Snail, Inc. reported a significant decline in financial performance for the fiscal year ended December 31, 2022, with net revenue of $74.4 million, a decrease of 30.3% from $106.7 million in 2021. The company's net income also fell sharply to $1.0 million, down from $7.9 million the previous year. This downturn is attributed primarily to decreased sales of its flagship game, ARK: Survival Evolved, which accounted for 90.8% of total revenue. The decline in revenue was exacerbated by the absence of downloadable content (DLC) releases in 2022, compared to the previous year when the Genesis II DLC was launched.
In terms of operational metrics, Snail, Inc. reported a total of 5.8 million units sold in 2022, down from 7.0 million in 2021. Despite this, the company experienced a notable increase in game installs, reaching 36.7 million in 2022, largely due to promotional activities such as free week events on platforms like Steam and Epic Games. The average daily active users (DAUs) for ARK: Survival Evolved were reported at 305,376, with a peak of approximately 1.1 million DAUs in June 2022. The company maintained a diversified revenue base, with approximately 43.5% of revenue from consoles, 42.4% from PC, and 12.8% from mobile platforms.
Strategically, Snail, Inc. is focusing on expanding its ARK franchise in 2023, with plans for multiple DLC releases across various platforms, including a significant upgrade for PlayStation and Xbox. The company has also announced the launch of Ragnarok on the Nintendo Switch and aims to enhance its offerings on this platform. Additionally, Snail, Inc. is investing in its micro-influencer marketing platform, NOIZ, to bolster its marketing initiatives and eCommerce revenue. The company is also exploring international market expansion, particularly in South America, where it anticipates increased demand for video games.
The filing also highlighted a material weakness in internal controls over financial reporting, specifically related to accounting for income taxes and equity. Management is taking steps to address these issues, including enhancing control procedures and hiring personnel with relevant expertise. Looking ahead, Snail, Inc. remains optimistic about its growth prospects, emphasizing its commitment to innovation and the development of new content to engage its player base. The company is also focused on maintaining strong relationships with third-party distribution platforms, which accounted for 96.3% of its revenue in 2022.
About Snail, Inc.
Snail, Inc. is a global independent developer and publisher of interactive digital entertainment, specializing in sandbox survival games. Its flagship franchise, ARK, has over 90 million installs and continues to drive revenue through DLCs and new titles. With a focus on innovation and technology, Snail is expanding its offerings across platforms and enhancing player engagement through its micro-influencer platform, NOIZ. The company aims to capitalize on the growing gaming market and enhance its IP portfolio.
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