(Reuters) - Unity Software shares sank more than 15% on Tuesday after the videogame software provider's 2024 forecasts came in below Wall Street estimates, a sign that its turnaround was taking longer than expected.
The company, which makes a toolkit used by videogame developers including the maker of the popular "Pokemon Go" mobile game, in November announced a "reset" after an attempt to impose a new "runtime fee" pricing sparked a developer revolt.
The so-called "company reset" includes workforce reduction in the first phase while the second phase focuses on reviving revenue growth, expected to accelerate in the second half of 2024.
Still, the San Francisco-based company forecast full-year 2024 revenue between $1.76 billion and $1.80 billion, below estimates of $2.31 billion, per LSEG data.
"The top-line continued to be pressured by the ongoing portfolio reset, as well as competitive pressure within the Grow segment," said analysts at Piper Sandler.
The company said its Grow business, which allows customers the ability to grow and commercialize their content, was facing a more competitive environment.
Restrictions in China were also impacting growth in its Create segment as the business mostly consists of customers developing games in the country.
Unity said in January it would cut about 1,800 jobs in what would be its largest layoffs ever and fourth round since July 2022.
The company estimated roughly $195 million in employee separation costs to be recognized in the first quarter.