Hello, everyone. It's working. Sorry for a small hiccup at the beginning. Hello, everyone. It's very nice to see you all again. I'm Piotr Bajraszewski, Director of Finance and Business Development. With me, we have Przemek Marszał, our CEO. I would like to make a short summary of our strategy that we shared recently. What we do is we create unique and easily understandable games with a message and strong gameplay that wide groups of players will love to play. Games that are and will be market relevant, the games that are and will become hits. This is 11 bit studios. Q1 was a pretty calm quarter for us, with the console release of Death Howl being the biggest event. It was a quarter of intense development of the two big upcoming DLCs that will be released this year.
We are preparing to announce Crop that we announced at the beginning of April with very good results. Moving on to financial results and operational summary. In last quarter, we generated nearly PLN 20 million of revenue, 13% more than last year. Depreciation and amortization was high in first quarter, mainly due to the depreciation of Frostpunk 2, DLC of Frostpunk 2, The Alters, and Death Howl. We had PLN 8.6 million of external services cost, out of which PLN 3.6 million were royalties. We had also staff cost of PLN 4 million, the operating loss was PLN 5.5 million. EBITDA was PLN 5.9 million, significantly higher than first quarter last year, and net loss of PLN 2.8 million, also significantly less than last year. The revenue. The biggest revenue in first quarter was generated by the new title from the external development team, Death Howl.
That is a very good result for us, very huge success, which was generated in a big part by Game Pass deal. Frostpunk 2 and The Alters had weaker quarter. We believe in those titles in the future and their future performance, especially since we have the upcoming DLCs. As we declared at the end of last quarter, we want to share the dev team sizes at the end of each quarter. At the moment, we have two strong teams working on new content for The Alters and Frostpunk 2, and already 27 people working on Frostpunk 1886, and stable increase of the team sizes of P12, P13, and first time, P14. Regarding the internal development, we have two upcoming DLCs coming to Frostpunk 2. One of them is already announced to June. Also, we have advanced works on Frostpunk 1886.
We just had an event where, amongst other things, we presented a little bit more about the Frostpunk 1886. We presented also the first screenshot of the Frostpunk 1886, like first in-game target quality screenshot that was very well received. We are also working on P13, which is a new game in new genre in the Frostpunk universe that we announced recently. Regarding The Alters, we have first paid DLC coming in the upcoming months. External development. We launched Death Howl. As I already mentioned, that had very good financial results in the previous quarter. Very good reception of 94% of positive reviews. Also due to the Game Pass, this is the product that already broke even. We are also aiming toward the early access of Moonlighter 2, with full release planned in the second half of this year.
As I mentioned already, "Crop", that was announced with a very strong performance. Phenomenal performance, actually, the best we ever had regarding the number of wishlist accumulated in such a short period since announcement. Sorry. Sorry, guys. We have signed a new project. However, on that, details to be confirmed. As you know, we do not share information about the project when we sign them, but when we announce them. Prospects for 2026. We are investing in the Next Wave. We made an extensive presentation regarding that last month, just a short summary that the DLC "Breach of Trust" for "Frostpunk 2" coming in June 2026, which was already playtested and have a very good reception because it's wrapping around the core narrative of the game, and it's adding a feature that players enjoy.
Also the third DLC for Frostpunk 2 planned somewhere at the end of this year. The Alters DLC, expanding story and gameplay setting systems, also a very big DLC, which will be released at the end of the second quarter or beginning of the third quarter. Still to be decided. We have unannounced projects, so key internal projects that are moving forward from pre-production to full production. Regarding the external development, Moonlighter 2, full release with new platforms, which is very crucial. As we already highlighted, the switch for Moonlighter 2 is very important, and of course, constantly, we are scouting and evaluating potential games for publishing. How it looks on a timeline. In 2026, we have Moonlighter 2, once again, Frostpunk 2 DLCs, Alters DLCs. In 2027 and 2028, we have Crop and unannounced indie dev projects and Frostpunk 1886.
2028, 2029, P13 in Frostpunk universe, P15, so the reimagining of This War of Mine, 2029, 2030, project P12, so new IP based on This War of Mine universe. 2030, 2031, new P13 from new IP, which will be a new IP. Thank you very much. That's all, and let's move to Q&A. Can you stop sharing the presentation? First of all, feel free to ask questions in the comments. We have some questions that we received prior to the presentation, so we'll go through them as well. I can start with the question that we got from Grzegorz Balcerski in the comments. What was the share of Game Pass payment in dev wholesale in the quarter?
Sadly, we're starting with a question that I cannot answer right away, because in general, with Game Pass, due to the agreement limitations, we can never share exact amounts that we are getting from Microsoft. Sadly, I cannot answer that question. Moving to the question that we received prior to the presentation, there was a question regarding the revenue, because we showed the four games that earned the most in the first quarter, but there was a pretty big other, so someone asked about the revenue coming from Thaumaturge and This War of Mine in the first quarter. The answer for that, so how big was the revenue coming from The Thaumaturge in first quarter, was around PLN 700,000. How big was the revenue of This War of Mine in the first quarter? It was around PLN 1.2 million.
