Ten Square Games (TSG) has reported a remarkable financial turnaround in the first quarter of 2024, generating more net profit than the entire previous year. Despite a challenging start marked by declining bookings in its top games, the company's net profit for Q1 2024 reached PLN 17.9 million ($4.6 million), surpassing the total net profit of PLN 15.2 million ($3.9 million) for the whole of 2023.

When comparing Q1 results, this year's profit stands in stark contrast to Q1 2023, where TSG reported a loss of PLN 12.8 million ($3.3 million), partially due to a one-off expense of PLN 6 million ($1.5 million). The improved performance reflects a significant recovery, given that 2023 saw the company's lowest net profit since 2017, a stark difference from the high of PLN 151.6 million ($38.5 million) in 2020. This decline prompted a shift in strategic priorities.

One key factor contributing to the profit surge is the rapid growth and increased contribution of the TSG Store. This platform allows TSG to retain revenue from players purchasing in-game currency outside of traditional app stores, thereby avoiding hefty fees imposed by Apple and Google.

In terms of revenue, Ten Square Games reported Q1 earnings of PLN 100 million ($25.4 million), with over PLN 90 million ($22.9 million) stemming from mobile games. Notably, Fishing Clash generated almost two-thirds of the company’s revenue, earning PLN 61.2 million ($15.6 million) in the first quarter. Hunting Clash followed with revenues of PLN 23.7 million ($6 million).

The 2022 release, Wings of Heroes, contributed PLN 2.9 million ($736,000) in Q1 and was noted for surpassing short-term targets due to improved metrics. However, KPIs for Fishing Clash declined, with net bookings falling by 11% quarter-on-quarter, and Hunting Clash’s bookings dropped by 10%. Overall, TSG’s total bookings decreased by 8.1% quarter-on-quarter, reflecting reduced player activity since Q4 2023.

Despite these declines, Hunting Clash achieved record user numbers, averaging 3.5 million monthly players in Q1. Strategic partnerships with companies like Beretta have driven interest, prompting the game to recalibrate for its growing user base, which saw an 82% increase in monthly active users towards the end of last year.

Magdalena Jurewicz, TSG's CFO, highlighted the company's resilience: "Despite unfavorable macroeconomic conditions, cost discipline and a focus on creating added value by all teams allowed us to end Q1 2024 with positive financial results at every level. Additionally, we executed a share buyback worth PLN 114.5 million, a record in the company’s history, demonstrating our commitment to returning value to our shareholders."

CTO Janusz Dziemidowicz added: "Our dedication to data-driven processes and technological innovation allows us to address core issues hindering growth. By focusing on automation and AI, we eliminate repetitive errors and empower our teams to concentrate on creative and strategic initiatives."

In a related industry development, Sega's recent strategic shift has led to its strongest financial performance in over a decade, signaling broader positive trends in the gaming sector.

Source: adapted from an article by Aaron Astle, News Editor for Pocketgamer.biz.