Don't Nod 2021 Half-Year Results

Key insights

6 takeaways

01
Dontnod raised €50 million in early 2021, resulting in a strong liquidity position of €62.9 million in cash and cash equivalents as of June 30, 2021.See it on page 3
02
Operating revenues grew 19% to €12.8 million, supported by a 92% increase in operating EBITDA to €3.3 million.See it on page 2
03
The company is executing a strategic shift toward self-publishing, evidenced by a 62% decline in publisher fees and a tripling of royalty revenues to €2.7 million.See it on page 1
04
Capitalized production costs doubled to €7.8 million as the studio ramps up development on seven active projects scheduled for release between 2022 and 2025.See it on page 1
05
The current development pipeline consists of five self-published titles and two co-productions, with the studio leveraging a partnership with Tencent to expand its narrative-driven portfolio.See it on page 3
06
Operational efficiency was maintained through tight control of operating expenses during the transition to a permanent hybrid work model and the relocation of Paris and Montreal offices.See it on page 3

Summary

DONTNOD Entertainment’s 2021 half-year results demonstrate a successful transition toward a self-publishing business model, characterized by increased investment in original intellectual property and strengthened financial liquidity. During the first half of 2021, the French independent studio reported a 19% increase in operating revenues to €12.8 million, driven largely by a doubling of capitalized production costs to €7.8 million. This shift reflects the company’s strategic focus on developing seven active projects, including five self-published titles and two co-productions, scheduled for release between 2022 and 2025.

Financial performance metrics highlight a significant improvement in operational efficiency. Operating EBITDA, including video game tax credits, rose 92% to €3.3 million, compared to €1.7 million in the same period of 2020. While publisher fees declined by 62%—a byproduct of the move away from traditional third-party publishing—royalty revenues tripled to €2.7 million, supported by the back catalog and the title Twin Mirror. The company maintained tight control over operating expenses, which saw only modest growth despite the ramp-up in production activity.

The studio’s balance sheet was substantially bolstered by a €50 million capital raise in early 2021, resulting in cash and cash equivalents of €62.9 million by June 30, 2021. This liquidity provides the necessary capital to sustain long-term development cycles and support the expansion of marketing and publishing departments. Operationally, the company has finalized the relocation of its Paris and Montreal offices and implemented a permanent hybrid work model. Moving forward, the studio intends to leverage its strengthened financial position and strategic partnerships, including its collaboration with Tencent, to capture greater value from its original narrative-driven game portfolio.