The future looks bright for the Polish gaming business

08.11.2018 | By Mateusz Perowicz

With more than 300 developers and 500 million USD of total market value, Poland’s gaming industry, in terms of generated revenue, is placed 23rd (out of 100) in the global charts. What is more, 80% of game developer firms declare an intention to increase employment. Polish video games producers successfully conquer foreign markets.

If someone decided to write a screenplay based on a history of establishing Poland’s gaming companies, it would probably bear a strong resemblance to the plot of the famous Slumdog Millionaire. Transporting floppy disks in communist-era iconic car, Fiat 126p; distributing Amiga games and setting up a humble stall on one of the early-capitalist open-space markets, with home-burned CDs – this is how it all started for Michał Kiciński, Marcin Iwiński, Krzysztof Kostkowski and Paweł Marchewka, who later became founders of the globally known gaming companies, such as CD Projekt, PlayWay or Techland. Back then, however, the world of great game publishers remained very distant. Trying to be a part of this great industry involved basic activities, like video games translation or products distribution.

NowadaToday, breaking all previous records, they have joined the elite club of large players, with their business still developing. Previous productions (e.g. Dead Island, This War of Mine or The Witcher), widely recognised by the society of gamers, have to make room for new pieces delivered by Polish publishers and producers, such as Dying Light, Frostpunk or Cyberpunk 2077. Apparently, this is only the beginning.

PlayWay: 40 different teams and a boss without salary

For PlayWay, it all started with choosing a good distribution channel. Local kiosks, as the primary suppliers for the gamers back in the ’90s, played their roles well. This is when Maluch Racer, one of the iconic series of Polish racing games, featuring the iconic communist era car, the Fiat 126p, was created.

The market began to change with time – and so did the company. Looking at the work organisation, PlayWay is quite a phenomenon: it consists of about 40 different teams, systematically doing research by launching various low-budget productions into the market. An excellent example of that strategy is this year’s Car mechanic simulator which is supposed to be a reference to Krzysztof Kostkowski’s passion for automobiles, and a real blockbuster Farm Manager 2018, in case of which the costs of production and marketing were covered in the very first 24 hours. During 48 hours from the premiere, this game was sold in more than 20 thousand pieces which gave PlayWay nearly 260 thousand US dollars income. The simulator gained market recognition all over the world – every fifth buyer would come from the USA, accompanied by buyers from China, Germany and Russia. Shortly after the date of release, the production was ranked in the top ten of the most popular games uploaded onto Steam – the most significant digital games distribution platform in the world.

A company president decisively reduces bureaucracy’s costs. Instead of appointing another VPs and hiring office workers, he prefers to form further professional teams. In 2016 he gave up his own salary for five years. Thanks to such an approach towards running the business, the company is able to release several dozen games every year.

In the autumn of 2016 PlayWay debuted on the Warsaw Stock Exchange. In January 2017 an estimated value of one share was PLN 64 (about 17 USD). Since then, the price has doubled, amounting today to over PLN 130, hence the capitalisation is oscillating now between PLN 600 million and PLN 700 million. Contributing factors were: good results of this year’s production and information about signing a contract with Shenzhen Tencent Computer Systems, that will let PlayWay distribute its products in China.

11bit studios: winner of over 100 gaming industry prizes

11bit studios are collecting victories. Their first game, Anomaly Warzone Earth,  got the best reviews among all games prepared for Apple devices in 2011. It got even better afterwards.

Three years later This War of Mine conquered global market. Although the production absorbed 500 thousand euros, authors of the game didn’t need to bother themselves: two days of sale was enough to forget about the incurred expense.

Within barely a half of year, the game generated EUR 3 million profit. This War of Mine was being widely commented in the press (“Time’, “Edge’, “Washington Post’),  reviewed by customers and applauded by gamers. Altogether, it got over 100 awards.

The studio did not look to its laurels: in April 2018 Frostpunk was launched into the market. 250 thousands of copies sold in only 3 days made the producing costs refunded with interest. After 14 days from the release date, sales were four times as big as before, when 11 bit studios’ previous production was announced.

Further business plans haven’t been revealed yet. The company only proclaimed a launch of a mysterious Project 8. What we know is that in a couple of months four titles –  This War of Mine, Beat Cop, Moonlighter and Children of Morta – are going to appear on the Nintendo Switch platform.

11 bit studios was set up by Michał Drozdowski, Bartosz Brzostek, Przemysław Marszał and Grzegorz Michowski; at the moment it hires over 100 employers. At the beginning of this year, the value of one share was nearly PLN 200, today it is over PLN 300 (and still growing) and the capitalization is more than PLN 702 million.

Techland: rags to riches story

One more company with impressive sale results is Techland. Its founder, Paweł Marchewka, started his business in the 1990s, offering floppy disks for Amiga.

