Solana game developer Automata experiences significant layoffs
Automata, a game developer on the Solana blockchain, recently announced a major reduction in its workforce in order to focus its efforts on the development of Star Atlas. The company will be downsizing from 235 employees to just 45. According to Automata CEO and co-founder, Michael Wagner, the team will now shift its focus to delivering SAGE and the newly announced Crew Mobile App. The development of a software development kit (SDK) for the Star Atlas game, which combines Unreal Engine 5 and Solana, will slow down significantly.
The announcement also outlined some financial challenges faced by the company. Automata held approximately 33% of its revenue in the form of the in-game token Atlas, which has seen an 80% decrease in value over the past year. Additionally, the company had to pay a tax liability of $30 million and lost $15 million from its treasury due to the collapse of FTX.
The team was able to recover a portion of the funds lost from FTX in January, but the company’s runway has been greatly reduced. Wagner stated that it is unlikely for the project to secure an equity and debt financing deal that was signed earlier this year. The current high rate of AAA-quality development is unsustainable without a significant shift in business strategy.
The Rise of Solana
Despite the challenges faced by Automata, the Solana blockchain has been experiencing significant growth. In the first half of 2023, Solana recorded its all-time high usage, and the network achieved 100% uptime in Q2. The Solana Foundation has also introduced grants to support the ecosystem.
While the layoffs at Automata may be a setback for the company, it is important to note that the Solana blockchain continues to thrive. As the team focuses on delivering SAGE and the Crew Mobile App, there is still potential for success in the Solana gaming ecosystem.
It remains to be seen how Automata will navigate these challenges and whether the company’s new strategy will lead to long-term sustainability. In the meantime, the Solana community will be closely watching the developments within the ecosystem and supporting the growth of the blockchain.
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