Library | Game Industry Library

Poland

Independent Auditor's Report on the Annual Consolidated Financial Statements 2021

The independent auditor’s report prepared by Grant Thornton Frackowiak provides an unqualified opinion on the 2021 annual consolidated financial statements of PCF Group S.A. and its capital group. The audit confirms that the financial documentation presents a fair and clear view of the group’s financial position as of December 31, 2021, in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union. The scope of the audit covers the consolidated statement of financial position, the statement of profit or loss, and the statement of cash flows for the fiscal year. Two key audit matters were identified as particularly significant due to the complexity of professional judgment required. First, the valuation of assets from contracts with customers and sales revenue, totaling 35.3 million PLN and 180.3 million PLN respectively, required careful scrutiny of variable compensation elements, bonuses, and warrants. Second, the accounting for the 2021 acquisitions of Game On Creative Inc., Incuvo S.A., and the Phosphor Games development team was highlighted. These transactions resulted in a recognized goodwill value of 54.6 million PLN, necessitating complex assessments of fair value and control acquisition timing. The audit was conducted in accordance with the Polish Act on Statutory Auditors and International Standards on Auditing. The methodology involved analyzing internal control environments, verifying management estimates against source documentation, and confirming the accuracy of budget assumptions. The report also confirms compliance with the European Single Electronic Format (ESEF) requirements and maintains that the auditors remained independent of the group throughout the three-year engagement period starting in 2019.

investment funding quality-assurance+1

Grant ThorntonApr 2022

Legal

Polityka Wynagrodzeń Członków Zarządu i Rady Nadzorczej

The Remuneration Policy for PCF Group S.A., a Warsaw-based public company in the gaming industry, establishes a formal framework for compensating members of the Management Board and Supervisory Board. Adopted by the Extraordinary General Meeting, the policy aligns executive incentives with the company’s updated business strategy, long-term stability, and shareholder interests while mitigating conflicts of interest. It covers the parent company and its subsidiaries, ensuring that pay structures reflect market standards within the gaming sector and the specific responsibilities of each role. Management Board compensation consists of fixed monthly pay, variable performance-based bonuses, and additional benefits. Variable remuneration is tied to specific financial and non-financial targets, such as net profit, stock price performance, strategic milestones, and game quality metrics. To ensure fiscal prudence, variable components are capped at five times the annual fixed salary. While the company does not currently issue stock-based incentives, the policy allows for the future implementation of share-based motivational programs subject to shareholder approval. Management contracts may include non-compete clauses with compensation for up to 12 months and notice periods generally ranging from three to 12 months. Supervisory Board members receive fixed monthly fees determined by the General Meeting, regardless of the number of meetings held. The policy introduces the possibility of additional compensation for participation in specific board or committee meetings, such as the Audit Committee. Unlike the Management Board, Supervisory Board members do not receive variable performance-based pay or severance benefits upon dismissal. The Supervisory Board is responsible for the annual preparation of a remuneration report, which must be audited by an external entity. The policy requires a formal review by the General Meeting at least every four years. Provisions are included for temporary derogation from these rules if necessary to protect the company's long-term financial viability or profitability, requiring a formal resolution by the Supervisory Board detailing the justification and duration of the exception.

salary employment europe+1

PCF GroupApr 2022

Legal

Raport Bieżący Nr 5/2022

The Management Board of PCF Group S.A., a prominent Polish game development studio known for titles like Outriders, formally initiated the process for an Extraordinary General Meeting scheduled for April 13, 2022. This regulatory announcement, issued in mid-March 2022, serves as the official notification to shareholders and the public regarding the governance and strategic oversight of the company. The meeting was convened at a physical location in Warsaw to address specific corporate resolutions and legislative requirements governing publicly traded entities on the Warsaw Stock Exchange. The primary objective of this assembly involves the consideration and potential adoption of resolutions previously reviewed by the Supervisory Board. While the specific financial figures or project milestones are not detailed in this procedural filing, the scope of the meeting covers the internal legal and structural framework of the group. The governance process adheres strictly to the Polish Commercial Companies Code and the Regulation of the Minister of Finance regarding periodic information provided by issuers of securities. By providing the full text of the announcement and the draft resolutions, the leadership ensures transparency for investors and stakeholders during a period of corporate deliberation. This administrative action reflects the standard operational cycle of a listed gaming company, focusing on the formal approval of board-led initiatives and the maintenance of regulatory compliance within the Polish capital market. The documentation confirms that all necessary preparatory steps, including Supervisory Board opinions on the agenda items, were completed prior to the public summons.

