In early April 2026, Nasdaq formally issued a deficiency letter to Snail Inc. (stock code: SNAL), stating that the company failed to meet the continued listing standard for net income. This development places the game company, which only went public independently in the U.S. in late 2022 and has been operating for just over three years, once again on the brink of delisting. This marks the second time Snail Games has received a delisting warning from Nasdaq since its listing.
With a market capitalization below $22 million, Snail Games does not meet any of the three alternative listing standards. According to the deficiency letter, Nasdaq requires listed companies to satisfy at least one of the following conditions: net income from continuing operations of at least $500,000 in the most recent fiscal year, or in two of the last three fiscal years; a market value of publicly held shares of at least $35 million; or stockholders' equity of at least $2.5 million.
A review of Snail Games' 10-K annual reports for fiscal years 2023 to 2025 shows that the company only achieved profitability in 2024, while recording net losses in both 2023 and 2025. Additionally, the company fails to meet Nasdaq's alternative thresholds for both market capitalization and stockholders' equity.
In terms of stock performance, as of April 7, 2026, Snail Games' closing price had fallen to $0.525, representing a year-to-date decline of over 40%. Trading volume was minimal at just $2,623, indicating extremely low market activity. On April 1, the stock hit a historic low of $0.481. Based on approximately 37.75 million outstanding shares, the company's market capitalization is estimated to be below $20 million.
Under relevant regulations, Snail Games must submit a plan to regain compliance to Nasdaq within 45 calendar days, by May 11, 2026. If the plan is approved, Nasdaq may grant the company a grace period of up to 180 calendar days from the date of the deficiency letter to demonstrate that it has regained compliance with listing requirements.
The company's financial performance shows a dramatic decline, falling from a net profit of $1.8 million in 2024 to a net loss of $27.2 million (approximately 187 million RMB) in 2025, despite full-year net revenues of $81.2 million (approximately 559 million RMB) in 2025, slightly down from $84.5 million in 2024. The downward trend became apparent as early as mid-2025. In the second quarter of 2025, while net revenues reached $22.2 million, showing slight year-over-year growth, net profit shifted from a $2.3 million profit in the same period the previous year to a net loss of $16.6 million, primarily due to a significant increase in operating expenses.
The decline worsened in the third quarter, with net revenues dropping to just $13.8 million, a sharp decrease of 38.7% year-over-year, and the quarterly net loss widening to approximately $7.9 million. Both revenue and profit fell below market expectations. For the entire year of 2025, the company reported earnings per share of -$0.71 and accumulated net loss attributable to shareholders of -$26.373 million, representing a staggering decline of 3804.24% year-over-year.
The root cause of Snail Games' severe performance volatility lies in its highly concentrated revenue structure. Public information indicates that approximately 90% of the company's revenue comes from the represented "Ark" series products, with the largest contributor being "Ark: Survival Evolved," which the company has represented since 2015. In the first half of 2025, 91% of net revenue was derived from the "Ark" series, including "Ark: Survival Evolved" and the Unreal Engine 5 remaster "Ark: Survival Ascended." Even in the second quarter of 2025, the "Ark" series accounted for 90.8% of revenue, compared to 77.7% in the same period the previous year. In terms of revenue channels, about 90% of revenue comes from console and PC platforms, with PC accounting for approximately 45%, consoles 42%, and mobile around 10%.
However, excessive reliance on a single product line means the company is highly sensitive to any changes affecting the "Ark" series. Data shows that the average daily active users for "Ark: Survival Evolved" gradually declined from 276,000 in the first quarter of 2023 to 133,000 in the first quarter of 2024, a drop of over 50%. Furthermore, the company's decision to shut down official servers for the older version of the game and focus on promoting the separately sold Unreal Engine 5 remaster "Ark: Survival Ascended" at a price of 248 RMB sparked strong dissatisfaction among existing players. This move not only failed to effectively retain the user base but accelerated the loss of core users. According to SteamDB data, the peak concurrent player count for "Ark: Survival Evolved" remained around 60,000 to 70,000 in 2023 but dropped to approximately 40,000 by 2025.
Snail Games has not been idle in exploring new business avenues. The company has released several games in recent years, including "Bellwright," "West Hunt," and "Expedition Agartha." However, the revenue scale of these products pales in comparison to the "Ark" series, making it difficult to offset the decline from the core product in the short term. At GDC 2026, the company announced several new product plans, including "PixARK: World," "For The Stars," and "Goblin Squad." Additionally, the company announced a partnership with Loric Games to publish "Echoes of Elysium" and reported double-digit sales growth during the Steam Winter Sale. However, historical experience suggests that new games require a considerable period from launch to achieve commercial scale. With the delisting countdown already underway, these new titles may offer little immediate relief.
This is not the first time Snail Games has faced delisting risks. As early as July 2024, the company received a Nasdaq warning letter because its common stock closing price remained below $1 for 30 consecutive trading days. At that time, the company was given 180 days to bring the share price back above $1, a crisis it narrowly overcame. Yet, less than two years later, a more critical deficiency letter regarding net income has arrived, and the company has also breached the alternative thresholds for market capitalization and stockholders' equity. This means that even if the share price recovers, overcoming the profitability hurdle remains a stringent requirement.
For Snail Games, the independent listing was initially held with high expectations. Shi Hai, founder of Snail Digital, holds the vast majority of Class B ordinary shares through Olive Wood Global Development Limited, with the couple collectively controlling 96.9% of the voting rights. However, from the first-day trading below the offering price and the subsequent share repurchase plan, the company's journey in the capital markets has been challenging. Now, under the triple pressure of plummeting performance, depressed stock price, and over-reliance on a single product, the time left for Snail Games to prove its ability to operate sustainably is rapidly diminishing.
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