Unprofitable OperationsOngoing net losses and low gross margins indicate the company struggles to convert sales into earnings. This undermines retained earnings, limits reinvestment in content, and raises reliance on external capital unless operational margins improve.
Weak Cash GenerationZero operating and free cash flow is a structural concern: it forces dependence on financing for production and growth, constrains ability to pay suppliers or fund new IP, and reduces resilience to revenue volatility over the medium term.
Limited Internal ScaleA small employee base limits in-house production capacity and marketing reach versus larger studios. This increases reliance on external partners and contractors, which can raise costs, slow output cadence, and constrain scalable control of projects.