Financial11 bit studios
Half-Year Report of 11 Bit Studios S.A. for the Six Months Ended June 30th 2023
1 Aug 202377 pages~170 min full read
11 bit studios experienced a significant H1 2023 downturn, with revenue falling 45.87% to PLN 24.78 million and net profit dropping 73.4% to PLN 4.01 million due to a lack of major releases since 2018.
See it on page 61The company is currently in a heavy investment cycle, with intangible assets related to game development rising to PLN 124.7 million to fund a pipeline that includes Frostpunk 2, The Alters, Project 8, The Invincible, and The Thaumaturge.
See it on page 75Despite lower earnings, the firm maintains a strong financial position with total assets of PLN 266.04 million and cash reserves of PLN 38.95 million, supported by strategic partner advances from Microsoft and a new PLN 20 million credit facility.
See it on page 75Management anticipates a financial recovery beginning in late 2023 and accelerating through 2024 as the new development and publishing titles reach the market.
See it on page 57The company’s operations are heavily export-dependent, with 92% of revenue generated internationally and 73% of the total market concentrated in the United States.
See it on page 56The firm utilizes Poland’s IP Box tax relief to maintain an effective tax rate of 15.03% while pursuing a long-term goal of PLN 328 million in profit before tax over the next five years.
See it on page 23During the first half of 2023, 11 bit studios S.A. entered a transitional phase characterized by heavy capital investment and a temporary decline in financial performance. Revenue fell 45.87% year-over-year to PLN 24.78 million, while net profit dropped 73.4% to PLN 4.01 million. These results reflect the natural aging of the existing product portfolio and a lack of major new releases since 2018. Despite lower earnings, the company maintains a robust financial position with total assets growing to PLN 266.04 million and cash reserves increasing to PLN 38.95 million, bolstered by advance payments from strategic partners like Microsoft.
The company is currently executing a massive investment cycle, with intangible assets related to game development rising to PLN 124.7 million. This spending supports a concentrated pipeline of proprietary titles, including Frostpunk 2, The Alters, and Project 8, alongside third-party publishing projects such as The Invincible and The Thaumaturge. Management expects a significant financial recovery beginning in late 2023 and accelerating through 2024 as these titles reach the market. To support this growth, the firm secured a new PLN 20 million credit facility and continues to utilize Poland’s IP Box tax relief, which reduced its effective tax rate to 15.03%.
Operations remain highly globalized, with export sales accounting for nearly 92% of revenue and the United States representing 73% of the total market. This international exposure introduces risks related to USD/PLN exchange rate fluctuations and complex cross-border licensing. While the company faces challenges such as intense competition for talent and long production cycles, its strategic focus on a three-team in-house structure and an expanded publishing division is designed to outpace global market growth. The company remains committed to ambitious long-term targets, including a five-year goal of PLN 328 million in profit before tax.
