Declining Revenue And Persistent LossesSustained revenue decline and recurring net losses materially weaken the firm's ability to invest in content and user acquisition. Over months this erodes competitive position in fast-moving gaming markets, forces budget cuts, and increases reliance on external financing or asset sales to sustain operations.
Weak Cash GenerationConsistent negative operating and free cash flows mean the business burns cash to fund operations and growth. This undermines the sustainability of live-service games, constrains R&D and marketing investment, and raises the risk of dilution or debt-funded restructuring within a 2-6 month horizon.
Eroding Equity And Negative ROEDeclining shareholders' equity and negative ROE indicate capital erosion, reducing the balance-sheet buffer against downturns. Over time this can limit access to affordable credit, pressure covenant thresholds, and weaken investor and partner confidence, hampering strategic initiatives and long-term recovery.