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Gaming Industry Report: Q1 2023

The gaming industry experienced a resilient start to 2023, with a projected global market size of $201 billion, representing a 9% year-over-year increase. Public markets showed strength, with gaming-focused exchange-traded funds (ETFs) recording gains between 10% and 23% year-to-date. While private market venture funding saw a total of $761 million across 109 deals in the first quarter, activity remains concentrated in early-stage investments, as late-stage funding has slowed significantly compared to the peak levels of 2021. Geographically, Asia led global venture funding in the first quarter, followed by North America and Europe. Emerging markets such as Africa and South America saw sporadic but notable deal activity, highlighting a broader global interest in gaming infrastructure and content. Major industry players currently hold approximately $48 billion in cash and equivalents, suggesting a stable environment for potential future mergers and acquisitions despite ongoing regulatory scrutiny regarding large-scale consolidation. Key industry trends in early 2023 include the integration of artificial intelligence for asset generation and conversational tools, alongside a strategic shift by major tech firms toward cloud-based gaming infrastructure. Competitive dynamics are evolving as Epic Games introduces self-publishing tools to challenge Steam’s market dominance and integrates user-generated content into its Fortnite ecosystem. Furthermore, platforms like Roblox are successfully expanding their reach by aging up their user demographic. These developments, supported by a robust schedule of global industry conferences, indicate a focus on platform scalability, content diversification, and the optimization of developer tools to sustain long-term growth.

market-analysis investment funding+3

KonvoyApr 2023

Resolution No. 5/2023

PCF Group S.A., the parent company of the People Can Fly studio, has executed a strategic capital increase to consolidate its ownership of the virtual reality specialist Incuvo S.A. By issuing 136,104 Series E ordinary shares at a price of 46.13 PLN per share, the company raised its share capital to 601,726.60 PLN. This issuance was conducted via a private subscription targeting two specific investors, Andrzej Wychowaniec and Radomir Kucharski, in exchange for their combined 12.24% stake in Incuvo S.A. This non-cash contribution increases the Group’s total holding in the VR studio to approximately 62.25%, signaling a deeper commitment to the virtual reality segment of the gaming industry. The transaction, finalized in February 2023, utilized a share price based on a six-month volume-weighted average to ensure a fair valuation of the 6.28 million PLN total issuance. To facilitate this acquisition, the Board excluded pre-emptive rights for existing shareholders, arguing that the move was essential for aligning the economic interests of Incuvo’s leadership with the long-term development goals of the broader Group. This integration of key VR expertise is further secured by a lock-up period on the newly issued shares, which prevents the investors from selling their holdings until the end of 2024. Following the issuance, the new shares are slated for dematerialization and listing on the Warsaw Stock Exchange. This capital restructuring serves as a tactical maneuver to strengthen the Group’s internal capabilities and streamline its corporate structure. By bringing Incuvo’s executive leadership into the parent company’s shareholder base, the Group aims to foster a more unified approach to its expanding portfolio of high-end gaming projects across multiple platforms.

investment funding europe+1

PCF GroupFeb 2023

investment mergers-acquisitions funding+2

Raport Bieżący Nr 6/2023

PCF Group S.A. has formally initiated a capital increase through the issuance of Series E ordinary bearer shares, leveraging authorized capital provisions to expand its financial base. This strategic move, finalized on February 10, 2023, involves the complete exclusion of pre-emptive rights for existing shareholders to facilitate a more streamlined allocation of the new securities. The primary objective of this issuance is to fund an increased capital commitment to Incuvo S.A., a Katowice-based subsidiary specializing in virtual reality development. This decision follows prior corporate disclosures regarding the group's intent to deepen its investment in this specific segment of the gaming industry. The issuance process includes the dematerialization of the new shares and an application for their admission to trading on the regulated market of the Warsaw Stock Exchange. By utilizing authorized capital, the management board aims to execute the capital raise efficiently, ensuring that the necessary resources are available to support the growth and operational integration of Incuvo S.A. within the broader PCF Group portfolio. This action necessitates formal amendments to the company’s articles of association to reflect the updated share capital structure. This corporate action reflects a targeted expansion strategy within the Polish game development sector, specifically focusing on the transition of existing intellectual properties into the virtual reality space. The legal framework for this issuance is governed by Polish financial regulations concerning periodic and current reports for public issuers. By securing this additional capital, PCF Group strengthens its position as a diversified developer and publisher, aligning its financial structure with its long-term strategic goals for subsidiary development and technological diversification.

