Playside Studios (ASX:PLY) has seen its shares smashed out the gate on Wednesday, falling 30% to below 50cps as FY25 guidance came in well below FY24 actual.
The smallcap communication stock – and a unique company as far as Australia goes, given it’s a local video game developer – has well and truly missed expectations, leading to the landslide sell-off today.
The stock first landed on radars when it teamed up for more content with the creators behind ‘Dumb Ways to Die,’ a well known YouTube kids video. If you’re a parent, you probably have the tune in your head right now.
But that was then, and this is now. (More recently, Playside picked up rights to create a Game of Thrones game.)
The company’s update with FY25 guidance released on Wednesday expects FY25 earnings to be a maximum of A$5M. In fact, its range is “$0M – $5M.”
In FY24, earnings came in at $17.5M – so we’re not talking sheep stations here anyway, but, the Aussie company managed to eke out a space for itself in the crossroads between national pride and nostalgia.
Whether it can remain there, only time will tell.
“The last eighteen months in the industry have been marked by a period of substantial and persistent layoffs, which impacted the availability of opportunities for the Company’s Work for Hire business,” the company wrote on Wednesday.
(For a rundown on Work for Hire, read this here.)
“While management is proud to have operated profitably and grown the Company’s cash balance during this time, the majority of the Company’s recent Work for Hire contract signings consisted of extensions and expansions to existing work,” Playside further elaborated.
Some HotCopper users were happy Playside appears to be continuing its expansion push, but suggested perhaps people wanted a more cash-conservative approach.
“PlaySide will also commence a global marketing campaign to promote the Game of Thrones real-time strategy game, which (along with being a considerable investment in its own right) is a critical milestone in building anticipation for the title,” the company wrote on Wednesday of its latest sensational asset.
PLY last traded at 49cps.
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