(News Bulletin 247) – Focus Home Entrainement plunges on the Paris Stock Exchange, after seeing its half-yearly accounts fall into the red. The French video game publisher cites disappointing sales of its game Atlas Fallen and depreciation charges which put margins under pressure.

Rough weekend for Focus Home Training. The title of the video game publisher fell by more than 30% on the Paris Stock Exchange in the wake of half-yearly accounts, which clearly fell below market expectations.

If the group saw its billings jump by 30% to 85 million euros in the first half of 2023/2024, closed at the end of September, the bottom of the income statement is less flattering. The gross margin stood at 20.7 million euros, reflecting a corresponding margin of 24% compared to 38% in the first half of the previous financial year.

Profitability suffered significantly over the period with gross operating income (Ebita) falling into negative territory, at -1.5 million euros, where the group was amply profitable at 10.9 million euros. in the first half of the previous financial year.

Sales below expectations

Weaker-than-expected sales of its action-adventure game Atlas Fallen had a negative effect on its profitability. At the end of August, the company indicated during a laconic “progress update” that sales of this game were below initial expectations, and this “despite the qualities of the game and in a very intense competitive context” .

On Steam, this game only received a rating of 6/10. And the criticisms of the specialized press are not kind to the game either. Gameblog plants its banner and then estimated that “the story of Atlas Fallen clearly has nothing exciting and that’s good too bad, because on paper, the universe is deep, complex and elaborate. Unfortunately, the first hours of the adventure do very little to advance the scenario and the chaotic narration of the title penalizes it.

But this “partial” failure does not explain everything, insists TP ICAP Midcap. Margins were also put under pressure due to an “aggressive amortization policy”. Focus Home has in fact indicated that the significant number of launches this half-year has increased depreciation charges within the gross margin and the increase in game marketing costs compared to the same period last year.

The bottom line follows the same path. The group recorded a net loss of 11.5 million euros over the half-year, compared to a profit of 1.4 million euros last year.

A better 2024/2025 financial year?

Focus Home Entrainement also specifies that no game outings are expected in the third quarter. However, Charles-Louis Planade of TP ICAP Midcap is confident for the second half, which “looks better” and even more “next year which promises to be very strong and will benefit from this year’s delays”.

“The end of the financial year will be marked by Banishers and Expeditions, games released at the end of the financial year and which will naturally have a favorable effect on 2024/2025. This year will be that of the launch of Space Marine 2, potentially the biggest game in the history of the group”, continues TP ICAP Midcap which remains a purchase on the file, with its objective however lowered to 28 euros against 33 euros previously after these degraded results.

On the Paris Stock Exchange, the stock has lost more than 70% since the start of the year, a loss which amounts to 80% since its peaks in June 2021.