Shares in Winking Studios (WKS:AIM) have fallen as much as 55% year-to-date after the Singapore-based video games services company reported a 70.5% fall in full year net profit for the year ending 31 December.

The company, which enjoyed a very positive initial reaction to its November 2024 IPO, said in February its gross full year 2024 profit margin was affected by lower gross profit margin from the two newly acquired art outsourcing studios, On Point Creative and Pixelline. This could prompt some scepticism about the company’s recently announced capture of Mineloader. 

The company, which is engaged in a collaboration with Taiwan’s Acer Inc (2353:TPE), said that its distribution and marketing expenses had increased 39.5% or $600,000 to $2.2 million in full year 2024.

The increase in spend was due to more investments in promotional activities to expand into overseas markets resulting in increased business travel and marketing costs.

Winking, whose core business involves offering outsourced game art services to the industry, likely hasn’t been helped by the volatile market backdrop given the implications this has for sentiment towards smaller growth companies.

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