PCF GroupFeb 2023

investment funding mergers-acquisitions+1

Consolidated Financial Results for the Nine Months Ended December 31, 2022

This financial report details the consolidated results for MIXI, Inc. during the first nine months of the fiscal year ending March 31, 2023. The company reported net sales of ¥104,802 million, representing a 24.6% increase over the previous year, and a 67.7% rise in operating income to ¥19,073 million. Despite these gains, profit attributable to owners of the parent fell by 72.8% to ¥2,020 million. This decline was primarily driven by significant non-operating and extraordinary losses, including a ¥4,818 million impairment loss related to the equity-method associate bitbank, inc., and a ¥4,468 million loss stemming from the withdrawal from certain new product developments. The scope of the report covers the company’s four primary business segments: Digital Entertainment, Sports, Lifestyle, and the newly established Investment Business. Digital Entertainment remains the primary revenue driver, largely fueled by the performance of the mobile game Monster Strike, contributing ¥73,457 million in net sales and ¥31,806 million in segment profit. The Sports and Lifestyle segments also saw revenue growth, though the Sports segment continued to operate at a loss. The Investment Business was officially designated as a main line of business during this period, leading to a reclassification of investment-related income and assets. Methodologically, the results are prepared under Japanese GAAP and include consolidated balance sheets, statements of income, and cash flow analysis. The company revised its full-year forecast, projecting net sales of ¥142,000 million and a 51.3% decrease in annual profit attributable to owners of the parent compared to the prior year. MIXI maintains a strong equity ratio of 80.8% and continues to distribute an annual dividend of ¥110 per share.

investment funding market-analysis+2

MIXI, Inc.Feb 2023

Presentation

Aktualizacja Strategii Nowe Otwarcie: Polska

People Can Fly’s strategic update, issued on 31 January 2023, outlines a transformation from a single‑title studio into a multi‑project, globally distributed developer and emerging self‑publisher. The core thesis is that leveraging the group’s expertise in AAA shooters, Unreal Engine technology, and a newly expanded talent pool will enable simultaneous delivery of several high‑quality games while shifting revenue generation toward Game‑as‑a‑Service and diversified monetisation models. Over the past two years the group has completed the Outriders launch and its Worldslayer expansion, restructured its production pipeline from one‑game‑at‑a‑time to parallel development, and opened new studios in Kraków and Montréal. Acquisitions of Phosphor Games (Chicago), Game On Creative (motion‑capture and cinematics), and Incuvo S.A. (VR) have broadened capabilities into compact‑AAA, virtual‑reality and live‑service titles. The workforce now exceeds 600 “Aviators,” including roughly 400 developers, with two‑thirds based in Europe and one‑third in North America. Internal processes rely on agile, matrix‑based feature teams, a proprietary PCF Framework for Unreal Engine, and Centers of Excellence that foster cross‑project knowledge sharing. Future plans target six new releases by 2027, aiming for at least 3 billion PLN in combined revenue from 2023‑2027. The pipeline includes the AAA work‑for‑hire title Gemini (partnered with Square Enix, slated for 2026), the self‑funded AAA projects Dagger, Bifrost and Victoria (all projected for 2025‑26), the compact‑AAA concept Red, and the self‑published VR titles Thunder (2023) and Green Hell VR (202

PCF GroupJan 2023

Informacja na temat stanu stosowania przez spółkę zasad zawartych w Zbiorze Dobre Praktyki Spółek Notowanych na GPW 2021

PCF Group S.A., operating as People Can Fly, maintains a high level of transparency and shareholder engagement while navigating the transition toward full compliance with the Best Practice for GPW Listed Companies 2021. As of early 2023, the AAA game developer adheres to the majority of governance standards regarding board independence, internal systems, and shareholder relations. The company facilitates electronic participation in general meetings and provides bilingual broadcasts to ensure accessibility for its investor base. While it recently established an internal audit function and committed to a five-year external audit cycle, certain gaps remain in formalized risk and compliance departments, which the company intends to address in future reporting cycles. The primary areas of non-compliance center on formalized ESG strategies and diversity policies. The company currently excludes environmental and social issues from its formal business strategy, arguing that its operations as a software developer have a relatively low environmental impact. Furthermore, the company has opted not to implement a structured diversity policy for its Management or Supervisory Boards, preferring to maintain flexibility in recruitment by prioritizing specialized professional qualifications over specific gender or age metrics. Despite the absence of a formal policy, the company emphasizes a commitment to gender pay equality and merit-based advancement. Regarding executive compensation and related-party transactions, the company follows established standards for transparency and oversight. Remuneration for the Supervisory Board remains independent of short-term financial results, and procedures are in place for external valuations of significant transactions. Although the company’s statutes do not currently require General Meeting approval for all related-party transactions, it maintains rigorous internal oversight through the Supervisory Board. These governance practices reflect a balance between meeting the regulatory expectations of the Warsaw Stock Exchange and maintaining the operational agility required in the competitive global gaming industry.

