Coatsink is set to reduce its workforce by 50% in response to a "challenging co-development market"

The British game studio Coatsink, renowned for titles such as Kingdom: Two Crowns and Islanders, is undergoing a significant restructuring process. This will likely lead to the reduction of 50-60 positions, over half of its workforce. This development was reported by Coatsink’s parent company, Thunderful, which stated the studio has been spearheading its co-development efforts but failed to secure sufficient projects.

Thunderful mentioned that although Coatsink has landed new contracts, the completion of some of its largest endeavors and the increasingly difficult co-development landscape have impeded the company from maintaining its current staffing levels. A consultation period has started with the employees impacted by these changes.

The studio is poised to concentrate on current and upcoming major projects, aiming to enhance partner relations and capitalize on a strong commercial pipeline to seize new opportunities.

Currently, Coatsink is developing Men In Black: Most Wanted for Meta Quest. The studio had previously released titles like Augmented Empire and Jurassic World: Aftermath for the same platform. Its latest launch, Islanders: New Shores, was well-received on both PC and Nintendo Switch.

The studio is currently working on a Men In Black VR title, to release in December. | Image credit: Coatsink

Thunderful acquired Coatsink in 2020 for £23 million, consisting of both cash and shares. The original founders, Tom Beardsmore, Eddie Beardsmore, and Paul Crabb, exited the company in August, shortly after Atari's acquisition of a controlling interest in Thunderful.

Atari purchased an 82% stake in Thunderful for $5.3 million. This acquisition followed two rounds of restructuring and the sale or closure of several divisions and game studios. In an interview with GamesIndustry.biz, Atari CEO Wade Rosen highlighted Coatsink's proficiency in co-development as a significant asset, stating, "Our main, core dev teams with both Digital Eclipse and Nightdive have been growing so rapidly, and really need the support of other talented engineers."

According to Thunderful's latest financial report, the company recorded a total loss of SEK 320.8 million up to September. Revenue from co-development, which Coatsink contributed to, reached SEK 71.6 million during this period, with an adjusted EBITDA of SEK 10.4 million.