Poland's Ten Square Games hit by exodus of pandemic players

By Mateusz Rabiega

GDANSK (Reuters) -Polish mobile games producer Ten Square Games reported on Tuesday a 63% drop in net profit for last year due to a post-pandemic exodus of players.

Net profit came in an 52.3 million zlotys ($12.1 million) on a 15% drop in revenue to 538.6 million zlotys.

"2022 was another unprecedented period, (...) we experienced a natural outflow of users gained during pandemic ... an attempt to further grow the number of players turned out to be impossible," Chief Executive Officer Maciej Zuzalek said in a letter to shareholders.

He said customer retention and recruitment were hindered by higher prices and closing access to the company's games to players from Russia and Belarus, following Russia's invasion on Ukraine in February 2022.

In his letter, Zuzalek said this year was likely to prove difficult and volatile, and the company would focus on growing the size and diversity of its games portfolio, including developing new title "Wings of Heroes". It will also update its main growth strategy to accommodate future challenges.

The net result was also affected by a 14.5 million zloty writedown booked for the development cost of two games.

In 2022, in-game user payments - a key source of revenues in mobile gaming - totalled 542 million zlotys, down from nearly 650 million zlotys the year before.

The company's flagship games "Fishing Clash" and "Hunting Clash" made a total of 478 million zlotys from in-game payments in 2022, versus more than 597 million zlotys the year before.

($1 = 4.3175 zlotys)

(Reporting by Mateusz RabiegaEditing by David Goodman and Mark Potter)