mergers-acquisitions investment game-publishing+2

PCF GroupMar 2022

Legal

Raport bieżący nr 4/2022

The management board of PCF Group S.A., the Warsaw-based parent company of the People Can Fly game development studio, announced a formal change to its supervisory structure effective March 7, 2022. Under the provisions of the company’s articles of association, the Supervisory Board appointed Dagmara Zawadzka as a new member through co-optation. This appointment is set to last until the conclusion of the current three-year joint term, pending final approval by the General Meeting of Shareholders. In addition to her role on the Supervisory Board, Zawadzka was appointed to the Audit Committee. Her selection was based on her meeting the independence criteria established by Polish law regarding statutory auditors and audit firms, as well as her documented expertise in accounting and financial statement auditing. Formal declarations confirm that she does not engage in activities competitive to PCF Group S.A. and is not listed in the Register of Insolvent Debtors. Zawadzka brings extensive financial and strategic experience to the role, holding a Chartered Financial Analyst (CFA) designation and an educational background from the Warsaw School of Economics and Aarhus School of Business. Her professional history includes senior leadership positions at Centralny Port Komunikacyjny, Bank Gospodarstwa Krajowego, and PKP Intercity S.A. Furthermore, her experience in corporate finance advisory at PricewaterhouseCoopers and BRE Corporate Finance involved significant involvement in mergers, acquisitions, and initial public offerings, providing the board with high-level expertise in capital structures and strategic project implementation.

mergers-acquisitions europe investment+2

PCF GroupMar 2022

Legal

Raport Bieżący Nr 3/2022

PCF Group S.A., the Warsaw-based parent company of the game development studio People Can Fly, announced a formal change to its corporate governance structure effective March 3, 2022. Dr. Aleksander Marcin Ferenc submitted his resignation from the company’s Supervisory Board, concluding his tenure in that specific oversight role on the same day the notice was issued. This regulatory disclosure was made in accordance with Polish financial regulations regarding current and periodic information provided by securities issuers. While Dr. Ferenc stepped down from his position on the Supervisory Board, his professional relationship with the group transitioned into a strategic operational capacity rather than a complete departure. Following his resignation, he began supporting the People Can Fly Group specifically within the areas of mergers, acquisitions, and integration. This shift suggests a refocusing of his expertise toward the company's inorganic growth strategies and the organizational consolidation of acquired entities. The management and the remaining members of the Supervisory Board formally acknowledged his contributions to the company’s governance during his term. This transition occurred during a period where the studio, known for titles such as Outriders and Gears of War: Judgment, maintained a public listing on the Warsaw Stock Exchange, necessitating transparent reporting of all leadership changes. The announcement serves as a standard legal notification to investors regarding shifts in the composition of the company’s high-level oversight bodies.

