CI Games Q3 2025: Marketing Burn Skyrockets as Revenue Stagnates — A Deepening Profitability Crisis
CI Games posted a severe YoY deterioration in Q3, driven by collapsing profitability, surging marketing spend, and escalating reliance on debt-funded development.
Executive Summary
The elephant in the room is simple: CI Games’ Q3 2025 profitability has collapsed.
Despite almost identical revenue YoY, the company posted a –9.9M zł net loss in Q3 2025 versus –2.0M zł a year earlier. The deterioration is not a seasonal fluctuation but the result of aggressive, debt-funded marketing and rising development intensity without any major new releases to sustain cash inflows.
The company is caught between a shrinking back-catalog and heavy pre-release spending for its next flagship title. This has pushed margins to their weakest point since the pre–Lords of the Fallen era. Management’s commentary admits no 2025 releases — meaning Q4 will not repair the structural pressure.
Overall verdict: Bearish.
Key Financial Metrics (YoY — Q3 Only)
The most troubling pattern: revenue stagnation with exploding costs, signalling an unsustainable cost structure in a no-release year.
Portfolio Performance
Back-Catalog Dependency Intensifies
The quarter had no new releases. Revenue is driven primarily by aging portfolio titles:
- Lords of the Fallen (2023) — still the main contributor, but its monetization is sharply decaying.
- Sniper Ghost Warrior Contracts 2 — long-tail sales provide minor support.
- United Label’s Tails of Iron 2 launched in January, meaning Q3 is pure tail-phase revenue.
This matters because flat revenue in Q3 highlights weakening catalog contribution. Without fresh releases, CI Games is increasingly reliant on deep discounts and promotional cycles to keep sales afloat.
Lords of the Fallen 2.0 Marketing Blowout
Management acknowledges significant Q2/Q3 marketing spend tied to the “2.0” relaunch and trailer production for the next installment. But the brutal truth is that:
- The spend does not translate into Q3 revenue uplift.
- EBIT margin collapses accordingly.
- It effectively cannibalizes cash flow without commercial payback in this quarter.
United Label, despite multiple releases in 2024–2025, does not meaningfully offset CI Games’ core title dependency.
Future Outlook & Pipeline
Management repeats that no new CI Games title will launch in 2025.
The next major product is the new Lords of the Fallen installment, distributed on PC exclusively via Epic Games.
Critical observations:
- Epic advances are booked as liabilities, not revenue — meaning they increase debt-like obligations without improving the P&L.
- Capitalized development continues to grow aggressively (intangibles up +39M zł YTD).
- Without releases, amortization won’t offset these rising capitalized balances until 2026 or later.
The pipeline timeline is hazy. Phrases such as “preparing for release” or “development continues” appear, but there is no concrete 2026 release date. In game-development terms, this is a red flag pointing to possible schedule slippage.
Risk Assessment
Revenue Concentration
The group remains disproportionately dependent on a single franchise (Lords of the Fallen). Failure of the next installment to meet expectations would materially damage solvency.
Rising Debt and Financial Leverage
Short-term debt jumped from 14.9M zł to 39.2M zł (31.12.2024 vs 30.09.2025) as per balance sheet data. This is a direct consequence of borrowing to fund production and marketing.
Margin Compression
Operating costs rose faster than revenue:
- Cost of sales surged YoY.
- Selling costs ballooned due to marketing spend, up from 3.6M zł to 7.5M zł in Q3 (over 100% increase)
Fragile Cash Dynamics
Despite positive YTD cash flow, Q3 alone generated only 6.9M zł operating cash vs huge resource allocation to development and marketing — pointing to an increasingly tight liquidity profile.
Capitalization Strategy Risks
The company continues to heavily capitalize development costs.
This boosts paper EBITDA but masks true cash burn and delays impairment recognition.
Management Commentary — A Forensic Reading
Management attributes the weak quarter to:
- seasonal factors,
- increased marketing intensity,
- lack of new releases.
However, this narrative ignores the deeper structural issues:
- Marketing intensity doubled without corresponding revenue uplift.
- The back-catalog is aging quickly.
- Capitalized development is ballooning to levels that imply major future amortization pressure.
- There is no firm 2026 release date — an omission that seasoned investors should interpret as potential delays.
The tone of the report is notably defensive and vague, with repeated emphasis on “continuation of development” rather than milestone-based updates.
Final Assessment
CI Games’ Q3 2025 paints a clear picture: a company burning cash to sustain hype for an upcoming release that is still far from monetization. With flat revenue, rising costs, heavy reliance on debt, and a pipeline that lacks specific dates, the investment case has deteriorated materially.
Forensic verdict: Bearish — the core issue is not seasonality but structural profitability erosion in a no-release year.