The Management Board of 11 bit studios has resolved to discontinue the development of the game code-named Project 8. The financial impact of this decision will be reflected in the Company’s 2024 financial results.
Project 8 was one of 11 bit studios’ in-house projects, involving 37 team members as at 30 September 2024. Its development began as early as 2018, with total costs amounting to more than PLN 48.4 million by the end of September this year (representing the carrying amount of the related development work in progress). “Our vision for Project 8, which was intended to be our first title designed specifically for console gamers, was bold and exciting. However, it was conceived under very different market conditions, when narrative-driven, story-rich games held stronger appeal,” commented Przemysław Marszał, President of the Management Board of 11 bit studios.
Marszał acknowledged that shifting market trends were not the sole factor behind the project’s cancellation. “With Project 8, we experienced both breakthroughs and setbacks. During the COVID-19 pandemic, stabilising the development team proved particularly difficult, yet progress continued. While we achieved noticeable quality improvements in certain areas, several critical aspects of the game and its development process remained problematic despite multiple iterations. Over time, delays accumulated, and with each milestone, the project’s budget grew,” he explained.
The tipping point came after a thorough evaluation of Project 8’s most recent milestone. “When assessing a project, the Management Board always considers its development progress, including internal reviews and independent surveys. We also factor in market analyses and the game’s sales and marketing potential,” said Marszał. “Unfortunately, in this case, our findings revealed unresolved issues and challenges that would require further extensions of the production timeline and corresponding budget increases to address. This, coupled with revised sales forecasts, largely reflecting the changing market environment, raised significant doubts about the project’s overall profitability,” stated Marszał. He also added that, in light of these developments, the Management Board of 11 bit studios lost confidence in completing Project 8 within a reasonable timeframe and at a satisfactory quality level, which ultimately led to the decision to terminate the project.
The discontinuation of Project 8 will necessitate the recognition of an impairment loss on the related development work in progress. Preliminary estimates suggest this could amount to approximately PLN 48.4 million, the project’s carrying amount as at 30 September 2024. “We are currently auditing the assets developed for Project 8 to assess their potential application in other initiatives. We can already see opportunities for some of these to be repurposed elsewhere,” said Marszał. He also noted that the disclosed figure represented the carrying amount of the development work in progress as at the end of September 2024 and that the costs continued to rise at a rate of approximately PLN 0.8–0.9 million per month, driven primarily by team salaries.
The closure of Project 8 will also result in a reduction of staff involved in its development. Marszał assured that affected employees would receive severance packages. “We will provide psychological counselling and assistance in finding new employment to anyone who wishes to take advantage of it,” he declared. Due to the phased nature of the workforce reduction, the full costs of discontinuing Project 8, which will also be reviewed by the Company’s auditor, will not be known until the release of the Annual Report for 2024.
Marszał further stressed that more than half of the current Project 8 team will be offered opportunities to transition to other existing teams or to new, as-yet-unannounced initiatives. “Looking ahead, 11 bit studios is continuing intensive work on several key projects, including Frostpunk 2, which recently became the Company’s first title to win the industry’s prestigious The Game Awards. The team is also gearing up for the launch of The Alters, another highly anticipated release. But that’s not all. We have a clear and well-defined roadmap for the future and have already taken concrete steps to move forward. Some of these initiatives, which are highly promising from a business perspective, will help fill the gap left by Project 8. We look forward to sharing more details soon,” Marszał concluded.
