British studio Coatsink, creator of Kingdom: Two Crowns and Islanders, has commenced a restructuring process that is expected to result in the loss of 50-60 roles, more than half of the company. The news was announced by parent company Thunderful, which said that Coatsink was leading the firm’s co-development segment but had not secured enough work.
“New contracts have been secured, but with its largest projects wrapping up, and a more challenging co-development market, the business is currently unable to support all existing employees,” Thundeful said in a press release, adding that a consultation process has begun with affected staff.
“With a more concentrated focus, the studio remains well positioned to deliver on all existing and upcoming top-tier projects, strengthen partner value, and capitalise on its strong commercial pipeline to secure new opportunities.”
Coatsink is currently working on Men In Black: Most Wanted for Meta Quest headsets, after previously shipping Augmented Empire and Jurassic World: Aftermath for the same platform. Its most recent release was the well-received sequel Islanders: New Shores, for PC and Nintendo Switch.
Thunderful acquired Coatsink in 2020 for £23 million in cash and shares. Founders Tom Beardsmore, Eddie Beardsmore and Paul Crabb left the company in August, not long after Atari acquired a majority stake in Thunderful.
Atari paid $5.3 million for 82% of the business, which had undergone two rounds of restructuring and the closure and divestment of several sub-businesses and game studios. Atari CEO Wade Rosen spoke with GamesIndustry.biz in September and cited Coatsink’s strength in co-development as a benefit of the acquisition: “Our main, core dev teams with both Digital Eclipse and Nightdive have been growing so rapidly, and really need the support of other talented engineers,” he said.
Thunderful’s most recent financial report showed an overall loss of SEK -320.8 million in the year to September. Co-development revenue, which would have included Coatsink, stood at SEK 71.6 million for the period, with adjusted EBITDA of SEK 10.4 million.