mergers-acquisitions employment europe+1

PCF GroupMar 2022

Legal

Resolutions of the Supervisory Board on EGM Agenda: April 2022

The Supervisory Board of PCF Group S.A., the Warsaw-based parent company of game development studio People Can Fly, issued a series of formal resolutions on March 16, 2022, regarding matters to be addressed at the upcoming Extraordinary General Meeting scheduled for April 13, 2022. These resolutions serve as official endorsements of proposed corporate actions, ensuring compliance with the Polish Commercial Companies Code, the company’s internal statutes, and the Best Practice for GPW Listed Companies 2021. The primary focus of these resolutions is the formal approval of the meeting's agenda and the ratification of specific governance changes. Resolution No. 4/2022 confirms the board's positive opinion on the proposed agenda for the Extraordinary General Meeting. Resolution No. 5/2022 addresses personnel changes within the company’s oversight body, specifically endorsing the draft resolution to approve the selection of a co-opted member of the Supervisory Board. This indicates a move to solidify the board's composition following an interim appointment. Furthermore, Resolution No. 6/2022 supports proposed amendments to the Regulations of the Supervisory Board. This includes the adoption of a consolidated text of the regulations to reflect these updates. These actions demonstrate a commitment to maintaining rigorous corporate governance standards and administrative transparency as the company manages its internal leadership structure and regulatory obligations. All resolutions took effect immediately upon their adoption in March 2022, setting the stage for shareholder voting during the April assembly.

mergers-acquisitions investment europe+1

PCF GroupMar 2022

Financial

Annual Report of 11 bit studios S.A. for 2021

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.

investment mergers-acquisitions europe+2

11 bit studiosMar 2022

Legal

Detailed List of Changes Made in the Periodic Report of the PlayWay S.A. Capital Group for Q1 2022

The primary purpose of this document is to provide a detailed list of corrections made to the Q1 2022 periodic report for the PlayWay S.A. Capital Group. The revisions specifically address Note 2 regarding investments in associated entities. The thesis of the update is to ensure accurate reporting of shareholding percentages and to eliminate clerical errors, such as duplicate entries, that were present in the original filing. The scope of the data covers the financial standing and ownership structure of PlayWay S.A.’s extensive portfolio of game development studios as of January 1, 2022, through the first quarter of the year. The industry segments involved include various specialized game development and publishing houses under the PlayWay umbrella, such as Moonlit S.A., Movie Games S.A., and SimFabric S.A. The methodology involves a comparative presentation of "before" and "after" states for the investment table, highlighting specific adjustments to the "Share in Capital" column. Key findings from the corrections reveal significant adjustments to ownership data. For instance, the shareholding in Moonlit S.A. was corrected to 21.81%, while Movie Games S.A. and CreativeForge Games S.A. were updated to 33.43% and 47.81%, respectively. Other notable corrections include Sonka S.A. at 39.35% and SimFabric S.A. at 44.96%. Additionally, the document notes the removal of a duplicate row for MeanAstronauts S.A. Despite these percentage adjustments, the total value of investments for the period remained consistent at 183,972 PLN, with a total financial result for the group from these entities reported at 5,272 PLN for the quarter.

investment market-analysis poland

PlayWayMar 2022

Legal

Current Report No. 2/2022

PlayWay S.A., a prominent Polish video game developer and publisher, announced the appointment of Ludwik Sobolewski to its Supervisory Board on January 12, 2022. This appointment was conducted via co-option by the existing board members in accordance with the company’s statutes, following the resignation of Michał Kojecki in late 2021. The decision is subject to final approval at the next General Meeting of Shareholders. Ludwik Sobolewski brings extensive legal and financial expertise to the role, holding a doctorate in law and having served as a legal advisor and advocate. His professional background is characterized by significant leadership roles within European capital markets, most notably serving as the President of the Management Board of the Warsaw Stock Exchange from 2006 to 2013 and as the CEO of the Bucharest Stock Exchange from 2013 to 2017. His experience extends to the public sector and various financial institutions, including a tenure as Vice President of the National Depository for Securities. The appointment strengthens the board’s oversight capabilities through Sobolewski’s involvement in numerous commercial entities across the gaming, media, and financial sectors. He currently holds positions on the boards of several companies, including Games Box S.A. and EduGames S.A. Formal declarations confirm that he meets the independence criteria established by the Best Practice for GPW Listed Companies 2021. Furthermore, he does not engage in activities competitive with PlayWay S.A. and is not listed in the Register of Insolvent Debtors, ensuring compliance with Polish regulatory requirements for listed issuers.

