London tech startup Improbable saw its operating losses rise by almost two thirds to £63.7m million in the year ending May 31 2019.
The firm's accounts, which have just been released to Companies House, show that its revenues reached just £1.2 million during the year, which was more than double the £580,000 achieved in the twelve months ending May 2018.
However, research and development costs of £17.4 million (up 62% year-on-year) and administrative expenses of £47.6 million (up 67%) contributed to the firm's operating losses rising from £38.5 million to £63.7 million.
The company attributes this to its "strategic focus [on] growth" for the year in question, nothing that during this period it introduced its technology to the Chinese market and expanded its Edmonton development studio.
Early commercial traction in its Defence offering also prompted investment in growing the London and Virginia branches of the company. Improbable increased its headcount by 48% over the course of the year and expanded its operations in Canada -- all of which increased the startup's operating expenses.
A spokesperson told GamesIndustry.biz that the team "remains confident that we have the resources to deliver on our strategy" and that the accounts "do not reflect the major changes to the company which took place in the nine months since [they] were closed."
Improbable is currently working on its SpatialOS cloud computing solution, which enables larger and more complex simulations. While it has applications in a number of other fields, the startup has been using video games to demonstrate its potential, promising that the tech enables developers to build colossal worlds with a sense of permanence.
The poster child was Bossa Studio's Worlds Adrift, an MMO that permanently marked the consequences of player actions, such as wrecked ships and felled trees, and had a wildlife system that saw creatures continuing to more around and reproduce even when all players were offline.
But the studio announced in May 2019 it would be closing the game after just over a year in Early Access.
This was followed by the closure of Spilt Milk Studios' Lazarus and Mavericks: Proving Grounds developer Automaton Games entering administration. Without these titles, the only visible games applications of SpatialOS are Midwinter Entertainment's Scavengers and NetEase's Nostos.
These losses, however, have not discouraged the startup.
"At Improbable, we believe that the future of gaming is multiplayer, and we have invested to build products and services to support developers looking to make any kind of multiplayer game -- and also to make our own games, which will also drive the development of our technology," the spokesperson said.
"That means Improbable in March 2020 is a very different company," the spokesperson said.
Improbable rose to prominence in 2017 when it secured an investment of $500 million from Japanese firm SoftBank. At the time, the deal valued the company at over $1 billion, making it one of the most valuable startups in the UK.