investment market-analysis funding+2

PCF GroupJan 2023

funding game-development global

Ayudas AEVI Innovación: Edición 2023

The AEVI Innovation program for 2023 offers financial support of up to €10,000 to independent developers—both individuals and legal entities—who wish to create an innovative prototype in the video‑game sector. The aid is expressly targeted at non‑commercial projects, and any work that has already been published on any platform for commercial purposes is excluded from eligibility. Applicants may submit more than one prototype idea, provided each proposal meets the program’s criteria. Eligibility is open to any developer, regardless of prior experience, who can demonstrate a novel concept and a clear production plan for the prototype. The application process is streamlined: candidates register through the AEVI website, upload a concise product sheet describing the project, and provide contact details. The deadline for submissions is 31 October at 23:59, and the program emphasizes a proactive attitude, encouraging developers to act promptly. The initiative focuses exclusively on the Spanish independent game development ecosystem, with no geographic restrictions beyond the national context. No statistical data or survey methodology is presented, as the program functions as a grant call rather than a research study. The primary objective is to stimulate creativity and technical experimentation within the indie sector by reducing financial barriers to prototype development.

AEVIJan 2023

market-analysis mergers-acquisitions investment+3

Global Gaming Report H1 2022

The first half of 2022 marked the most active period in the history of the gaming industry, characterized by unprecedented consolidation and record-breaking investment levels. Total deal value exceeded $107 billion across 651 transactions, with mergers and acquisitions accounting for $95 billion of that total. This surge was primarily driven by massive strategic consolidations, most notably Microsoft’s acquisition of Activision Blizzard and Take-Two’s purchase of Zynga. While the public markets faced significant headwinds and valuation corrections, the private sector remained resilient, securing $7 billion in financing across nearly 500 deals. Blockchain gaming and metaverse infrastructure emerged as the dominant catalysts for growth, representing over half of all financing transactions in the second quarter. This sector attracted more than $2.2 billion in funding, supported by the launch of multi-billion dollar funds from major venture capital firms. Despite the robust private activity, public gaming stocks largely underperformed, leading to a shift in investor focus toward high-quality, profitable targets. The absence of activity in the IPO and SPAC markets further underscored a transition toward private equity and strategic M&A as the primary vehicles for industry movement. The industry landscape is currently defined by a divergence between aggressive private investment and cautious public market sentiment. As valuation multiples adjust to new economic realities, the sector is positioned for a second half of the year focused on opportunistic acquisitions and potential take-private transactions. The continued integration of Web3 technologies and the entry of massive capital reserves suggest that while the pace of "mega deals" may fluctuate, the fundamental restructuring of the gaming ecosystem toward a consolidated, blockchain-integrated future remains the central trajectory for the global market.

Drake Star PartnersJul 2022

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

Management Board Report on Activities of the PCF Group S.A. 2021

PCF Group S.A. (People Can Fly) experienced a transformative 2021 fiscal year, marked by its transition to a public issuer and a significant expansion of its global corporate structure. The Group achieved a 74% year-over-year increase in sales revenue, totaling 180.3 million PLN, with net profit rising 150% to 61.3 million PLN. This growth was primarily driven by the "work-for-hire" segment, which accounted for 99% of revenue through high-profile AAA development partnerships with Square Enix and Take-Two Interactive. Key operational milestones included the April 2021 launch of *Outriders* and the strategic acquisitions of Game On Creative and a majority stake in Incuvo S.A. The Group is currently executing a dual-track strategy, balancing major co-development projects like *Project Gemini* and *Project Dagger* with the long-term goal of building internal self-publishing capabilities for its own intellectual property. While financial liquidity remains strong—bolstered by 100.3 million PLN in net proceeds from share offerings and a low effective tax rate of 4.8% due to IP Box relief—the Group faces high revenue concentration risks. Over 80% of income is derived from two major publishers, and *Outriders* had not yet reached the profitability threshold required for royalty payments by year-end 2021. Geographically, the Group expanded its footprint into the United States and Canada, growing its workforce from 281 to 495 employees. Corporate governance remains centralized, with CEO Sebastian Wojciechowski and a core group of shareholders controlling 70.65% of voting rights. While the Group maintains robust financial oversight through its Audit Committee, it currently deviates from several GPW "Best Practice" standards, specifically regarding formalized ESG strategies and diversity policies, prioritizing industry-specific expertise and operational flexibility during its rapid scaling phase.

