It is difficult to find anything positive in the 2023 results of tinyBuild, whose turnover fell by 29% due in particular to the lack of juicy contracts (subscriptions, development partnerships, exclusivity agreements) and the troubles of Versus Evil, subsidiary which also closed its doors just before Christmas following the failure of Stray Souls. Still profitable in 2022 with a profit of 10.7 million euros, tinyBuild collapsed last year and shows an annual net loss of 58.7 million euros. Postponements and poor game sales caused a colossal depreciation of 45 million euros. Even if Punch Club 2 and I Am Future did well, the games released in 2023 have been so discreet that the back catalog represents 92% of tinyBuild's annual turnover, notably Hello Neighbor 2 and Potion Craft. As a result, tinyBuild's net cash position was only 2.3 million euros as of December 31, 2023 compared to 24.7 million euros a year earlier.
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Goodbye Neighbor
tinyBuild ended the year with a capital increase of 13 million euros, including 1.8 million from Atari, which now holds around 7.5% of the publisher's shares. Building on this new relationship, tinyBuild sold Total Reliable Delivery Service to Atari for an undisclosed amount as part of the return of the Infogrames label. Following this fundraising, Alex Nichiporchik's stake increased to 57.9% of the outstanding shares, which still makes him the main decision-maker. tinyBuild also sold the Not Games studio while retaining the Not For Broadcast propaganda simulator. Since the start of 2024, tinyBuild has also closed Moon Moose and Demagic studios.
So for tinyBuild, the time has come to change strategy and focus on a small number of titles capable of keeping players busy and generating revenue over a very long period. Alex Nichiporchik calls these “1,000 hour games” and believes two of his titles have the potential for lasting success, all without the need for a AAA budget. How ? By focusing on emergent gameplay, on somewhat self-sufficient games whose communities do not need developers to keep updating content to stay involved. Easier said than done, but Alex Nichiporchik has examples.
“ The easiest way to create a game like this is to bring in thousands of developers to produce huge amounts of content as part of a mega franchise. This is completely normal. But when I think about it, the amount of money invested in some of my favorite games is truly scary. So we took a different approach: we're looking for emergent gameplay based on interaction systems rather than content. Games where players can decide their own definition of victory. Games like Minecraft or DayZ, H1Z1, Rust, ARK, The Culling even “, explains the CEO, who also cites Palworld and Helldivers 2 whose success reinforces ” our strategy of investing in products with emergent and deeply replayable gameplay. »
The first of these games is Kingmakers, a mix of shooting and strategy that introduces modern military weapons into the midst of medieval battles. The kind of anachronism that can quickly go viral. The game is developed by the Road Redemption team. “ The announcement of this title demonstrates our approach to the production and commercialization of new intellectual properties. The trailer was viewed tens of millions of times on social media, propelling the game to the top 50 wish list on Steam within a matter of weeks. We are working hard to meet player expectations when the game launches », Comments the CEO.
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The other promise of the tinyBuild catalog is Level Zero: Extraction, a title initially announced two years ago as an asymmetrical multiplayer game but for which the Ukrainian studio DogHowl Games dared to change genre. “ Although it had initial success, we were concerned about the longevity of the concept. A year ago we got together with the design team, looked at the market and agreed we had an opportunity to move in an exciting direction “, explains Alex Nichiporchik. With the help of influencers, Level Zero: Extraction was re-announced as a horror-oriented mining game. “ The shortest way to describe it is Alien Isolation meets Escape from Tarkov, and it hit the target audience exactly as we intended. A new approach, with recorded live gaming sessions for influencers. This reignited interest in the title and allowed us to organize a public playtest in which nearly 100,000 players participated. »