Also, there was a question regarding the last year still, so the fourth quarter and the revenue coming from The Thaumaturge in fourth quarter of the last year, it was again around PLN 800,000. Now I will move also to the questions that we have from the audience, the live questions. When can we expect to reach the break-even point for the production of the game, The Alters? As we do not share the revenue predictions, I cannot pin the exact date. However, we don't have break-even yet, but we see and think it will happen at some point. Sorry for the evasive question. For sure, the launch of the DLC and the big bit that's coming with it will be an important factor here. Sorry, I'm reading the next question from [Nieubwieczny].
Hypothetically, would 11 bit studios as a major shareholder benefit from Fool's Theory success in the market with their ongoing projects? Even though there is no ongoing mutual project between 11 bit and Fool's Theory? Yes, we have 40% of shares in Fool's Theory, which, if you are following our reports, in the last year and first quarter, we had a loss resulted from owning those shares. If the results of Fool's Theory would be positive, it will also be calculated in our results. Are there any plans to expand on bundle sales in between bigger promo actions on Steam? 11 bit already have reasonable portfolio to compose interesting bundles, -40%, -60% discount with their own games, especially the older ones.
At the moment, there are only 10%, 15% bundle with low efficiency between Steam sales." Okay, that's a more complicated question, but in general, we do a lot of bundles. We do a lot of promos outside of Steam, inside of Steam. Historically, we were one of the first to do the big bundle, as you mentioned, the 50%, 60% discount for our portfolio. That was a huge success back in the day, where we sold more than 1 million SKUs in a week. Of course, we know that mechanic, and we use it when we think it is profitable. Very technical answer, but the problem is that now you cannot get the visibility for the bundles itself. Of course, we are testing that constantly and increasing, decreasing discounts, and checking all of that.
Yeah, that's the part of our ongoing business strategy and something that we are doing actively, along with other humble bundles and other deals that we are doing. "Have you already in Q1 recognized all the payment for dev calling Game Pass?" Yes, almost everything. Yeah, almost everything. "When P15 TWoM remake production will start? Isn't the target for 2028 too ambitious considering no developers working on the title right now?" I'm not sure if you want to answer that, Przemysław. I can answer that. We shared that this team will start working at the beginning of third quarter.
Sorry, Piotr.
Yeah. Okay.
I'm thinking about something.
Yeah. No worries. We are getting questions from all over the.
You mean which question? Sorry.
When the production of that TWoM remake will start. We shared that it will be the beginning of the third quarter.
Yeah. It's going to that direction, guys. As we shared a month ago, we started the design process. We are working on the project, et cetera.
Yeah.
We are looking for some people. The core team that will start is already prepared for that. As you know, we are waiting for the DLCs to end. We are working on DLC for Frostpunk 2, of course, for the others, and those are huge teams that are working there. That needs to happen, we can start working on the P15.
Yes. Also, I would like to mention that it's not 2028, it's 2028/2029, which is actually a significant difference. "What was the volume of Frostpunk 2 sold in Q1? What was the volume of the other sold in Q1?" That's not something that I can share right away. In the next report, the half-year report, we'll share the specific data regarding the volumes of copies sold. We'll think about splitting it into quarters to be more clear regarding the size. However, as I said, it was a calm quarter, so majority of the revenue that we generated with those titles came from the revenue of copies sold. Long story short, you can make calculations based on the revenue.
Were you already approached by any third party with a question whether you will be interested in selling your stake in Fool's Theory?" That's something that we are not commenting on. "What's the reason of loss from Fool's? Aren't they operating in work for hire regime? Shouldn't they generate some margin on their work?" That's also a longer and complicated question because it's between Fool's Theory and the agreement they have.
Yeah. I think what you need to understand is that's the independent company.
Yeah.
With the independent management board for the whole company. Of course, we are in talks, and there are a lot of discussions as always, but they have the plan, they have the idea where to grow the company. When we'll be ready, for example, to talk with you guys and share a bit more on what's the direction for Fool's, then it's interesting for me that for today, it's so interesting topic. I think next time we can, for our next queue, we can prepare a section for the Fool's Theory and agree with guys. We will share this and you will, guys, get that information. Count on it that we will do it then. As for now, as I said, it's independent company. We know, of course, where we are going. We have the stakes in them. We believe in the Fool's Theory.
They're working with CDP right now, but the work is really good from what we heard. Next time, we'll be ready to share you more.
The next question, "Are there plans to acquire stakes in the other studios in the near future?" I think we shared that a year ago, already a year ago. That's not the time we are looking for another studios right now. We have a lot of projects. You just see that. The money is needed for what we plan to do. As for now, that's not something we want to grow or expand. There are different areas we want to expand. It's not a topic where we are actively looking for it. There are always talks about when companies come with projects, when we sign deals, there is always an open discussion around that, but it's not an element that we are currently pursuing.
