PlaySide’s $12.1m Loss Highlights Risks Ahead of Critical Game Launches

Revenue and Profit Decline

PlaySide Studios Limited has reported a challenging financial year ended 30 June 2025, with revenues falling 25% to $48.7 million, down from $64.6 million the previous year. This revenue contraction was driven primarily by a sharp 45% drop in Original IP revenue, notably impacted by the absence of significant licensing fees from the prior year’s Dumb Ways to Die agreements, alongside a 7% decline in Work-for-Hire revenue.

The company swung to a net loss after tax of $12.1 million, a stark reversal from the $11.3 million profit recorded in FY24. Earnings before interest, tax, depreciation, and amortisation (EBITDA) also plunged to a loss of $7.5 million, reflecting both the revenue decline and increased selling expenses, particularly in user acquisition and marketing spend.

Leadership Changes and Operational Restructure

March 2025 saw a significant leadership change with the resignation of founder and long-time CEO Gerry Sakkas, who was succeeded by Chief Strategy Officer Benn Skender. Subsequently, in April, the company undertook a major operational restructure, resulting in 62 staff redundancies aimed at reducing the fixed cost base. This restructure is expected to deliver annualised cash savings of $4-5 million in FY26, although FY25 results were burdened by $1.7 million in one-off restructuring costs.

Capital Raising to Support Growth Plans

To bolster its financial position ahead of planned game launches, PlaySide completed a $6.6 million placement to sophisticated investors in July 2025, with proceeds received in early August. Additionally, the company launched a Share Purchase Plan targeting $3 million from existing shareholders, offering shares at the placement price of 20 cents each. These capital injections aim to fund marketing activities and support the rollout of new Original IP titles in FY26.

Looking Ahead – New Titles and Market Opportunities

PlaySide’s growth strategy hinges on the successful launch of several Original IP projects, including MOUSE – P.I. For Hire, a publishing deal with Poland-based Fumi Games boasting over one million wishlists on Steam, a console title based on the Dumb Ways to Die brand, and Game of Thrones – War of Westeros, developed under a licensing agreement with Warner Bros. Interactive and HBO. The company also continues to pursue new Work-for-Hire contracts and expand its publishing division, which debuted with the title Thrive – Heavy Lies the Crown in FY25.

While the company refrained from providing explicit financial guidance for FY26, management expressed confidence that the combination of new game launches, reduced operating costs, and fresh contract opportunities will underpin a return to revenue and profit growth.

Risks and Challenges

PlaySide faces several risks including the uncertain market reception of new game releases, reliance on third-party service providers, potential launch delays, and intense competition in the global gaming industry. Intellectual property protection and cybersecurity also remain critical concerns. The company’s ability to execute its growth plans while managing these risks will be closely watched by investors.