the half-year July to December period, sales grew by 90 per cent year-on-year to €24.8 million ($28m). At the same time losses for this period grew to €12 million ($13.5m), greater than the loss of €4.2m ($4.7m) the year prior.
2018 saw the launch of location-based augmented reality game The Walking Dead: Our World, which released in July.
However the launch was said to be marred by “technical challenges”. While now fixed, Next Games said it had to scale back on marketing, affecting revenue. However it still pointed toward high marketing expenses for Our World affecting profitability also.
Its currently in soft-launch title Blade Runner Nexus remains in development. The company however terminated a collaboration with Universal Games and Digital Platforms on another project in January this year, despite the title reaching the production phase.
Next Games does still however have another licence agreement signed as of Q3 2018 for what the studio claims is an “extremely sought-after licence”. It also has a new project in the works without a licence currently attached to it.
Focus on profitability
As the company struggles with increasing losses, this month it has laid off 26 staff, reducing its headcount from 143 to 117. Chief product officer Emmi Kuusikko has also left the company to "pursue new challenges".
Moving forward, the company plans to focus on the profitability of its existing titles, while it has put nearly half of its staff to work on new projects.
“I expect the company’s turnaround project to be concluded during the first half of 2019, after which we will see much better alignment across projects as well as improved operational efficiency across the company,” said Next Games CEO Teemu Huuhtanen.
“The investments made in 2018 have been a significant cornerstone to build a solid foundation for the company’s product pipeline. Next Games has an extraordinarily committed staff and I look forward to together continue develop the company, our culture and values further in 2019.”
In its financials report, Next Games noted that should its turnaround project not be successful, or no additional capital is raised, “it may carry a significant risk relating to the company’s ability to launch new titles and it may affect overall liquidity for the company".