LegalPCF Group
Current Report No. 19/2022: Information on the Proposed Termination of Cooperation with Publisher Take‑Two
23 Sept 20222 pages~3 min full read
PCF Group S.A. and Take-Two Interactive have terminated their July 2020 agreement for the development of Project Dagger following a disagreement over the project's future work schedule.
See it on page 1PCF Group retains full ownership of the Project Dagger intellectual property after Take-Two declined to exercise its buyout option.
See it on page 2The termination agreement includes favorable settlement terms for PCF Group regarding the repayment of development advances, which will scale based on whether the game is self-published or released via a new partner.
See it on page 2PCF Group will transition Project Dagger expenditures to development costs under International Accounting Standard 38, a change expected to significantly impact financial results from the first half of 2022 onward.
See it on page 2PCF Group intends to continue developing Project Dagger using internal resources while remaining open to securing debt financing or a new publishing partner.
See it on page 2Despite the termination, PCF Group maintains its strategic objective to release at least one game annually beginning in 2024.
See it on page 2PCF Group S.A. announced the proposed termination of its production and publishing agreement with Take-Two Interactive Software regarding the development of Project Dagger. The termination, initiated by Take-Two in September 2022, marks the end of a partnership established in July 2020. While the parties had completed all milestones and payments for the first half of 2022, they failed to reach an agreement on a new work schedule for the next phase of development, leading to the decision to part ways.
The proposed termination agreement includes favorable settlement terms for PCF Group, specifically regarding the repayment of development advances. The repayment amounts are structured to vary depending on whether the title is eventually released through a self-publishing model or with a new third-party publisher. Notably, Take-Two has declined to exercise its option to buy out the intellectual property rights, leaving PCF Group as the sole owner of the Project Dagger IP.
This shift in the business relationship necessitates a change in accounting treatment. Expenditures on Project Dagger will now be recorded as development costs under International Accounting Standard 38, which is expected to significantly impact the Group’s financial results for the first half of 2022 and subsequent periods. PCF Group intends to continue development using its own resources, though it remains open to debt financing or securing a new publishing partner. Despite the termination, the company maintains its strategic goal of releasing at least one game annually starting in 2024, utilizing both self-publishing and traditional publisher-led models.