investment market-analysis funding+2

PCF GroupApr 2022

investment funding sweden

Invitation to Subscribe to Shares in Stillfront Group AB (publ)

Stillfront Group AB (publ) initiated a preferential rights issue in March 2022 to raise approximately 1,952 MSEK in net proceeds. The primary objective of this capital raise is to repay debt incurred from the $201 million acquisition of 6waves and to strengthen the balance sheet for future strategic initiatives. The offering allowed existing shareholders to subscribe to three new shares for every ten held at a price of 17 SEK per share, representing a potential 23.1% dilution for non-participating investors. The scope of the offering focused on Sweden, Denmark, and Finland, supported by subscription commitments from major shareholders such as Laureus Capital and Swedbank Robur. The group’s financial trajectory reflects an aggressive acquisition-led growth strategy, with net sales increasing from 1,967 MSEK in 2019 to 5,455 MSEK in 2021. Despite this rapid expansion across 22 global studios, organic growth turned negative (-8%) in 2021, and the company faces significant contingent consideration obligations (earn-outs) totaling 3,328 MSEK through 2027. Operationally, the business is highly concentrated, relying on a small number of "free-to-play" titles and "whale" users, with 77% of revenue generated through the Google Play and Apple App stores. Significant risks include the retention of approximately 55 key personnel and studio founders, whose departure following earn-out periods could impact productivity. Furthermore, the group faces evolving regulatory challenges regarding data protection (GDPR/CCPA), "loot box" monetization, and the potential reclassification of virtual currencies as gambling. Exposure to currency fluctuations, particularly the USD, and rising interest rates also pose material threats to profitability. Moving forward, the group aims for 10 billion SEK in net sales by 2023, maintaining a policy of reinvesting all profits into growth rather than issuing dividends.

StillfrontMar 2022

Llibre Blanc de la Indústria Catalana del Videojoc 2022

The 2022 white paper evaluates the state of Catalonia’s video‑game sector, arguing that while the region has become an increasingly attractive hub for development, persistent structural constraints—particularly in talent supply and financing—limit its growth potential. By mapping the ecosystem’s performance against recent trends, the analysis highlights the urgent need for coordinated policy action to sustain the momentum generated by recent investment inflows. A striking 59 % of Catalan studios report difficulty recruiting qualified personnel, a proportion that, although lower than in 2019‑2020, remains markedly high. Financing emerges as the foremost ongoing obstacle, closely followed by challenges in attracting and retaining skilled staff and the absence of competitive fiscal incentives. Despite these constraints, foreign direct investment surged, with five new projects injecting €39.5 million into the local economy and creating 377 jobs, representing a 32 % year‑on‑year increase in employment opportunities within the sector. The findings suggest that reinforcing fiscal support mechanisms, expanding specialised training programmes, and fostering stronger links between academia and industry are essential to convert Catalonia’s investment appeal into durable, high‑value growth. Strengthening these levers would not only alleviate the talent bottleneck but also enhance the region’s capacity to attract further capital, positioning Catalonia as a leading European centre for video‑game development in the medium term.

market-analysis europe spain+2

DEVJan 2022

mergers-acquisitions market-analysis funding+2

Current Report No. 39/2021

The executive leadership of PCF Group S.A. disclosed a notification regarding the acquisition of company shares by a high-ranking official. This regulatory filing, issued on August 18, 2021, confirms that the President of the Management Board executed a purchase of equity within the organization. The disclosure was made in compliance with Article 19, Paragraph 3 of the Market Abuse Regulation (MAR), which mandates the public reporting of transactions conducted by persons performing managerial responsibilities. The scope of this notification is centered on the Polish capital market, specifically concerning the internal ownership structure of PCF Group S.A. at a specific point in the third quarter of 2021. While the summary text confirms the occurrence of the transaction and the identity of the individual as the President of the Management Board, it serves as a formal legal announcement to ensure transparency for investors and regulatory bodies. Such filings are standard procedural requirements intended to prevent market abuse and provide the public with insight into the investment activities of a company’s primary decision-makers. The methodology for this disclosure follows established European Union financial regulations regarding the reporting of insider transactions. By identifying the specific managerial role involved, the announcement highlights a direct increase in the personal stake held by the company’s top executive. This type of activity often signals internal confidence in the long-term value and strategic direction of the studio, which is a significant developer in the global gaming industry. The information provided is strictly factual and administrative, serving as a record of compliance with transparency standards governing publicly traded entities on the Warsaw Stock Exchange.

