(AsiaGameHub) –   Playstudios, a social casino operator, saw its Q1 2026 revenue drop by 7% year-over-year to $58.4 million, as the social casino industry continues to face difficulties.

For the quarter, the firm recorded a net loss of $10.7 million, up from a $2.9 million loss in the prior year’s first quarter. Adjusted EBITDA experienced a significant decrease to $3.6 million, with margins shrinking to 6.1% from the 19.9% reported in Q1 2025.

According to CEO Andrew Pascal, the financial performance was a result of persistent softness in the company’s established social casino titles, though he noted advancements in shifting the business toward future expansion.

Playstudios is shifting its focus toward its playSWEEPS sweepstakes initiative, which involves growing “The Win Zone” and incorporating “POP! Slots” by the end of Q2 2026. Despite mounting regulatory scrutiny of sweepstakes gaming across various US states, the company noted that initial trends in user engagement and monetization are promising.

Concurrently, Playstudios is moving forward with its “Renewal” restructuring plan to cut expenses and boost operational efficiency. This plan involves shutting down four studios, cutting 177 jobs, and boosting AI infrastructure spending to optimize workflows. The firm anticipates the program will yield between $33 million and $39 million in further savings, adding to the $29 million already realized.

Even with these savings measures, spending on user acquisition grew substantially during the quarter, jumping from approximately $10 million to almost $17 million, while overall operating costs rose by nearly 10% compared to the previous year.

Playstudios stated that its current approach involves the careful management of its social casino assets to maintain profitability and enhance product performance over the long term. Due to the nascent stage of its growth plans, the company has declined to provide formal financial outlooks.