Automata (ATMTA), a game developer on the Solana blockchain, is planning significant layoffs to focus on developing Star Atlas. The reorganization will reduce the Automata team from 235 employees at the end of 2022 to just 45. ATMTA CEO Michael Wagner announced in a Discord post on July 24 that the restructured team will prioritize delivering SAGE and the newly released Crew mobile app, while development of the SDK that combines Unreal Engine 5 and Solana for the Star Atlas game will slow down.
Wagner explained that about 33% of the project's revenue comes from the in-game Star Atlas (ATLAS) token, which the team holds. However, the token has lost around 80% of its value over the past year. Additionally, the team had to deal with a significant tax bill of nearly $30 million, and the collapse of FTX resulted in a financial loss of about $15 million, representing a significant portion of their liquid cash balance.
Despite recovering a substantial portion of FTX's funding in January, the team's financial runway remains significantly shortened. Wagner also stated that completing the equity and debt financing agreement signed in January 2019 is unlikely. The current AAA-qual city development rate is high, capital-intensive , and unsustainable without a major shift in business strategy.
Meanwhile, the Solana blockchain has experienced its highest usage ever in the first half of 2023, boasting 100% uptime in the second quarter. The Solana Foundation has launched grants to support the ecosystem earlier this year.
