Don't Nod Restructures Following Underperformance of Recent Games
– 2 min read
Don't Nod's revenues have been hit by the commercial underperformance of recent launches in an "extremely competitive and concentrated market". As a result, the French company has announced a reorganisation initiative to get the business back on track. This could affect up to 69 employees.
Independent games publisher and development studio Don't Nod has released its half-year results for 2024 and announced a reorganisation. Oskar Guilbert, Chairman & CEO of Don't Nod, stated: "Our half-year results for 2024 reflect the economic underperformance of our latest release, despite solid ratings on Metacritic, as well as the accounting impact of the decisions we had to take. The initial performance support measures announced last spring no longer seem sufficient to maintain the company's competitiveness. As a result, today we presented a reorganisation project to the employee representative bodies, which could set Don't Nod on a new development trajectory. I am fully conscious of the impact this project may have on all our employees. Securing our company's resources and restoring its ability to perform more in an increasingly competitive and selective industry is extremely necessary."
For the first six months of fiscal year 2024, Don't Nod reported an eleven per cent decline in operating revenues to €14.6 million - mainly driven by the back catalogue (Vampyr and the Life is Strange license) and contributions from Jusant (released end of October 2023) and Banishers: Ghosts of new Eden (released mid-February 2024), lower development revenues, the absence of new games in co-production, as well as a decrease in capitalised production due to the temporary suspension of two projects in the conception phase. The consolidated net loss for the first half of 2024 was €42.3 million, compared with €866,000 last year.
Write-downs have already been made in September 2024, a partial write-down of €24.0 million for Jusant and Banishers: Ghost of New Eden, "whose estimated future sales, in a particularly saturated market, are unlikely to generate sufficient revenues to cover all the development costs capitalized for these two games. A full write-down of €7.6 million to temporarily put two projects in Paris on hold (P12 and P13), to prioritize resources and maximize the chances of success for the most promising titles at present," the company said.
Don't Nod: "To bolster sales potential and increase partnership opportunities with industry leaders, project conception phases have been reoriented to reach a wider audience. In this context, the company has re-evaluated the capitalized developments within Project P10 which will no longer be pursued, resulting in the scrap of €8.4 million in assets at June 30, 2024. As a result, the Group recorded a non-recurring expense of -€8.4 million at June 30, 2024, compared to -€1.3 M€ at June 30, 2023."
In the face of the declining results and despite the measures already taken, the company is now forced to consider a reorganisation. This could affect the company's workforce in France, affecting up to 69 jobs. The aim is to rationalise the number of production lines, strengthen the role of the editorial committee in order to respond better to market expectations, restore greater flexibility, and secure the company's financing. Don't Nod will continue the ongoing developments: Lost Records: Bloom & Rage (first episode scheduled for February 2025 and the second for March 2025), P10 and P14 (scheduled for release before the end of 2027).
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