Frontier Developments, the UK-based game studio known for titles like F1 Manager 23 and Planet Coaster, is planning to lay off an undisclosed number of employees in a bid to reduce operating costs, according to reports by gamesindustry.biz.
A trading update released by the company today revealed that Frontier has been facing financial challenges. Their most recent financial reports indicated an 8% decrease in revenue for the year ending on May 31. Adding to the financial woes, the operating loss for the same financial year amounted to a significant $32 million / £26.6 million. This is a stark contrast to the previous year when they recorded an operating profit of $1.83 million / £1.5 million.
In response to these financial setbacks, the company’s leadership has announced plans to “reshape Frontier.” This involves a strategic shift to refocus on their core strengths after experiencing a period of disappointing financial performance and more challenging industry conditions.
The primary objective of this plan is to reduce annual operating costs by 20%. Frontier intends to achieve this target through a combination of cost-cutting measures, a freeze on recruitment, and a yet undisclosed number of staff redundancies following a consultation period.
One contributing factor to these financial challenges was the underwhelming performance of last year’s F1 Manager 22, which sold below expectations, prompting Frontier to revise their revenue projections in January.
Despite these setbacks, Frontier has assured its investors that the developer’s upcoming titles will continue to meet expectations. The release of “Warhammer Age of Sigmar: Realms of Ruin” is on the horizon, with a scheduled launch date of November 17 for PS5, Xbox Series X|S, and PC.
Frontier’s situation is not unique, as various game studios have been grappling with challenges. Just last month, Epic Games, the developer behind Fortnite, laid off over 800 employees, which accounted for roughly 16% of its workforce. In addition, Polish studio CD Projekt Red saw multiple waves of layoffs over the last three months, resulting in over 9% of their workforce losing their jobs.
