Legal11 bit studios
Current Report No. 3/2025: Impairments on Assets and Reduction of the Incentive Program Reserve
2 Apr 20251 pages~2 min full read
11 bit studios recorded a PLN 49,057,019 impairment loss following the formal cancellation of the development project codenamed Project 8.
The company recognized additional impairment losses of PLN 10,902,836 for 'The Thaumaturge' and PLN 7,439,040 for 'Creatures of Ava' due to revised revenue expectations.
The total non-cash asset impairments for the 2024 fiscal year reflect a strategic reassessment of the company's development pipeline and market performance of its titles.
11 bit studios reversed PLN 6,929,999 in previously recognized costs related to its 2021–2025 Incentive Scheme after determining performance targets were unlikely to be met.
The provision for the 2021–2025 Incentive Scheme was reduced from PLN 4,485,160 at the end of 2023 to PLN 439,511 by the end of 2024.
These financial adjustments indicate a period of rigorous consolidation and a recalibration of growth expectations for the Warsaw-based developer.
The Management Board of 11 bit studios has disclosed significant non-cash asset impairments and adjustments to its incentive program reserves as part of its financial closing for the 2024 fiscal year. These adjustments reflect a strategic reassessment of the company’s development pipeline and the commercial performance of specific titles within its portfolio. The most substantial impact stems from the formal discontinuation of the video game development codenamed Project 8, which resulted in a final impairment loss of PLN 49,057,019. This figure is categorized under costs of discontinued projects within the 2024 Statement of Comprehensive Income.
In addition to the project cancellation, the company conducted impairment tests on its intangible assets as of December 31, 2024, leading to further write-downs for two released titles. The Thaumaturge incurred an impairment loss of PLN 10,902,836, while Creatures of Ava saw a reduction of PLN 7,439,040. These figures suggest that the projected future cash flows or carrying values of these specific games were adjusted downward to reflect their actual market performance or revised revenue expectations.
The financial statements also include a significant reversal of provisions related to the 2021–2025 Incentive Scheme. Following a reassessment of the likelihood of meeting specific performance targets, the company reversed PLN 6,929,999 of previously recognized costs. This adjustment reduced the total provision for the incentive scheme from PLN 4,485,160 at the end of 2023 to just PLN 439,511 by the end of 2024. Collectively, these actions indicate a period of rigorous financial consolidation and a recalibration of growth expectations for the Warsaw-based developer and publisher.
