Mighty Coconut Update - Follow Up

Hey everyone, if you missed our earlier announcement, you can read it here. We're still heartbroken to be saying goodbye to so many talented teammates, and we're so grateful for everything they brought to this team.

There's been a lot of speculation about the layoffs and worry about the future of Walkabout. So I want to go a little deeper into what is happening.

Walkabout is not in danger of shutting down. We are still one of the better selling VR games. But VR is in a very tough place right now. That doesn't mean there's no revenue coming in. People are still buying the game and DLCs, so thank you to all of you who continue to support us. But at the same time, not as many people are buying the game and the DLCs as they used to. That's something almost every VR developer is facing at the moment for a wide variety of reasons: expensive hardware prices, the Quest ecosystem has tilted heavily towards free to play for younger gamers, and all of the big tentpole games from other studios have been cancelled. That means fewer new players are coming into VR, and there's nothing on the immediate horizon that looks to change that. I think the new glasses form factor many companies are focusing on is a step in the right direction, but this first iteration will be too expensive for a mass-market product.

The last 6 years have seen massive changes in the VR industry. We went from being a very small game to being a system seller. Lots of people were buying headsets to play Walkabout with friends, and many more got a headset and discovered us through word of mouth. Our studio expanded rapidly to keep up with that growth. The team grew from just me at the very beginning, to 3, to 8, then 12, and eventually to our biggest point where we had 36 people all on Walkabout. You can do the math to guess how expensive that is. But since that peak, revenue has gone down while costs have continued to go up, and we've been spending more than we've been making.

Several people have suggested raising prices or various other ways of increasing revenue. We’ve seen past price increases bring in more revenue per purchase, but also reduce the number of people purchasing to the point where it had little or even a negative effect. While there is a die-hard fan base who regularly offers to pay more, that's a relatively small percentage of our players. I don't want us to become a niche game that caters only to its most loyal fans and becomes too expensive to attract a wide audience. That approach is more akin to free-to-play mobile apps, and to work it requires leaning very hard on that 1% of players. That's not who we are, although I do want to thank all of those fans who have offered to pay more. We greatly appreciate the support, but I don't want to cash in on your generosity at the expense of the long-term health of the game.

So despite how bad it looks to see another round of layoffs, what you are seeing is us adapting (painfully) to the realities of VR and the game industry at large. If we were to continue to spend more than we make, then the company would ride that edge until it all collapsed. Instead, we are taking proactive measures to shrink down to a size that's sustainable and can continue to keep making Walkabout and other games. I wish that I had been able to predict exactly how much revenue would drop throughout this last year, but the world and especially the VR industry has been particularly unstable and difficult to predict.

As for the future, we still have a full slate of courses in the pipeline, and have begun work on more games. But the courses are going to have to be more focused so that we can polish them properly with the team we have. The next few releases will still be quite large because we work so far ahead that those courses are nearly done, but beyond that we're reigning in scope to make sure things can be done with this smaller team of 17 people. And once again, I want to say how thankful I am to all of the people playing, but especially to everyone who has worked on Walkabout throughout these last 6 years. It wouldn't be what it is without their immense talent.

And for those of you in the community who are looking for a way to help, the best thing you can do is keep playing, leave reviews, and welcome new players in. That’s the long term approach that will keep things sustainable for years to come.

Thank you,

Lucas Martell

Creator of Walkabout Mini Golf