Shares in Frontier Developments PLC (AIM:FDEV) fell then rose 9% to 129.1p after the video games developer posted interim results that showed a swing to losses, which was in line with updated guidance from November.
Revenue for the six months to 30 November was down 16% to £47.7 million, with adjusted EBITDA losses increasing to £4.9 million from £0.6 million.
As the company abandoned its attempt to diversify away from its core creative management simulation (CMS) games expertise, it swung to a loss before tax of £33.1 million from a profit of £6.7 million a year earlier, including £2.5 million of restructuring costs and a previously flagged impairment of £16.9 million.
Cash stood at £17.1 million at the end of the period, down from £42.6 million a year before.
The results confirmed that the back-catalogue delivered 72% of total revenue in the period, with £26.3 million from its CMS games catalogue that includes RollerCoaster Tycoon 3, Planet Coaster, Planet Zoo, Jurassic World Evolution and Jurassic World Evolution 2.
Alongside the strategic refocus to CMS games, an organisational review in recent months has included redundancies and other cost savings to return the group to profit.
Looking to the second half of the year, two existing PC games are coming to consoles, with 'Warhammer 40,000: Chaos Gate - Daemonhunters' to be released on PlayStations and Xboxes from 20 February and a second title to be announced in the next few weeks.
Shares in the company have fallen more than 70% over the past year as it ditched its third-party publishing arm and then found that sales from new game releases was also lower than expected this past year, sinking to multi-decade lows in December.
Chief executive Jonny Watts said: "2023 was a challenging year for Frontier and for many companies across the games industry" but he said the group is confident that a renewed focus on CMS games is "getting us back on track".