Quarterly earnings of $62.7 million recorded by playSTUDIOS in the first three months of the year.
playSTUDIOS Faces Challenges in Q1 2025, Focuses on Cost-Cutting and New Products
In the opening quarter of 2025, playSTUDIOS reported lower revenue and a net loss compared to the same period in 2024, spending the first few months of the year shaping up for a broader transition across their business.
The company's revenue clocked in at $62.7 million, marking a 19.4% drop from the previous year. With a net loss of $2.9 million, it represented a significant dip from the $0.6 million net income in 2024's Q1.
The revenue primarily came from the playGAMES segment, which accounted for $62.6 million. This figure indicates a 19.6% decline year-over-year. Within the segment, virtual currency sales generated $50.7 million, witnessing a nearly $10 million drop compared to 2024's Q1. Meanwhile, advertising revenue dropped by 32% to $11.9 million.
However, playSTUDIOS demonstrated a mixed performance with its virtual currency sales channels. Sales through third-party platforms like app stores declined, bringing in $45.9 million. On the other hand, the company's direct-to-consumer sales grew by a whopping 113.9%, reaching $5 million.
CEO Andrew Pascal maintains a positive outlook, stating, "We are off to a focused and productive start in 2025 as we work through a broader transition across our business and industry." He highlighted the company's progress in several areas, such as the development of new sweepstakes features, expanding the direct-to-consumer options, refining the playAWARDS system, and working on a new casual game titled Tetris Block Party.
Operating expenses for the quarter totaled $65.5 million, with a loss from operations standing at $2.7 million. The company aims to save $25 million to $30 million annually through its ongoing restructuring plan.
Regarding the playAWARDS segment, Q1 2025 brought in $154,000, a stark contrast from the nonexistent revenue for that category in Q1 2024. Efforts to boost the segment include collaborating on a new tournament with Atlantis Paradise Island and partnering with more premium rewards providers.
A limited rollout of the company's sweepstakes product is planned during Q2 2025, with plans to expand it throughout the rest of the year.
Although facing difficulties, playSTUDIOS remains optimistic about its future, focusing on stabilizing its core business and exploring new growth opportunities.
- playSTUDIOS is aiming to save $25 million to $30 million annually through its ongoing restructuring plan, with a focus on cost-cutting.
- In an effort to boost the playAWARDS segment, playSTUDIOS is collaborating on a new tournament with Atlantis Paradise Island and partnering with more premium rewards providers.
3.The company demonstrated a mixed performance with its virtual currency sales channels, with sales through third-party platforms declining and direct-to-consumer sales growing significantly.
- playSTUDIOS is working on a new casual game titled Tetris Block Party, signifying an expansion into technology and gaming industry in their product portfolio.