mergers-acquisitions game-publishing investment+1

PlayWayJan 2022

Legal

Raport Bieżący Nr 1/2022

PCF Group S.A. disclosed a specific management transaction involving the acquisition of company shares by a high-ranking executive. The primary purpose of this notification is to fulfill regulatory transparency requirements under Article 19, Paragraph 3 of the Market Abuse Regulation (MAR). The disclosure confirms that the President of the Management Board purchased shares of the company, signaling direct insider investment and alignment with shareholder interests. The transaction occurred on December 29, 2021, and was officially reported to the company on January 3, 2022. This specific event falls within the scope of Polish capital market regulations and pertains to the executive management segment of the gaming industry. While the summary document serves as a formal announcement of the notification's receipt, it emphasizes the legal obligation of public companies to report dealings by persons discharging managerial responsibilities. The scope of this information is limited to a single transaction within the Polish domestic market involving PCF Group S.A., known globally as People Can Fly. The methodology for this disclosure follows standard European Union financial reporting protocols, ensuring that market participants are informed of significant changes in the shareholding structure held by internal leadership. This transparency is intended to maintain market integrity and provide investors with data regarding the financial commitments of the company's top executive.

mergers-acquisitions investment game-publishing+1

PCF GroupJan 2022

Legal

Raport bieżący ESPI nr 1/2022: Terminy przekazywania raportów okresowych w 2022 roku

The Management Board of PlayWay S.A., a prominent Polish game developer and publisher, established the official schedule for the publication of its periodic financial results throughout the 2022 calendar year. This regulatory disclosure serves to inform investors and the public market of the specific dates when the company will release its audited annual figures for the previous fiscal year as well as its interim performance metrics for the current periods. The scope of this schedule covers both individual and consolidated financial statements, ensuring transparency regarding the company’s fiscal health and operational progress within the Warsaw Stock Exchange framework. The reporting cycle begins with the release of the standalone and consolidated annual reports for 2021 on April 29, 2022. Subsequent interim reporting for the 2022 fiscal year includes the first-quarter consolidated report on May 30 and the third-quarter consolidated report on November 29. The consolidated semi-annual report, covering the first half of 2022, is scheduled for publication on September 30. These dates represent the final deadlines by which the company must disclose its financial data to maintain compliance with Polish capital market regulations. In accordance with specific ministerial ordinances regarding periodic information for security issuers, the company opted to streamline its reporting obligations. PlayWay S.A. exercised its right to omit the publication of quarterly reports for the fourth quarter of 2021 and the second quarter of 2022. Furthermore, the company integrated its individual financial data directly into its consolidated quarterly and semi-annual reports, thereby eliminating the need for separate standalone interim filings. This approach centralizes financial disclosures, providing a comprehensive view of the group’s performance while adhering to the legal requirements of the Act on Public Offering.

market-analysis investment poland

PlayWayJan 2022

Legal

Independent Auditor Report on Remuneration Statement 2022 — 11 bit studios S.A.

PricewaterhouseCoopers (PwC) conducted an independent assurance engagement to evaluate the 2022 Remuneration Report of 11 bit studios S.A., a prominent Polish game development company. The primary objective of the audit was to provide reasonable assurance regarding the report's completeness and compliance with Article 90g of the Act on Public Offering. The scope of the assessment focused on the compensation details for members of the Management Board and Supervisory Board for the fiscal year ending December 31, 2022. The methodology employed by the auditors followed the National Standard on Assurance Engagements 3000 (Z), which aligns with International Standard on Assurance Engagements 3000. Procedures included comparing the report’s content against legal requirements, reviewing corporate resolutions regarding remuneration policies, and reconciling financial data with the company’s accounting records and source documents. The auditors also conducted inquiries with personnel responsible for preparing the report to ensure no significant facts were omitted or distorted. The audit concluded that the Remuneration Report is complete and compliant in all material respects with the applicable regulatory framework. While the auditors provided a high level of assurance, they noted that the engagement did not constitute a full audit of historical financial information under National Auditing Standards. Responsibility for the accuracy of the data and its subsequent publication on the company's website remains with the Supervisory Board and Management Board. The findings were finalized in Warsaw on May 19, 2023, confirming that 11 bit studios met its statutory transparency obligations regarding executive compensation for the 2022 period.

salary employment europe+2

11 bit studiosJan 2022

Legal

Audit Committee Report on Activities and Assessment for 2022 — 11 bit studios S.A.