As you saw, I would like to highlight that Piotr already told you that we signed another project for the publishing department for our ex-dev. I'm really happy about that. What you probably also might have seen in the presentation, what Piotr said is for the next year, this mean we will have multiple ex-dev launches. You already saw that and when we will be ready, we'll share you more information about that. We are happy about there is the ongoing process there and ex-dev is doing the next project, et cetera. We are constantly seeing new stuff.
Yep. Another curveball question from Piotr. Thank you very much for that. I already see that you even put the smiley face at the end, so you know that the answer. The question is, "Which universe can we expect to see during Summer Game Fest? 'Frostpunk,' 'The Alters,' 'This War of Mine,' or a new one?" I had to ask, sure. You know that I have to answer that we cannot share that. As I explained recently, we have to be vague sometimes regarding what we are doing next, regarding our marketing bits, because it's important for us not to burn what exactly we are planning next because it can hurt our marketing strategy and actual visibility that such a bit will have. Sadly, I cannot say anything more here, the same as Łukasz recently couldn't say any more in his statement.
Sorry, we have also this question that we got from before. I want to see. I see this. Some of those questions are the same that you posted here. There was a question about volumes of sales of Frostpunk 2 and The Alters. That's something that I said that will be shared for a half year, not a quarter, because it's much more extensive report. The next question is, "How is the progress of work on the DLCs?" I guess for Frostpunk 2 and The Alters. It's going very well. Both of them were already play tested publicly, and internally at the studio, and the reception is very good so far.
I think we can say we don't expect any delays.
Yeah
with what is currently planned, what you saw.
Yeah
with the timeline that Piotr shared. We not see any problems with any delays with those DLCs.
We feel pretty safe with the technical state of the Frostpunk 2 second DLC, which was the issue with the first DLC. The next question is, sorry, it's in Polish. Let me translate it. At what level the DLC will help with the organic sales of the titles? How we want to make it happen? Basically, the DLCs always improve the sales of the base game. We plan to reach out to streamers. We plan to have the marketing campaign wrapped up around those DLCs. With a good reception, it's always an additional boost of the sales of the main game and also people coming back to the game. That's one thing.
Also long-term, I mean very long-term, for years, the DLCs are increasing the average revenue per user that we get from those games, which is very important because as you know, for example, from "This War of Mine," we are selling our games for years. What was the percentage of revenue? Sorry, trying to translate the question at the same time. In first quarter, what was the revenue share split between the external and internal titles? It was around 50% each, 54, something like that. "Death Howl" and "Moonlighter 2" was mainly the biggest chunk of the publishing revenue, the revenue coming from the publishing. That was okay. All the questions. We have still a moment, let's see, what were the questions asked here? Sorry, I will start at the bottom because I start reading the questions up. How are the guys at Carbonara?
Aren't they overwhelmed with such a positive feedback they have received after the 'Crop' reveal trailer? Does anything change in their development pipeline after the reveal trailer? Not exactly. They are good, they are happy, they are excited, but they are not rookies, so they're just moving forward with the game. We believed in the game. The Rufus of the ex-dev director believed in the game from start and believed that it has a very high potential regarding the market appeal. The only thing it proved that he was right. It was not a shock for us.
With showing those screens and those materials, the videos, we already can see what people react to, how they imagine the game.
That's a cool discussion we now can have.
with Carbonara guys. Of course, they are very positive, et cetera, but now we can discuss what fantasies we share, how the people.
Of course.
See that. That's a really important moment, as always, for any project. It is like to have that conversation and the imagination of players what this game will be. We already have some comments on that, some thoughts around that we are currently discussing with the team, et cetera.
The question from [Nieugrypsny], "Will there be military army aspects introduced in the upcoming 'Frostpunk 2' DLC as per the recent screenshot drops on YouTube and X?" That's a kind of loaded question because all we share on YouTube and X is, of course, the material from the game. If you saw that on those screenshots, it's true, and it will happen. However, do not expect. Military and army aspects are in the game, but there won't be, I don't know, world war of automatons happening and some big military battles or anything like that. Yeah, there will be some aspects, but exactly per the recent screenshots that we shared.
Considering plans of P12, P15 development, what scale of CapEx increase we should expect in 2026 and 2027 versus current PLN at PLN 10 million quarterly level? In general, we don't foresee any significant changes in our monthly spendings. It's more of a matter of allocation between products. As we plan to make all the games internally, we do not foresee any huge increases in CapEx. Have you already recouped the production cost of The Alters? No, not yet. Had to ask. I think that's it. Yes.
Yeah. I think that's it.
Yes.
We'll be probably ending.
Yes.
As you guys, I think, saw in the results, it's just the next month after.
yearly conference. Everything is going as planned. Piotr showed you the numbers, showed you the updates on the project. We are happy with where the games are progressing, where the DLCs are progressing, the ex-dev signings, et cetera. It's just a month passed away.
Yeah
We are happy about what we did during that month, and I think that's the key info you should know right now.
Yes.
Okay. Thank you, guys.
Thank you very much.
Have a great day. Thanks. Thanks, Piotr.
Please.
See you next time. If you have any questions, just drop an email to Monika, to our IR, and we'll grab thee or ask you or meet you guys. Till the next time. Bye.