In January, Thunderful Group announced that it was laying off 20% of its workforce in a restructuring program it said was necessary “for strengthened long-term competitiveness”. In a Thursday, November 14, 2024 update, the company announced a new strategic restructuring program that includes scaling back internal game development.
“Thunderful Group AB announces today the implementation of a strategic restructuring program within its Publishing segment aimed to increase the focus on third-party game publishing while reducing investments in internal game projects,” the company disclosed through its website.
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The restructuring will lead to layoffs and the cancelation of internal game projects including the spiritual successor to Somerville codenamed ThreeOne which has been in development for almost two years.
Thunderful Group hopes to gain cost savings and improve its cash flow by 80 to 90 MSEK. Through the reduction of headcount, the group hopes to achieve a one-time cost reduction of 23 to 30 MSEK in Q4, depending on the outcome of its negotiations with labor unions.
Thunderful Group believes that focusing on external publishing rather that internal game development will allow them to reduce “fixed costs and allow for greater flexibility, enabling faster, diverse game releases”. The restructuring is scheduled to start immediately.
“It is regrettable to announce a second restructuring of Thunderful in less than a year, but we unfortunately see no other alternatives in order to ensure the Group’s long-term sustainability and resilience,” said the CEO of Thunderful Group Martin Walfisz.
“The strategic move towards publishing games from external partners allows us to reduce fixed costs, increase flexibility, and better control our cash flow. We have many talented and dedicated employees, and it is with great regret that we are forced to part ways.”
Around 80-100 employees are expected to be impacted by the restructuring. The large portion of the layoffs will happen in the development team while a smaller number of redundancies will happen within the management and administration both in and outside Sweden.
Thunderful Group’s subsidiary Jumpship heavily impacted
One of Thunderful Group’s internal development studio that will be impacted by the restructuring program is Jumpship. The studio was founded in 2017 by Dino Patti who was formerly the CEO and Co-founder of Playdead and Chris Olsen who previously worked in the movie industry.
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On November 15, 2022, the same day as the launch of their game Somerville, the studio was acquired by Thunderful Group. Since then, the studio has been working on a successor to Somerville. However, as part of the current restructuring, Thunderful has canceled the project.
“As part of a broader strategic shift, Thunderful Games has recently announced a series of redundancies, and I’m sad to announce that this will affect our talented team at JUMPSHIP,” explained Patti on LinkedIn. “The team was working on the spiritual successor to Somerville – codename #ThreeOne.”
Patti said the situation was “deeply moving and disappointing” and said he was still negotiating with Thunderful Group to ensure his team gets proper redundancies. He also has a word for anyone hoping to sign a deal with Thunderful in the future;
“When that is said, if you are a game company considering a partnership or being published by Thunderful, I strongly encourage you to reach out to me before signing anything. I can provide valuable insight that may save you and your team considerable challenges in the future. Additionally, to members of the press following this story, please feel free to reach out.”
Two months ago, Thunderful completed its transition to a video game-focused company, divesting all its distribution businesses in the first half of 2024. It was a significant shift in the company’s business model.
What do you think about the new development at Thunderful, especially terminating internal game development? Share your thoughts in the comment box below.