The Audit Committee of 11 bit studios S.A. issued this report to detail its activities, composition, and regulatory compliance throughout the 2022 fiscal year. Operating under the Polish Act on Statutory Auditors and the Best Practice for GPW Listed Companies 2021, the committee’s primary thesis is that it effectively fulfilled its advisory and supervisory roles regarding financial reporting, internal controls, and risk management. The committee underwent a membership change in June 2022, maintaining a composition where the majority of members, including the Chairman, met statutory independence requirements. Key findings indicate that the committee held six meetings—four in-person and two remote—to address critical financial oversight tasks. Significant activities included summarizing the 2021 financial audit, reviewing the 2022 semi-annual reports, and conducting a detailed evaluation of "Project 8" in consultation with the company's management and auditors. A major focus of the 2022 period was the selection of a statutory auditor for the 2022–2023 term. After evaluating proposals from KPMG, EY, and PwC, the committee recommended PwC to the Supervisory Board. Furthermore, the committee performed a comprehensive update of its internal policies regarding auditor selection and the provision of non-audit services, utilizing external legal counsel to ensure alignment with current standards. The report concludes that the committee successfully monitored the independence of the auditing firm and provided the necessary assurance to the Supervisory Board regarding the integrity of the company's financial reporting processes.

investment employment europe+1

11 bit studiosJan 2022

Legal

Raport Bieżący ESPI nr 23/2021

The management board of PlayWay S.A., a prominent Polish game developer and publisher headquartered in Warsaw, announced a formal change in its corporate governance structure effective December 31, 2021. This notification confirms the resignation of Michał Marcin Kojecki from his position as a member of the Supervisory Board. The departure was finalized on the final day of the 2021 calendar year, marking a specific transition point for the company’s oversight body. The primary justification provided for this resignation is a change in the board member's place of residence, which necessitated his departure from the role. This administrative update was issued in compliance with Polish capital market regulations, specifically citing the Act on Public Offering and the conditions for governing the current and periodic information provided by securities issuers. The disclosure ensures transparency for shareholders and regulatory bodies regarding the composition of the company's leadership. This governance update focuses exclusively on the internal leadership of PlayWay S.A. within the Polish market. The announcement was officially signed by Krzysztof Kostowski, the President of the Management Board, following the standard legal protocols for listed companies on the Warsaw Stock Exchange. While the notification details the vacancy created by the resignation, it does not outline immediate plans for a successor or additional changes to the board’s composition at the time of the announcement.

investment mergers-acquisitions poland

PlayWayDec 2021

Legal

Regulamin Zarządu

This document establishes the formal organizational framework and operational procedures for the Management Board of PCF Group S.A., a Warsaw-based joint-stock company. Acting as the executive body of the firm, the Board is tasked with managing all corporate affairs not explicitly reserved for the General Meeting or the Supervisory Board. The regulations define the legal basis for the Board’s activities, primarily grounded in the Polish Commercial Companies Code and the Company’s Statutes. The scope of the regulations covers internal governance, including the appointment process, representation of the company in legal matters, and the specific duties of Board members. Key mandates include the implementation of corporate strategy, maintaining professional diligence, and managing conflicts of interest. Members are explicitly required to prioritize the company’s interests and image, refraining from professional activities that could create competitive conflicts. The document also outlines the transition of responsibilities and documentation upon the expiration of a member's mandate. Operational procedures detailed in the text apply specifically to multi-person boards. The President of the Management Board holds significant authority, including organizing work, convening meetings, and casting the deciding vote in the event of a tie. Meetings can be conducted in person or via remote communication tools, provided they allow for real-time identification and participation. Resolutions are generally passed by a simple majority, and the regulations allow for various voting methods, including written ballots and mixed-mode participation. Formal documentation requirements are also specified, mandating that all meetings and resolutions be recorded in protocols signed by the attending members and the President. These regulations are public and can only be amended through a resolution by the Supervisory Board.