PCF GroupAug 2021

investment mergers-acquisitions funding+1

Half-Year Report 2021

The first half of 2021 marked a pivotal strategic transition for DON’T NOD as the studio shifted toward a self-publishing and co-production model. This evolution was underpinned by a significant strengthening of the company’s financial position, highlighted by a €50 million capital increase. A cornerstone of this funding was a €30 million investment from Tencent, intended to facilitate expansion into mobile gaming and the Asian market. By the end of June 2021, these maneuvers resulted in a robust cash position of €62.9 million and total shareholders' equity of €89.1 million, providing the necessary liquidity to support a pipeline of seven projects slated for release through 2025. Operating revenues rose 19% to €12.8 million, fueled by a tripling of royalty revenues to €2.7 million and a doubling of capitalized production to €7.8 million. While Operating EBITDA nearly doubled to €3.35 million, net income remained modest at €355,000 due to increased depreciation and amortization of capitalized assets. The studio’s economic performance was further bolstered by €2.3 million in video game tax credits, which helped offset a book operating loss and resulted in a positive economic operating EBIT of €623,000. This financial stability allowed the Group to manage its debt effectively, including the structured repayment of a €3.6 million state-guaranteed loan. Operationally, the company expanded its footprint by opening a Montreal subsidiary and launching a third-party publishing wing, beginning with a collaboration with PortaPlay. Despite the ongoing challenges of the global pandemic, the studio successfully transitioned to a permanent flexible teleworking model for its 245 employees across its Paris and Montreal locations. To align internal interests with this new growth phase, the Group implemented several new employee incentive programs and bonus share plans. These structural and financial developments collectively signal a move away from work-for-hire arrangements toward a strategy focused on owning intellectual property and diversifying global distribution channels.

Don't Nod EntertainmentJun 2021

investment funding mergers-acquisitions+1

Raport Bieżący Nr 27/2021

PCF Group S.A., a Warsaw-based game development studio, successfully concluded a private subscription of Series D ordinary bearer shares on May 31, 2021. The primary purpose of this issuance was to increase the company's share capital through a targeted private placement. The offering was directed exclusively to a single investor, Fiducie Familiale Samuel Girardin 2020, a trust established for Samuel Girardin and related parties based in Montreal, Canada. The subscription involved 387,714 Series D shares with a nominal value of 0.02 PLN each. These shares were issued at an individual price of 75.75 PLN, resulting in a total offering value of 29,369,335.50 PLN. The transaction was executed via a direct subscription agreement rather than a traditional book-building process, meaning there was no reduction rate or division into tranches. All shares were acquired in exchange for cash contributions. The issuance followed a resolution passed during the Extraordinary General Meeting on May 24, 2021, which also authorized the exclusion of pre-emptive rights for existing shareholders. Furthermore, the company initiated the process to dematerialize these shares and seek their admission to trading on the regulated market of the Warsaw Stock Exchange. While the subscription is complete, the final accounting of issuance costs—including advisory, preparation, and promotion fees—remains pending. PCF Group S.A. intends to disclose these specific financial details and the average cost per share in a subsequent regulatory filing once all invoices from involved entities are finalized.

PCF GroupJun 2021

Raport Bieżący Nr 24/2021: Rekomendacja Zarządu w Sprawie Podziału Zysku za 2020 Rok

The management board of PCF Group S.A., a Warsaw-based video game developer, has formally proposed a distribution plan for the net profit generated during the 2020 financial year. Following a board resolution passed on May 26, 2021, the company intends to allocate a total net profit of 29,095,746.74 PLN. This proposal aligns with the company’s established dividend policy and reflects the financial performance of the studio during a period of significant operational activity. The distribution strategy involves a dual approach of rewarding shareholders while maintaining internal capital reserves. Specifically, the board recommends allocating 5,616,877.28 PLN for dividend payments, which equates to 0.19 PLN per share. This payout represents approximately 19.3% of the total net profit for the year. The remaining balance of 23,478,869.46 PLN is slated for transfer to the company’s supplementary capital to support future growth and financial stability. The proposed timeline for this corporate action sets the dividend record date for June 30, 2021, with the subsequent payout scheduled for July 8, 2021. This recommendation is subject to the opinion of the Supervisory Board and requires final approval from the Ordinary General Meeting of Shareholders. The disclosure follows standard regulatory requirements for publicly traded companies in Poland, ensuring transparency regarding the allocation of earnings within the domestic gaming sector.

investment funding game-development+2

PCF GroupMay 2021