Astragon Entertainment Increased its Revenues by 5% in the Last Financial Year

aastragon Entertainment, part of the Team17 Group, generated revenues of almost 41.9 million Euros in the last financial year. The Düsseldorf-based publisher, which specialises in simulation games, recorded growth of five per cent.

The British Team17 Group has published its annual report (April 2023 to end of March 2024). The group consists of three entities: Team17 Games Label, StoryToys and astragon Entertainment. The revenue of astragon Entertainment grew by five percent. The company from Düsseldorf launched three games (Tram Sim, Abriss and Howl), an existing first-party IP game released on additional platforms, and 16 paid DLCs for its existing IP with the introduction of five new brand licenses. Their working simulation games continued to perform strongly, driven by the launch of additional content across many games, including Police Simulator - Crime Scene Update and Firefighting Simulator - The Squad.

"Three of the top 5 game revenues across the Group come from first-party IP games and within the top 10 selling games there is a spread of games from each division with 5 from Games Label- 3 from astragon and 3 from StoryToys, demonstrating the breadth of the portfolio across the Group. The top ten selling games represent 60 percent of total revenues in FY 2023, which compares with 65 percent in FY 2022," states the company. All three cash generating units are contributing in line with expectations, with an increase in sales reported over the Black Friday and festive period. The Team17 Group revenues increased by 12 per cent to 159.1 million GBP (185.1 million Euros). The Games Label contributed 103.6 million GBP (121 million Euros) growing 12 per cent, StoryToys revenues grew 26 per cent to 19.5 million GBP (22.7 million Euros) and astragon delivered 36.0 million GBP (41.9 million Euros), up five per cent against a very strong FY 2022 comparative.

The Group's total first party IP revenues were 55.8 million GBP (64.9 million Euros), almost unchanged from last year. Hell Let Loose is one of the Group's top selling individual games, together with astragon's Construction Simulator and Police Simulator. Revenue from third party games grew by 20 per cent to 103.3 million GBP (120 million Euros), led by Dredge. "Growth was also seen in new release revenues to £45.5 million (FY 2022: £38.8 million) in FY 2023, a growth of 17%, coming from games including Trepang 2 and Blasphemous 2 alongside the aforementioned Dredge," can be read in the annual report.

As previously outlined in November 2023, a higher proportion of third-party games (which generate higher royalty payments) impacted gross margins in the period. "Revenues from astragon's first-party IP simulation games represented 47% (FY 2022: 44%) of the Group's first-party IP revenues and unlike the Games Label first-party IP games, these attract a royalty paid to astragon's dedicated development partners, which in turn further reduced the overall gross profit margin."

Development costs that were capitalised in the year increased from 26.1 million GBP to 32.2 million GBP (37.4 million Euros) of which 26,2 million Euros related to Games Label, 8.3 million Euros related to astragon and 3 million Euros related to StoryToys.

"Development cost amortisation charges grew to £12.7 million (FY 2022: £9.3 million). This results from an increase in capitalised development costs within astragon (which has typically larger development spend by game, similar to that invested in the Games Label's first-party IP games), together with an increase in development budgets for some larger third-party games within the Games Label division."

Team17 Group headcount decreased to 348 at 31 December 2023 (31 December 2022: 392), reflecting the impact of the Games Label restructuring and increased use of an outsourced studio resourcing model. "The headcount totals also reflect the addition of 45 employees that joined the astragon business following the acquisition of Independent Arts Software earlier in the year together with growth in headcount across astragon and StoryToys to support the broadening of the content portfolio in both businesses."

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