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. The company’s primary objective is to evolve into a leading independent developer, supported by a target of releasing one major AAA title annually starting in 2024. To facilitate this growth, the Group expanded its international footprint by establishing People Can Fly Chicago and acquiring Game On Creative Inc. in Canada. These initiatives were bolstered by a successful capital increase that raised over PLN 100 million, significantly strengthening the company’s asset base and liquidity to fund ongoing development projects, including the titles currently known as Project Gemini and Project Dagger.

Financially, the Group demonstrated robust growth, reporting PLN 77.3 million in revenue—a 47% year-on-year increase—and a net profit of PLN 21.7 million. This performance was largely driven by contract development work and the launch of the AAA title Outriders. However, the company faces notable operational and commercial challenges. The failure of Outriders to generate sufficient net proceeds for royalty payments during this period highlighted the risks associated with revenue concentration and dependence on publisher-controlled milestones. Furthermore, while the company maintains a strong cash position and low debt, it remains exposed to currency fluctuations, talent churn, and the inherent uncertainties of the global video game market.

Governance remains centralized, with a core group of shareholders holding over 70% of voting rights and maintaining specific personal rights to influence the composition of the Management and Supervisory Boards. Despite the complexities of rapid corporate expansion and the administrative costs associated with share offerings, the company reports sufficient resources to sustain its operations. Management confirms that the Group remains a stable going concern, effectively navigating the economic impacts of the COVID-19 pandemic while preparing for its long-term strategic transition toward a self-publishing model.