Solana game developer Automata announces mass layoffs

“It is with a heavy heart that I am writing today to share news about team restructuring efforts we are effectuating today,” wrote CEO and co-founder Michael Wagner.

Solana game developer Automata (ATMTA) will undergo “a significant headcount reduction” to preserve its ability to develop Star Atlas. After the restructuring, the Automata team will comprise just 45 staff, compared to 235 in late 2022.

According to the July 24 announcement on Discord, Michael Wagner, CEO and co-founder of ATMTA, said the restructured team will instead shift its focus to “delivering SAGE and the newly announced Crew Mobile App.” Meanwhile, the development of a software development kit (SDK) combining Unreal Engine 5 and Solana will “resume at a significantly slower pace.” The SDK serves as the basis for the Star Atlas game.

In explaining the changes, Wagner wrote that approximately 33% of the project’s revenue was taken as in-game token Atlas, which the team “steadfastly held.” The token has lost approximately 80% of its value in the past year. In addition:

“We also had to pay a material tax liability approaching $30 million. And as many of you already know, we lost approximately $15 million from our treasury with the collapse of FTX, which represented a significant portion of our liquid cash balance.”

Developers said that the team managed to recover a “sizable portion” of the FTX funds in January, but runway remains “greatly reduced.” Wagner also stated that it was “unlikely” for the project to close an equity and debt financing deal signed in January.

“It is a hard truth that our current high rate of AAA-quality development is capital intensive and, at present, unsustainable without a significant shift in business strategy.”

At the same time, the Solana blockchain recorded all-time high usage in the first half of 2023. The network had a 100% uptime in Q2. The Solana Foundation introduced grants to support the ecosystem earlier this year. 

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