Solana game developer Automata (ATMTA) has announced that they will undergo a significant reduction in their workforce in order to prioritize the development of Star Atlas. The restructuring will result in a team size of just 45 staff members, a significant decrease from the 235 employees they had in late 2022.
CEO and co-founder of ATMTA, Michael Wagner, stated in a Discord announcement on July 24th that the restructured team will shift its focus to delivering SAGE and the newly announced Crew Mobile App. The development of a software development kit (SDK) that combines Unreal Engine 5 and Solana will resume at a much slower pace. This SDK serves as the foundation for the Star Atlas game.
Wagner explained that approximately 33% of the project’s revenue was held in the form of in-game token Atlas. However, the value of this token has decreased by around 80% in the past year. Additionally, the team had to deal with a material tax liability of nearly $30 million and suffered a loss of $15 million from their treasury due to the collapse of FTX, a significant portion of their liquid cash balance.
While the team was able to recover a sizable portion of the FTX funds in January, their financial runway has been greatly reduced. Wagner also mentioned that closing an equity and debt financing deal, which was signed in January, is unlikely at this point.
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The announcement from Automata comes at a time when the Solana blockchain is experiencing record-high usage in the first half of 2023. The network achieved 100% uptime in Q2 and the Solana Foundation introduced grants earlier this year to support the ecosystem.
It is clear that Automata’s decision to reduce their workforce is a result of the financial challenges they have faced, including the decline in the value of their in-game token and the loss of funds from the collapse of FTX. The high rate of AAA-quality development that the project has been pursuing is capital intensive and unsustainable without a significant shift in business strategy.
Despite these challenges, the Solana network continues to thrive, demonstrating its reliability and growing ecosystem. The grants provided by the Solana Foundation are a testament to their commitment to supporting developers and projects on the platform.
As the Automata team moves forward with their restructuring, it is essential for them to carefully prioritize their resources and focus on delivering their key projects, SAGE and the Crew Mobile App. This shift in focus will enable them to navigate the current financial landscape and work towards sustainable growth.
In conclusion, Automata’s decision to undergo a significant headcount reduction is a strategic move aimed at preserving their ability to develop Star Atlas. While the project has faced financial challenges, the Solana blockchain’s record-high usage and grants provided by the Solana Foundation demonstrate the ongoing potential of the platform. By refocusing their efforts and prioritizing key projects, Automata can position themselves for future success in the rapidly evolving blockchain gaming industry.
