PlaySide Studios reported a sharp 28% revenue decline for H1 FY26 but posted a remarkable 249% jump in profit, buoyed by cost cuts and a $7.8 million tax rebate. The company also secured a $6 million loan and inked a new global publishing deal.
- Revenue down 28% to $20.4 million
- Profit after tax up 249% to $7.9 million
- Digital Games Tax Offset claim of $7.8 million recognised
- Raised $8.4 million via equity and secured $6 million loan
- Signed global publishing agreement for 2028 game release
Revenue Decline Amid Shifting Project Mix
PlaySide Studios Limited’s half-year results for the six months ending 31 December 2025 reveal a complex financial picture. Total revenue from ordinary activities fell 28% to $20.4 million, driven by a significant drop in both Original IP and Work-for-Hire revenues. The previous period had benefited from major licensing fees, including a substantial Dumb Ways to Die agreement, and multiple large external projects that were not repeated this half.
Profitability Surges on Cost Discipline and Tax Offset
Despite the revenue headwinds, PlaySide’s profit after tax soared 249% to $7.9 million. This turnaround was largely due to a $7.8 million Digital Games Tax Offset claim recognised during the period, alongside substantial cost reductions. The company cut employee benefits expenses by $6.7 million through headcount reductions and capitalising more employee costs to IP development. General and administrative expenses also dropped sharply, reflecting lower consulting and publishing fees, while selling expenses fell due to reduced marketing spend on key titles.
Strengthening the Balance Sheet and Financing Moves
PlaySide ended the half with a net cash position of nearly $14 million, slightly up from June 2025. The company raised $8.4 million through a private placement and share purchase plan in mid-2025, and post-period secured a $6 million loan against the FY25 Digital Games Tax Offset claim. This loan, involving entities linked to directors and the CEO, provides liquidity ahead of the expected tax rebate receipt and is repayable by October 2026.
New Publishing Deal and Future Growth Prospects
Looking ahead, PlaySide signed a global publishing agreement with Swedish developer MVRX Games for the upcoming title Dew, expected to launch on PC and consoles in 2028. The deal includes development advances and marketing support, with PlaySide to receive a share of net revenues. The company is also investing in business development personnel across the UAE and Germany to boost its project pipeline, aiming to secure new contracts and support upcoming Original IP launches like MOUSE: P.I. For Hire and Game of Thrones: War for Westeros.
Navigating Uncertainty with Confidence
While the directors express confidence in the company’s ability to continue as a going concern, they acknowledge material uncertainty tied to the timing and success of future game launches and contract wins. The company’s liquidity and operational performance will be closely watched, especially given the reliance on the Digital Games Tax Offset and the need for potential capital raises if forecasts are not met.
Bottom Line?
PlaySide Studios’ impressive profit rebound masks underlying revenue challenges, setting the stage for a critical period of execution and growth.
Questions in the middle?
- Will upcoming Original IP launches meet revenue expectations to sustain growth?
- How will the new publishing deal with MVRX Games impact long-term profitability?
- What are the risks if the Digital Games Tax Offset claim or loan repayment timelines shift?