Quarterly Report of 11 Bit Studios S.A.: Q1 2018

The first quarter of 2018 represented a transitional period for 11 bit studios S.A., characterized by a strategic pivot from the lifecycle of previous titles toward the highly anticipated launch of Frostpunk. Financial results for the period ending March 31, 2018, showed a net loss of PLN 0.98 million on revenues of PLN 2.24 million. This decline in year-on-year performance was primarily due to the natural aging of This War of Mine and a deliberate reduction in promotional activities to avoid market saturation ahead of new releases. Despite the quarterly deficit, the company maintained a robust liquidity position with cash and equivalents exceeding PLN 26 million and total assets of PLN 46.85 million.

The company’s mid-term strategy focuses on achieving greater financial stability by expanding its publishing division, with a target of launching one third-party game per quarter alongside one in-house title per year. This approach is supported by significant investments in development, with ongoing work assets rising to PLN 13.01 million. Key upcoming projects include Moonlighter, Children of Morta, and the internal development of Project 8. Furthermore, the company continues to benefit from government grants for technology and game development, which comprise a significant portion of its PLN 1.2 million in deferred income.

Management expects 2018 to be a record-breaking year following the exceptional commercial performance of Frostpunk in April. The title sold over 250,000 copies within 66 hours of its release, recouping its PLN 12 million development and marketing budget in less than three days. This success, combined with a disciplined publishing pipeline and a strong balance sheet, positions the company for significant growth. Operational stability remains high, with major distribution partnerships through Apple Inc. and Valve Corporation continuing to drive the majority of trade receivables.