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Playtika to halt development of new games following rocky financials

Playtika’s Q4 2022 financials revealed a few key victories, and losses
Playtika to halt development of new games following rocky financials
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Playtika announced, in their recent financials, their decision to halt the development of new games in 2022 in favour of continuing to operate their current titles.

Their recent financials showed that their social casino games dropped 8.6% in contribution to total revenue, down to 45.3%. Meanwhile their casual games increased by 2.7% to 54.7% of total revenue. Revenue increased 1.3% year-on-year, but net income declined by 10.8% to $275.3m compared to $308.5m in the previous year. The slow growth in revenue is in contrast to 2021, where Playtika reported an 8.9% increase in revenue year-on-year.

However, the most interesting information was in a quote from president and CFO, Craig Abrahams released alongside the figures. “While we saw that our new games received positive feedback from our players and achieved strong retention numbers, the marketing environment and increasing CPIs for new games made it challenging for us to scale these games profitably. Based on the current marketing environment, we made the decision to temporarily suspend our new game development pipeline until the ROI for new games is economically viable.”

Although it may sound extremely dire, it is important to note that Playtika confirms games that are currently under development will remain in progress. Their announcement is emphasising that the company will simply not be bringing new titles to the table until the outlook is more favourable.

A rocky year for Playtika

Although 2023 does not mark a year of decline, it does show sluggish growth for the mobile company. This is despite a 4.7% increase in paying users (bringing the overall number to 314k). Playtika have been making major cuts in the past year while also aiming to expand by making major offers for studios such as Rovio, and many of the remarks made in their report emphasised their intent to streamline costs in the short term.

Robert Abrahams also emphasised that the studio would be leveraging new tech to grow their business. “With our existing portfolio of industry leading titles, we continue to focus our marketing efforts on higher quality traffic sources and generating ROI driven by our scale and AI technology.”

Playtika’s performance in 2022 is consistent with the post-covid slump. As many mobile publishers, developers and companies that made big money during the pandemic now see the market stabilise as the world (sort of) returns to normal. Although a crash is not expected, it does indicate that some companies such as Playtika are going to be buckling down for 2023.

In contrast, another major, long-term player in the mobile game industry, Supercell, is expanding. While UK-based Tripledot studios’ growth has been so rapid that it made the top spot in the Financial Times list of fastest growing European companies.