11 bit studios Q1–Q3 2025: Revenue Drop, Amortization Shock, and a Pipeline Betting on a Narrow IP Portfolio
A sharp profit contraction masked by accounting shifts. Revenue down, amortization exploding, and the pipeline concentrated around just two titles.
11 bit studios Q1–Q3 2025: Revenue Drop, Amortization Shock, and a Pipeline Betting on a Narrow IP Portfolio
Executive Summary
Elephant in the room: profitability collapsed.
Despite launching two major titles (The Alters and Frostpunk 2), 11 bit studios posted a 21% YoY decline in net profit—from 47.5M PLN in Q1–Q3 2024 to 22.0M PLN in 2025. The single biggest driver? A massive surge in amortization, tied to newly launched games and a shift to a degressive amortization method beginning in Q4 2024.
The top line did not save them either. Revenue fell 5% YoY despite two major releases, implying underperformance or short tails for The Alters and Frostpunk 2. Cash flow held up mostly due to working-capital swings—not operational strength.
Verdict: Bearish. The numbers show a studio that is no longer riding the long-tail wave of Frostpunk and This War of Mine. The new releases are not offsetting higher production costs, while the pipeline is thin and the revenue base is increasingly volatile.
Key Financial Metrics (Q1-Q3 YoY Comparison)
The profitability deterioration is stark. EBITDA is propped up mainly by amortization and adjustments, rather than true operational strength.
Key Financial Metrics (Q3 YoY Comparison)
Portfolio Performance: Winners, Laggards, and Red Flags
The Alters — A solid start, but not a blockbuster
Revenue: 37.0M PLN.
For a newly launched flagship IP, this is modest. It does not signal a breakout success.
Frostpunk 2 — Underwhelming relative to expectations
Revenue dropped from 52.3M PLN → 32.1M PLN (–39%).
This is the most troubling datapoint: a highly anticipated sequel performing worse than the market narrative suggested.
Frostpunk (original) — Long tail evaporating
Revenue collapsed from 22.2M PLN → 10.5M PLN (–53%).
The Thaumaturge — Weak and deteriorating
Revenue fell from 6.8M PLN → 5.35M PLN (–21%).
This War of Mine — Stable but low
Grew slightly from 4.87M → 5.88M PLN, but too small to affect overall results.
“Other” category — A concerning collapse
From 20.46M → 10.42M PLN (–49%).
Indicates weakening publishing revenues or poor performance of non-core titles.
Overall Takeaway
The revenue base is dangerously concentrated around two IPs. Everything else is shrinking, offering little diversification.
Future Outlook & Pipeline: Optimistic Narrative, Fragile Reality
Management gives high-level statements about continued production, but no concrete release dates for upcoming titles.
Key points:
- Degressive amortization over 7 years assumes strong long tails. Early revenue suggests otherwise.
- Capitalized development costs remain high, exceeding 16M PLN in external development.
- Pipeline delays remain a risk, given prior slippage (The Alters).
Without new releases in early 2026, a revenue gap is almost guaranteed.
Risk Assessment
Revenue Concentration
The Alters + Frostpunk 2 = 69% of total revenue.
Profitability Pressure From Amortization
Amortization rose from 5.0M → 24.1M PLN (+387%). This will continue to weigh on results.
Weakening Long Tails
Catalog revenue declined sharply across nearly all older titles.
Rising Marketing & Service Costs
External services grew to 29.5M PLN, driven by aggressive marketing and production work.
Unreal Engine Licensing Exposure
Complex royalty structures create additional volatility.
Pipeline Timing Risk
No clear 2026 roadmap. History suggests delays are possible.
Management Commentary: What Was Said vs. What Was Avoided
Management emphasized:
- Solid launches of new IP
- Strong cash reserves
- Continued investment in future titles
But they avoided discussing:
- The severe profitability collapse
- Frostpunk 2’s underperformance
- Lack of sales trajectory details
- Any concrete release timings
The tone is cautious and procedural, lacking the confidence seen in earlier years.
Final Verdict: A Worrying Transition Year
11 bit studios enters 2026 with:
- Shrinking revenue in key franchises
- Exploding amortization
- Weak long-tail monetization
- A highly concentrated portfolio
- No major releases clearly scheduled
Unless The Alters or Frostpunk 2 show unexpected legs, 2026 earnings could weaken further.
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