FinancialNacon
Interim Financial Report for the Six Months Ended 30 September 2021
1 Oct 202130 pages~65 min full read
NACON lowered its 2021/22 revenue guidance to €150–180 million due to the strategic delay of four major titles, while setting a higher revenue target of €250–300 million for 2022/23.
First-half revenue for the period ending 30 September 2021 fell 15.7% year-on-year to €73.0 million, with net income declining to €3.8 million from €9.6 million in the prior year.
Cash and cash equivalents decreased from €111.5 million to €57.3 million, primarily driven by aggressive studio acquisitions and rising game development costs.
The company expanded its internal development ecosystem through the total acquisition of Passtech Games, Big Ant Holding, Crea-ture Studios, and Ishtar Games, increasing total goodwill to €73.8 million.
Gaming accessories remained the primary revenue driver at 60% of total sales, with the hardware segment successfully managing global electronic component shortages through proactive procurement.
Financial liabilities include over €26 million in earn-out structures contingent upon the future performance and critical reception of acquired studios.
NACON experienced a transitional first half for the 2021/22 fiscal year, characterized by a strategic pivot toward long-term development despite immediate financial headwinds. Revenue for the period reached €73.0 million, representing a 15.7% year-on-year decline from a high comparison base established during the 2020 lockdowns. Net income fell to €3.8 million, down from €9.6 million in the prior year, as the company navigated a lighter release schedule and normalized operating expenses. Gaming accessories remained the primary revenue driver, accounting for 60% of total sales, while the hardware segment successfully mitigated global electronic component shortages through proactive stock procurement.
The company aggressively expanded its internal development ecosystem through the total acquisition of Passtech Games, Big Ant Holding, Crea-ture Studios, and Ishtar Games. These business combinations, along with the full integration of RaceWard, increased total goodwill to €73.8 million and net intangible assets to €111.6 million. This expansionary phase led to a significant reduction in cash and cash equivalents, which dropped from €111.5 million to €57.3 million, reflecting heavy investment in studio acquisitions and rising game development costs. Financial liabilities were further impacted by earn-out structures totaling over €26 million, contingent on future performance and critical reception.
Management adjusted its short-term outlook by lowering 2021/22 revenue guidance to €150–180 million following the strategic delay of four major titles. However, these delays are intended to ensure product quality and have resulted in an increased revenue target of €250–300 million for the 2022/23 fiscal year. Despite ongoing legal disputes regarding intellectual property and the operational uncertainties posed by the pandemic, the company maintains a robust financial position with no new provisions required. The focus remains on scaling internal production capabilities to drive future growth across the global gaming market.