mergers-acquisitions investment europe+1

PCF GroupDec 2021

Legal

Raport Bieżący Nr 48/2021

PCF Group S.A. has officially expanded its development capabilities through the acquisition of a controlling interest in Incuvo S.A., a Katowice-based studio specializing in virtual reality (VR) game production and porting. On December 13, 2021, PCF Group purchased 7,143,900 shares from the Estonian entity OÜ Blite Fund, representing 50.01% of Incuvo’s share capital and total voting rights. This transaction, executed on the NewConnect market, marks a strategic move to integrate VR expertise into the broader PCF Group portfolio. The financial terms of the agreement include an initial purchase price of 19,995,776 PLN. Additionally, the seller is eligible for a performance-based earn-out payment capped at 11,595,725 PLN. This supplemental payment is contingent upon the commercial success of the title Green Hell VR, specifically measured by net profits during a defined reference period and the game’s critical reception as reflected by its Metacritic score. Beyond the share transfer, the agreement establishes long-term operational stability through non-compete clauses and management commitments. PCF Group has assumed rights and obligations from previous agreements with key Incuvo executives, ensuring that the current leadership remains in place and adheres to non-compete restrictions until at least December 31, 2024. This acquisition serves as a primary component of PCF Group’s growth strategy, aimed at diversifying its technical competencies and establishing a foothold in the emerging VR industry segment.

mergers-acquisitions investment europe+2

PCF GroupDec 2021

Legal

Current Report No. 47/2021

This regulatory report, issued on December 13, 2021, by PCF Group S.A., discloses previously delayed inside information regarding the acquisition of a controlling stake in Incuvo S.A. The primary purpose of the announcement is to fulfill European Union Market Abuse Regulation (MAR) requirements following the formal execution of an investment agreement. The transaction involves PCF Group S.A. acquiring between 50% plus one share and 53% of the shares in Incuvo S.A., a Katowice-based developer specializing in virtual reality (VR) gaming and VR porting. A significant portion of this acquisition, at least 49.01%, was negotiated with the Estonian-based shareholder OÜ Blite Fund. The initial non-binding term sheet was signed on October 28, 2021, which established an exclusivity period for negotiations that lasted until December 8, 2021. The disclosure explains that the public announcement was delayed from its original October date to protect the company’s interests and ensure the integrity of the negotiation process. Management determined that immediate disclosure could have invited third-party interference, potentially worsening the transaction terms or leading to public misinterpretation of the company's value while the deal's outcome remained uncertain. The scope of the report is focused on the Polish and Estonian corporate entities involved, marking a strategic expansion for PCF Group into the VR industry segment. The document confirms that all legal criteria for delaying inside information were met and that the Polish Financial Supervision Authority would be notified of the delay accordingly.

mergers-acquisitions investment market-analysis+1

PCF GroupDec 2021

Legal

Raport bieżący nr 46/2021

PCF Group S.A. has entered into a production and publishing agreement with Incuvo S.A. to adapt an existing title from the People Can Fly portfolio for virtual reality platforms. This strategic partnership focuses on implementing necessary technical changes and code adjustments to ensure compatibility with all major VR hardware and software ecosystems. The agreement marks a significant expansion of the company’s intellectual property into the immersive technology segment, with a scheduled release window targeting the end of 2023. Under the financial terms of the contract, PCF Group S.A. serves as the publisher and assumes full responsibility for financing the production. Payments to Incuvo S.A. are structured around the successful completion of specific development milestones. The commercial arrangement follows a standard industry model where Incuvo S.A. becomes eligible for royalty payments only after the publisher has fully recouped its investments in production, promotion, and distribution. The specific royalty rates are tiered based on the total sales revenue generated by the VR title. The scope of this agreement is global, covering all significant virtual reality platforms available in the market. The contract does not contain unusual provisions or specific penalties that deviate from standard market practices for high-end software development and publishing. This collaboration leverages Incuvo’s technical expertise in VR porting and development to maximize the commercial reach of PCF Group’s established gaming assets within the rapidly evolving virtual reality industry.

