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

The UK-based developer Coatsink, known for titles like Kingdom: Two Crowns and Islanders, is undergoing a restructuring process, which is anticipated to eliminate 50-60 jobs, representing a substantial portion of its workforce. This information was released by its parent entity, Thunderful, which indicated that Coatsink's co-development division has not been able to engage enough projects.

Thunderful announced that while some new projects have been acquired, the completion of major undertakings amid a tough co-development landscape has left the company unable to retain all current staff. Consequently, a consultation process with those impacted has commenced.

The studio aims to focus on ongoing and upcoming high-level projects, enhancing partner relationships and capitalizing on its solid commercial prospects to secure future contracts.

Presently, Coatsink is developing Men In Black: Most Wanted for Meta Quest headsets, following prior releases of Augmented Empire and Jurassic World: Aftermath for the same platform. Their latest offering was Islanders: New Shores, available for PC and Nintendo Switch.

Coatsink became part of Thunderful in 2020 through an acquisition valued at £23 million in cash and shares. The founders, Tom Beardsmore, Eddie Beardsmore, and Paul Crabb, exited the company in August, shortly after Atari gained a controlling interest in Thunderful.

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

Atari acquired 82% of Thunderful for $5.3 million after it had completed two rounds of restructuring, including closing and selling several segments and gaming studios. In an interview with GamesIndustry.biz, Atari CEO Wade Rosen praised Coatsink's abilities in co-development, stating it was a key asset for supporting their expanding teams Digital Eclipse and Nightdive.

Thunderful's recent financial update revealed a loss of SEK 320.8 million over the year ending in September. Revenue from co-development, including Coatsink's contributions, was SEK 71.6 million, with an adjusted EBITDA of SEK 10.4 million.