Coatsink Announces Restructuring Due to Challenging Co-Development Landscape

UK-based game development studio Coatsink, renowned for its contributions to Kingdom: Two Crowns and Islanders, has initiated a restructuring effort, which is anticipated to impact approximately 50-60 positions, accounting for over half of the company's workforce. Parent company Thunderful disclosed the news, stating that Coatsink, which leads the firm's co-development segment, has struggled to secure sufficient projects. According to Thunderful, "although new contracts have been secured, the completion of major projects and a more competitive co-development market have resulted in the business being unable to support its current staff levels." The company has commenced a consultation process with the affected employees. Thunderful emphasized that "with a more focused approach, the studio is well-positioned to deliver on existing and upcoming top-tier projects, enhance partner value, and capitalize on its robust commercial pipeline to secure new opportunities." Coatsink is presently working on Men In Black: Most Wanted for Meta Quest headsets, having previously released Augmented Empire and Jurassic World: Aftermath for the same platform. The studio's most recent release was Islanders: New Shores, which received positive reviews on PC and Nintendo Switch. In 2020, Thunderful acquired Coatsink for £23 million in cash and shares. Following the departure of founders Tom Beardsmore, Eddie Beardsmore, and Paul Crabb in August, Atari acquired a majority stake in Thunderful. Atari's $5.3 million investment in Thunderful, which secured 82% of the business, was seen as a strategic move, given Coatsink's co-development capabilities. Atari CEO Wade Rosen highlighted the benefits of this acquisition, stating that "our core development teams, including Digital Eclipse and Nightdive, have been expanding rapidly and require the support of talented engineers." Thunderful's latest financial report revealed an overall loss of SEK -320.8 million for the year ending in September. Co-development revenue, which includes Coatsink's contributions, stood at SEK 71.6 million, with an adjusted EBITDA of SEK 10.4 million.