Mighty Kingdom changes leadership after big financial losses

The founder of Adelaide game developer Mighty Kingdom is stepping down as managing director after more than 12 years at the helm, following a series of “unacceptable” financial results in 2022.

Jan 18, 2023, updated Jan 18, 2023
Outgoing Mighty Kingdom CEO Philip Mayes. Photo: Supplied.

Outgoing Mighty Kingdom CEO Philip Mayes. Photo: Supplied.

Mighty Kingdom, one of Australia’s biggest independent game developers, informed the ASX today that its managing director and CEO Philip Mayes had “decided that the timing was right to hand over the reins”.

The company has tapped Adelaide entrepreneur Shane Yeend to be its new CEO, with his appointment to be finalised in the coming weeks during a leadership transition period.

Yeend, currently CEO of interactive streaming platform Gamestar+, took a significant equity position in Mighty Kingdom late last year when the company sought to raise additional capital to address its financial difficulties.

Gamestar+ now has an 8.9 per cent stake in Mighty Kingdom.

Mayes said he would remain a major shareholder and is “committed to making the transition as seamless as possible”. He still has a 25 per cent stake in the company.

“It has been a rewarding journey as the founder and managing director of Mighty Kingdom and I am grateful to have been able to assume this role for the past 12 years,” Mayes said in a statement.

“Watching the company grow from its foundations to where we are today has been a memorable experience.

“I remain incredibly confident about MK’s enormous growth potential and am also excited for the next chapter of my own journey.”

Mayes founded Mighty Kingdom in 2010 and oversaw its growth from a small team of developers into an ASX-listed firm with more than 160 employees.

However, the company suffered a significant financial downturn after going public in April 2021, posting a $10.8m loss in 2021-22, on top of a $7.14m loss in 2020-21.

Mighty Kingdom’s share price also dropped from its initial listing price of 0.26c to as low as 0.03c.

The poor financial results – attributed to game release delays and lower than expected sales – prompted the company to restructure in September 2022 and begin laying off an unspecified number of staff in a bid to save $350,000 a month.

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The company also began re-evaluating its original game development plans and decided instead to focus more on work-for-hire agreements and contract work.

In a foreword to Mighty Kingdom’s annual report to shareholders last year, Mayes wrote: “In hindsight, we tried to grow our Original IP business too quickly at the expense of underlying contract revenue and relied significantly on capital raisings to fund the cashflow burden of development without strong revenue growth.”

“The fall in share price, caused by us not meeting our goals and compounded by changes in the global market, is not acceptable and I take responsibility for my actions in not dealing with these challenges earlier,” he wrote in October last year.

“It has been a tough period since Mighty Kingdom listed in April 2021 and I reiterate that the team and I are committed to make the tough decisions required to turn around our performance.”

The company’s chair, former ABC managing director Michelle Guthrie, wrote to shareholders in November to “reiterate the company’s commitment towards turning around what has been an unacceptable fall in shareholder value”.

She told the ASX today that the changes in senior management “are part of the overall restructure and recapitalisation of the company and are being put in place to create a more sustainable business model and enhance the company’s outlook as we strive to unlock shareholder value”.

“Phil has been an exceptional driver of culture and growth for the business since its establishment and we are incredibly appreciative of the team he has built.

“We thank him for his leadership and wish him well in his next endeavours.”

Mighty Kingdom’s share price rose more than 32 per cent off the back of today’s announcement, trading at $0.041c shortly before the markets closed today.

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