Gemini

PCF Group Current Report No. 2/2024: Short-Term Production Agreement for Project Gemini

The report announces the conclusion of a short-term executory agreement that extends the content-rider attached to the production-publishing contract for the AAA title Project Gemini.

• PCF Group signed a short-term agreement on 30 January 2024 to continue work-for-hire development on the AAA title Project Gemini following the expiration of the previous contract rider.
• The company is downsizing the Project Gemini development team, resulting in a workforce reduction of more than 30 employees.
• The agreement serves as a bridge while PCF Group and publisher Square Enix Limited finalize strategic decisions regarding the project’s future scope and collaboration.

Current Report No. 59/2023: Decision to Limit the Scope of Project Dagger – Correction

The correction clarifies a corporate decision by PCF Group S.A., headquartered in Warsaw, to temporarily limit the scope of its internally funded Project Dagger.

• PCF Group S.A. has suspended the AAA release schedule for Project Dagger, originally planned for the 2025–2026 window.
• The majority of the Project Dagger development staff is being reallocated to three other internal projects: Maverick, Bifrost, and Victoria.
• A core team of approximately ten members will remain on Project Dagger to redefine its development direction and create a new pre-production version based on external feedback.

Current Report No. 58/2023: Strategic Talks Regarding Project Gemini

The board of PCF Group S.A., headquartered in Warsaw, announced the initiation of strategic negotiations with long-standing group publisher Square Enix Limited concerning the development model and commercial terms of the Gemini game project.

• PCF Group S.A. has entered strategic negotiations with Square Enix Limited to redefine the development model and commercial terms for the 'Gemini' game project.
• The current 'Gemini' project is being executed under a work-for-hire arrangement, but the board anticipates a high probability that future delivery terms will diverge from the existing contract.
• As of 24 November 2023, PCF Group continues to develop the project according to the original contractual framework while negotiations are ongoing.

Półroczne Sprawozdanie Zarządu z Działalności Grupy Kapitałowej PCF Group S.A. i Spółki PCF Group S.A.: za okres 1.01.2023 – 30.06.2023

PCF Group S.A. underwent a significant strategic transition during the first half of 2023, shifting its focus toward self-publishing and Game-as-a-Service models while maintaining a robust global presence across Poland, North America, and Europe.

• PCF Group raised approximately 235 million PLN through Series F and G share issuances, securing Krafton, Inc. as a 10% anchor investor to fund its 2023–2027 growth strategy.
• The company reported a net loss of 13.1 million PLN on 68.7 million PLN in revenue, representing a 24% year-over-year decline in revenue.
• Revenue remains highly concentrated, with over 75% derived from a single work-for-hire contract with Square Enix and no royalty payments received for Outriders to date.

Report on Operations of the Capital Group and PCF Group S.A. in 2022

The 2022 Management Board Report for PCF Group S.A. outlines a pivotal strategic transition for the organization as it shifts from a traditional work-for-hire model toward a self-publishing, Games-as-a-Service (GaaS) framework.

• PCF Group S.A. is transitioning from a work-for-hire model to a self-publishing, Games-as-a-Service (GaaS) framework, targeting 3 billion PLN in revenue by 2027.
• The company is scaling a development pipeline that includes projects Gemini, Dagger, Bifrost, and Victoria, supported by strategic partnerships with Square Enix and Krafton, Inc.
• In 2022, the group generated 171.5 million PLN in sales revenue, though net profit declined due to high investment costs and the restructuring of the Project Dagger agreement to regain full IP rights from Take-Two Interactive.

Results Presentation: First Nine Months 2022

This analysis outlines the financial and operational performance of PCF Group S.A. (People Can Fly) for the first nine months of 2022.

• People Can Fly is aggressively pivoting from a work-for-hire model to self-publishing, evidenced by a surge in development work in progress from 25.9 million PLN at the end of 2021 to 95.7 million PLN by September 30, 2022.
• The company experienced a financial contraction in the first nine months of 2022, with EBITDA falling to 40.3 million PLN from 54.9 million PLN and net profit dropping to 42.1 million PLN, largely due to the termination of a major development agreement with Take-Two Interactive.
• The studio is scaling its global operations rapidly, increasing its total headcount by 44% from 425 employees in September 2021 to 614 by September 2022 across nine locations in Europe and North America.

Financial Results Presentation: Half Year 2022

PCF Group S.A. presents its financial and operational results for the first half of 2022, highlighting a period of steady growth and strategic expansion.

• PCF Group S.A. achieved a 17.2% revenue increase to 90.6 million PLN and a 17.5% net profit rise to 25.5 million PLN for the first half of 2022.
• The company is executing a dual-track production strategy aiming for at least one game release annually starting in 2024 through a mix of publisher-funded and self-publishing models.
• Investment in development work in progress surged by 152.9% during the period, signaling a significant ramp-up in production activity across the group's seven active projects.

Mid-Year Consolidated Financial Report Q1 2022

PCF Group demonstrated robust financial growth during the first quarter of 2022, characterized by a 63% year-over-year increase in sales revenues to PLN 50.4 million and a 78% rise in net profit to PLN 13.9 million.

• PCF Group reported strong Q1 2022 growth with a 63% year-over-year increase in sales revenue to PLN 50.4 million and a 78% rise in net profit to PLN 13.9 million.
• The Work-for-Hire segment remains the company's primary financial driver, contributing PLN 12.88 million to the bottom line.
• As of March 31, 2022, the Group had not received royalties from the title Outriders because net proceeds had not yet recouped the publisher's initial production and distribution costs.

Management Board Report on Activities of the PCF Group S.A. 2021

PCF Group S.A. (People Can Fly) experienced a transformative 2021 fiscal year, marked by its transition to a public issuer and a significant expansion of its global corporate structure.

• PCF Group achieved significant financial growth in 2021, with sales revenue rising 74% to 180.3 million PLN and net profit increasing 150% to 61.3 million PLN.
• The company’s revenue model is heavily concentrated, with 99% of income derived from work-for-hire AAA partnerships and over 80% of total revenue coming from only two major publishers, Square Enix and Take-Two Interactive.
• As of year-end 2021, the self-published title Outriders had not yet reached the profitability threshold required to trigger royalty payments to the Group.

Directors' Report on the Operations of PCF Group S.A. and Its Group in 2020

The 2020 Directors' Report for PCF Group S.A. details a period of significant financial expansion and strategic organizational restructuring for the Poland-based video game developer.

PCF Group Q1 2021 Financial Results Presentation

PCF Group’s financial results for the first quarter of 2021 demonstrate continued growth in revenue and operational scale, driven by ongoing development partnerships and strategic expansion.

• PCF Group reported Q1 2021 revenue of PLN 30.9 million, a 19.1% increase year-on-year driven by development partnerships with Square Enix and Take-Two Interactive.
• Net cash flow surged by 2,390% to PLN 106.1 million, despite a 10.0% decline in net profit to PLN 7.8 million.
• Adjusted EBITDA grew 6.6% year-on-year to reach PLN 10.4 million for the first quarter.

Half-year Directors' Report on the Operations: PCF Group S.A. 2021

PCF Group S.A. pursued an aggressive strategy of global expansion and structural transformation during the first half of 2021.