Financial11 bit studios
Annual Report of 11 bit studios S.A. for 2021
1 Mar 2022140 pages~271 min full read
11 bit studios is executing a strategic transition from indie developer to large-scale publisher, targeting 656 million PLN in consolidated revenue through 2025 via a new multi-team production structure.
Financial performance in 2021 saw revenue of 70.12 million PLN and a net profit of 28.69 million PLN, with stability maintained by the back catalogue of 'Frostpunk' and 'This War of Mine' despite the lack of new releases.
The company significantly increased R&D investment, with 52.93 million PLN in capitalized development costs for upcoming titles 'Frostpunk 2', 'Dolly', and 'Project 8', all of which have migrated to Unreal Engine.
Balance sheet strength remains high with total assets of 219.5 million PLN and record financial assets of 107.41 million PLN, bolstered by 'IP Box' tax relief and high liquidity.
The United States is the primary market, accounting for 76% of total revenue, creating a high sensitivity to currency volatility due to the mismatch between USD-denominated income and PLN-denominated costs.
Expansion efforts include a 40% stake acquisition in Fool’s Theory and a commitment of 50 million PLN to the external publishing pipeline through 2023.
The workforce has grown to over 200 employees to support the company's shift toward a model capable of delivering annual product releases.
11 bit studios S.A. maintained a robust financial and strategic position in 2021, despite a year-over-year decline in earnings driven by a lack of new product premieres. The company reported annual revenue of 70.12 million PLN and a net profit of 28.69 million PLN, down from 37.36 million PLN in 2020. Notwithstanding lower sales, the balance sheet strengthened significantly, with total assets rising to 219.5 million PLN and record financial assets reaching 107.41 million PLN. This stability was fueled by the sustained performance of the "back catalogue," including *Frostpunk* and *This War of Mine*, alongside effective utilization of the "IP Box" tax relief.
The company is currently undergoing a major strategic transition from "Indie" developer to a larger-scale producer and publisher. To support this, 11 bit studios expanded its workforce to over 200 employees and increased R&D investment, with capitalized development costs for unfinished projects—specifically *Frostpunk 2*, *Dolly*, and *Project 8*—rising to 52.93 million PLN. All internal projects have migrated to Unreal Engine under a new licensing deal with Epic Games. Additionally, the company expanded its external footprint by acquiring a 40% stake in Fool’s Theory and committing 50 million PLN to its publishing pipeline through 2023.
Geographically, the United States remains the dominant market, accounting for 76% of total revenue, with Steam serving as the primary distribution channel. Because 78% of revenue is denominated in USD while costs are largely in PLN, the company remains highly sensitive to currency volatility. Looking ahead, management has established an ambitious 2021–2025 incentive program targeting 656 million PLN in consolidated revenue, underpinned by a shift toward a multi-team structure capable of delivering annual releases. Operations remain centered in Poland, with the company maintaining high liquidity and self-financing capabilities to fund its upcoming production cycles.
