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People Can Fly updates strategy, will focus on self-publishing


NeoGAFs Kent Brockman


  • The management board of PCF Group S.A. has adopted a development strategy update for the company and the People Can Fly group. Most of the games from the group’s portfolio will be developed in the self-publishing model. In the management board’s opinion, in the longer term this may be much more profitable than the model of cooperation with publishers carried out to date. The group’s strategic goal is to generate at least PLN 3.0 billion in cumulative revenues in 2023–2027.
  • The company plans to further reinforce its game development teams. The main shareholder of PCF Group also intends to introduce an incentive program under which key employees and contractors will obtain the right to acquire the company’s shares constituting up to 4.13% of the current share capital, without diluting the existing shareholders. This will occur under the condition that the group earns a cumulative EBITDA in 2023–2027 of PLN 1.5 billion.
  • To implement the new strategy, the company plans to raise proceeds from a new issue of shares worth about PLN 205–295 million.
“Two years after our IPO, we can state that all our short-term strategic goals have been achieved or exceeded,” said Sebastian Wojciechowski, CEO of People Can Fly. “We have expanded our production teams and signed on world-class professionals, from creative directors to developers. They are the elite of the gaming industry. Many of them have collaborated with the most admired studios, creating games that have won acclaim among players and achieved commercial success. We also conducted an internal transformation, from our method of working on projects to global reinforcement of support structures. We have the resources, experience and knowledge to work effectively on several projects simultaneously. Since our debut on the Warsaw Stock Exchange, our teams in North America have begun work on two entirely new games from the AAA segment, with attractive target groups, which today are in the pre-production phase.”

In the last two years the group also successfully completed work on the Outriders game and the expansion Outriders: Worldslayer, in cooperation with the publisher Square Enix. Moreover, the group greatly strengthened its development teams—in numbers and competencies—among other things thanks to the acquisition of new teams in the United States, Canada, and Poland. There are now over 600 people working in the group, as compared to 280 at the end of 2020.

Vladimir Makarychev, Head of Publishing at People Can Fly, commented: “The company has also built up knowledge, skills, and resources to successfully self-publish games. We are now ready to bring our games to gamers entirely on our own. We have no doubt that in the longer perspective, this may be a much more profitable business than the model to date of cooperating with publishers. Self-publishing a game gives us greater control over the development process, choice of the optimal monetization model, and shaping the marketing, sales and distribution strategy. Self-publishing obviously also allows the developer to retain a larger percentage of the sales revenue. We are aware that this model carries greater risk, but we can mitigate the risk by diversifying the portfolio of games and developing multiple games simultaneously.”

People Can Fly is currently working on seven projects at various stages of advancement. The game code-named Project Thunder for virtual reality (VR) platforms, developed by the group subsidiary Incuvo, will be launched later in 2023. Incuvo is also working on Green Hell VR, which launched last year on the Oculus Quest 2, Oculus Rift and Pico platforms and PC, and this year is slated for release on further VR platforms (HTC and Sony). Meanwhile, four games from the AAA segment are now in the pre-production phase. The company plans to release three of them—Project Dagger, Project Bifrost and Project Victoria (each developed by a separate team)—in the self-publishing model, with launches planned for 2025–2026. And the launch of the game code-named Project Gemini, which People Can Fly is developing in the work-for-hire model with the group’s long-time publisher, Square Enix, is planned for 2026. Another game in the People Can Fly pipeline is Project Red, currently at the concept/ideation stage.

According to Satoko Jenkins, CFO of People Can Fly, “The company’s strategic aim is to generate cumulative revenue in 2023–2027 of at least PLN 3.0 billion. We strongly believe that the rescaling of PCF’s business as a result of implementation of the strategy will bring a significant increase in value for shareholders.”

People Can Fly will continue to collaborate with reputable partners using the work-for-hire model on selected projects, if attractive opportunities for such cooperation arise. These arrangements provide financial stability for the company, with room to experiment and innovate, and if the projects breakeven, generate additional financial benefits.

The key principles of the People Can Fly strategy also include expansion of development teams and raising their professional qualifications, while maintaining high employee retention and satisfaction and the unique organizational culture.

The main shareholder of PCF Group, Sebastian Wojciechowski, also intends to introduce an incentive program in which key employees and contractors will obtain the right to acquire shares of the company not exceeding 4.13% of the current share capital, without diluting the existing shareholders. This will occur in particular on the condition that the group generates a cumulative EBITDA of PLN 1.5 billion in 2023–2027. Half of the shares offered in the program will be allocated to eligible individuals after exceeding 80% of the target cumulative EBITDA, and the other half along with the increase of the cumulative EBITDA until the target level is reached, when 100% of the offered shares will be allocated to eligible employees or contractors of the group.

These shares will be offered at the highest of the following prices:

  • The price of the company’s shares on the Warsaw Stock Exchange on the date of allocating the shares to the eligible individual (understood as the date of signing the agreement between the eligible person and the main shareholder);
  • The price per share for institutional investors from the company’s IPO in 2020;
  • The price per share determined for the purpose of the new share issue.
The main shareholder’s lock-up period (except for shares earmarked for the incentive program or purchased after the IPO) will be extended until the end of 2027, except for strategic and tender offer transactions.

For implementation of the new strategy, the company plans to raise funds from a new issue of shares in the amount of approximately PLN 205–295 million. It will be conducted as a private subscription (not requiring publication of a prospectus), directed exclusively to qualified investors or investors taking up shares for a total value of at least EUR 100,000. The final number and price of the offered shares will be determined through an accelerated bookbuild.

The company plans to allocate the proceeds entirely towards completion of the Dagger, Bifrost and Victoria projects, by expanding the development teams to a level appropriate to the specific stages of development of those games.

Relevant resolutions on the planned increase in the company’s share capital, excluding the existing shareholders’ pre-emptive rights, will be submitted to a vote during the extraordinary general meeting of the company convened for 28 February 2023.

In addition, for the purpose of implementing the new strategy, the company intends to use its own cash, operating funds generated by the company, and other available sources of financing, which will not dilute shareholder ownership.

PCF Group has also published selected estimated financial results of the group for 2022:

  • Sales revenue: PLN 170 million
  • EBITDA: PLN 48.5 million
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