game-publishing vr mergers-acquisitions+2

PCF GroupDec 2021

Financial

Mid-Year Consolidated Report for Period 3 and 9 Months Completed 30 September 2021

PCF Group demonstrated robust financial growth and strategic expansion during the first nine months of 2021, characterized by a significant increase in scale and a transition toward a more diversified business model. Consolidated sales revenues rose to 131.8 million PLN, up from 79.3 million PLN in the prior year, while net profit more than doubled to 46.4 million PLN. This performance was underpinned by a strong cash position of 149.8 million PLN, largely bolstered by 131.6 million PLN in net proceeds from Series B and D share issuances. These capital increases drove total equity to 241.6 million PLN, providing the necessary liquidity for international expansion and studio acquisitions. The Group’s revenue profile remained heavily reliant on the work-for-hire segment, which accounted for over 90% of total income through partnerships with major publishers like Square Enix and Take-Two Interactive. Despite the April 2021 launch of Outriders, the Group did not record royalty income through the third quarter, as sales had not yet recouped the publisher's development and promotion costs. Strategically, the Group is shifting toward a self-publishing model and expanding its development pipeline with projects such as Gemini and Dagger. This evolution is supported by the acquisition of Game On Creative in Canada and the establishment of People Can Fly Chicago, reflecting a growing global footprint across Poland, the United States, and Canada. Operational costs increased to 92.1 million PLN due to higher headcount and public offering expenses, yet the Group maintained a stable financial outlook. Key corporate developments included a dividend distribution of 5.6 million PLN and a strategic investment agreement with Square Enix involving subscription warrants. By the end of September 2021, the Group had successfully integrated new entities and secured its financial foundation through share capital increases, positioning itself to pursue a goal of annual game premieres starting in 2024.

investment mergers-acquisitions market-analysis+2

PCF GroupNov 2021

Financial

Quarterly Report of 11 Bit Studios S.A. for the Nine Months Ended September 30th 2021

During the first nine months of 2021, 11 bit studios S.A. focused on a strategic transition toward a multi-team production model and the expansion of its publishing pipeline. Financial performance for this period reflected a transitional phase, with revenue reaching PLN 49.2 million and net profit totaling PLN 17.4 million. These figures represent a year-over-year decline from 2020, driven by a high comparative base and the natural aging of the existing game portfolio, which includes established titles such as Frostpunk, Moonlighter, and Children of Morta. Despite lower current earnings, the company maintained a robust liquidity position, ending the period with PLN 121.5 million in financial assets and a significant increase in cash reserves to PLN 38.1 million. Operational efforts are heavily concentrated on future growth, with approximately PLN 110 million committed to the development of three major internal projects: Frostpunk 2, Project 8, and Dolly. To support these ambitions, the studio has migrated to Unreal Engine and expanded its workforce to 192 employees, contributing to a 74.6% increase in salary expenses. The company is also scaling its publishing division, earmarking PLN 80 million for third-party titles through 2023. This strategy aims to establish a consistent release cycle of one proprietary game and multiple third-party titles annually. The financial structure remains stable, characterized by a 9.8% increase in total assets to PLN 204.7 million and a reduction in total liabilities. While the abandonment of the internal Liquid Engine resulted in a minor impairment loss, the valuation of ongoing projects remains secure. Beyond core development, the studio is diversifying the Frostpunk intellectual property into mobile, board game, and literary markets while actively seeking minority acquisitions to bolster its long-term development and publishing capabilities.

investment market-analysis europe+1

11 bit studiosNov 2021