Hit-driven Revenue RiskHeavy dependence on individual game/IP success creates structural revenue volatility. Over 2-6 months this can lead to uneven cash flows and margin swings, requiring continual hit development, higher marketing spend and careful portfolio management to sustain growth.
Cash Flow VolatilityWhile cash generation is strong on average, historical free cash flow volatility signals operational sensitivity to title performance and timing of monetization. This makes multi-quarter planning harder and can force trade-offs between investment, dividends and debt repayment.
Past Losses & Fluctuating DebtA history of earlier losses combined with variable leverage increases refinancing and solvency risks during downturns. Management must sustain profitability and control leverage to avoid restricting strategic options like M&A, IP investment or buffering revenue shortfalls.