Thunderful CEO says restructure is "off to a good start" as it reports full-year loss of $60m

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Thunderful CEO Martin Walfisz has said the company's restructure is "off to a good start" as the group releases its full-year financial results.

For the twelve months ended December 31, 2023, the company posted a loss of SEK 609.4 million ($59.2 million), compared to a profit of SEK 121.2 million ($11.8 million) in the previous year. While Thunderful's games segment posted a stable quarter for sales, there were substantial losses in its distribution business due to declines for its Nordic Game Supply and Bergsala subsidiaries.

Thunderful announced it was implementing a restructuring program last month, anticipating that around 20% of its workforce will be laid off.

At the end of 2023, the company stood at around 500 employees spread across 30 subsidiaries.

"Although the work has just begun, we’re off to a good start in reviewing the structure of the Group and coming to a shared view on how it should be managed in the future," wrote Walfisz in the company's financial report.

He said the restructure is designed to "address past overinvestments" and reduce annual costs by SEK 90 to 110 million ($8.7 million to $10.7 million), which is expected to take full effect by the second half of 2024.

Thunderful is also continuing to explore a potential sale for Headup, the Bridge Constructor publisher it acquired in an €11m deal back in 2021.

"[Headup's] business, which focuses on releasing relatively small indie games, does not fit with Thunderful’s new strategy," Walfisz explained. "Furthermore, Thunderful does not need two separate publishing operations and the Group’s game publishing activities will be channelled solely through Thunderful Publishing going forward."

The need to restructure was identified by the new management team, following a leadership shakeup in December, as well as Thunderful's board of directors. Walfisz himself has only been CEO of Thunderful for around six months.

"When I assumed this role, I did not foresee that we would have to carry out such a thorough restructuring as we have now begun, but there is no doubt that the Group will be in a stronger financial position once it is completed," he said.

Declines in Thunderful's distribution business were largely attributed to the struggles of Nordic Game Supply. The company will conduct a business review to "assess how we can best capture the value available within [this business]."

Thunderful also commented on how Bergsala, the exclusive distributor for Nintendo products in the Nordic region, has seen revenues decline due to weaker sales of Switch hardware. However, Walfisz said this is "a natural consequence" of the console approaching its eighth year on the market, adding that Thunderful is"looking forward to the launch of Nintendo's new console," which is now rumoured to be arriving in 2025.

In terms of game sales, Thunderful actually saw a record high in Q4, although sales of SteamWorld Build (which released on December 1) "fell slightly short of expectations."

"We believe this is because the genre of this game has not really appealed to our most dedicated target audience and it has not been well-suited to the Switch console, which has traditionally been a key platform for SteamWorld games," Walfisz explained.