Shares in gaming group, Team17 are currently down 41% to 185p after it warned that some titles were “not meeting internal expectations.”
The company said that it did expect revenue over the year to be “modestly ahead” of market expectations, pointing out that it was making the announcement ahead of the important trading periods of Black Friday and Christmas.
“Despite this overall robust revenue performance,” read the statement, “certain titles within the Games Label are not meeting internal expectations, resulting in a less favourable mix between higher margin own-IP titles and third-party titles (with higher royalty payments) than anticipated.
“In addition, the Group was too slow to address some project overspends and has faced some delays in implementing key cost initiatives at Team 17 Games Label. These are now at advanced stages and will continue to bring benefits into next year.”
The company added that it “continued to be pleased” with the performance of astragon and StoryToys.
However, since its results earlier this year and following “post Covid-19 dynamics” it had “re-evaluated the cost structure within Team17 Games Label to align with its core competencies as an indie game developer and publisher.”
Last month, it confirmed that it had begun a period of consultation ahead of expected job losses.
It added that it would also be reviewing a number of titles which were under development and some which had already launched, to assess “revenue potential in the current market environment, which is expected to result in impairments recognised in FY23.”
Currently it expects to deliver full year adjusted EBITDA of “at least” £28.5m, which includes non-cash title impairments of up to £11.5m.
Looking ahead to 2024, it stated that there was an “exciting schedule of high-quality new releases planned across the Group” and that they expected to see an “improved underlying trading performance” compared to this financial year.
