Hello Neighbor publisher, tinyBuild has revealed a trading update that shows the company has been performing below expectations and that they’ve settled their legal dispute with Versus Evil.
In a trading statement released today from tinyBuild to shareholders, the company has shared they are “trading below expectations in Q4, after unusually weak trading in October and FY23 revenues are now likely to be between $40-50 million.” This is reported with the fact tinyBuild has just settled a legal dispute with Versus Evil, where the claimant said the publisher had “breached three material obligations” including not providing Versus Evil with “timely capital contributions” after tinyBuild’s acquisition in 2021.
The trading statement says tinyBuild themselves are on the hook for the “$3.5 million Global Settlement Agreement (in addition to legal costs) in respect of claims made by the Founder of Versus Evil,” and it is applied to the statement’s overall outlook. It’s worth mentioning the most striking section of the statement is where tinyBuild mentions “Accelerated cost action to re-align investments with expected revenues,” which CEO Alex Nichiporchik details a few methods of solving. It’s also worth mentioning that according to Google Finance, since this trading statement was released, the tinyBuild stock has fallen nearly 50% today.
According to a Telegram statement titled “Gamedev We Deserve” the publisher has also started a wave of layoffs that have not been officially confirmed by the publisher yet. The report details that 10-30% of Serbian-based employees have been affected by the alleged unannounced layoffs, but no announcement has been made by the publisher regarding the nature of the alleged layoffs just yet.
CEO Alex Nichiporchik states “2023 has been an incredibly challenging year. The whole team at tinyBuild worked tirelessly to release our best products, despite the impact of the war in Ukraine that deeply affected most of us. We couldn’t overcome weak demand for video games and the sudden reversal of market dynamics that had favoured us over the previous years,” including a send-off for let go employees “It’s physically painful to part ways with colleagues after all the good work they put into the Company.”
While the CEO’s statements confirm tinyBuild is in a bad spot and nearly confirms the reported layoffs, it remains to be seen as to how many the alleged layoffs have affected until an official report regarding the layoffs surfaces.