The first world-renowned productions were: Extermination, Crime Cities and Speedway Manager. Each consecutive game indicated the necessity of raising standards. A great mass mainstream popularity was gained by Dead Island and the series Call of Juarez. These two productions were sold in the total amount of 10 million pieces, but it was Dying Light that turned out to be the best of Techland’s games.

In January 2015, according to the NPD Group, Dying Light had the broadest appeal among American gamers, becoming even more popular than record-breaking The Evil Within – another survival horror game. Within first 45 days, it gained 3.2 million consumers, placing in the top of sales rankings in many significant markets: American, British, Australian, Swedish, French and Polish. Altogether, the game gathered 11 million gamers. Techland has already announced a second part of the series which is planned to be released in 2020.

Techland is not listed on the stock exchange. However, rumour has it that the company attended some meetings with consultants and brokerage houses. Editorial board of strefainwestoró made an attempt to prepare a preliminary estimate of Techland’s total value. At the end of 2016, its income was PLN 206 million, while in 2017 – PLN 172 million. Due to regular profits from games distribution combined with ambitious plans for next productions, the estimated value amounts to PLN 7-10 billion. It would give Techland the second position among games producers on the Warsaw Stock Exchange, right behind an undisputed leader: CD Projekt.

CD Projekt: a Polish hegemon

CD Projekt is a king of the Polish gaming industry. The company is getting stronger and stronger on the Warsaw Stock Exchange, overtaking others regarding capitalisation. Incoming financial rates and information about forthcoming game Cyberpunk 2077 caused the stock value to grow even more. Since the day the company have joined the stock exchange, its total value increased a hundredfold.

However, the very beginnings of this project were not that promising. Michał Kiciński and Marcin Iwiński, who have been friends since their school days, once started doing business together. As it could be easily predicted, the business was merely floppy disks dealing. They would buy games abroad and sell them at a profit here, in pre-internet Poland, where the lust for western productions was continually growing. Being men of driving ambition, they set up CD Projekt in 1994, both at the age of 20. Young businessmen correctly foresaw a CD revolution: distributing games on CDs started to be their source of income. Then it was time to focus on games translation so that they could distribute a product in Polish version on the local market. That helped CD Projekt discover the whole process of creating digital entertainment.

Finally, CD Projekt RED – a division responsible for games production – was established. The corporation acquired rights to transfer Andrzej Sapkowski’s story to a digital world. This case illustrates a grand scale of CD Projekt’s development: the creator of The Witcher fiction while selling the video game rights to CD Projekt Red, was offered either a percentage of the profits or a single payment. He chose the second option, as he did not believe that these young game enthusiasts who had been just debuting could ever succeed with their production.  But The Witcher game was once a dream of Marcin Iwiński – a dream that came true spectacularly. The game now consists of three parts, sold in the total amount of 33 million pieces. The last one – The Witcher 3. Wild Hunt – turned out to be a blockbuster and was sold in 6 million pieces during the first 6 weeks.

All the prizes collected by The Witcher 3: Wild Hunt are hard to count. After having awarded more than 250 titles and statuettes (in category ‘The game of the year’), it broke the record and became the most award-winning production in history.

Altogether, the game got over 800 prizes. Another 60 was gained by the expansion pack called Blood and Wine. The White Wolf’s adventures beat remaining productions, such as Dragon Age or GTA. In the third part of The Witcher, players could try a card-based minigame called Gwent, and they enjoyed it so much, that CD Projekt’s only choice was the full release of the game. Today, Gwent is being played in 197 countries.

For now, CD Projekt is bringing a lot of attention due to their latest production: Cyberpunk 2077. That we could find out during this year’s Gamescom – one of the biggest trade fairs for video games – held in Cologne on 21 August to 25 August 2018, where over 160 square metres were occupied by 35 Polish exhibitors.

Cyberpunk 2077’s gameplay, shown behind closed doors, really drew a crowd. Not surprisingly, they run out of space quite quickly. The gameplay, lasting for nearly 50-minutes, got 6 million hits on the official YouTube channel and an extra 2 million on GameSpot channel – and it was just three days after the release.

CD Projekt is continually developing. Teams responsible for oncoming productions work in studios in Warsaw, Cracow and Wrocław, while the marketing and sales activities concerning The United States and China are supervised in headquarters in Los Angeles and Shanghai.

At the beginning of 2018, the value of one share was oscillating below the level of PLN 100; later on, it exceeded the barrier of PLN 200 significantly; now it is worth about PLN 160. However, the value of the whole company is estimated to be in the region of PLN 15 billion.

Vivid Games, games are going mobile

Another strong field for Polish game producers, especially for Vivid Games, is connected with a mobile games industry. Vivid Games release free-to-play mobile games, the ones that do not need to be paid for. The most famous piece is a brand called Real boxing which in five years got downloaded 53 million times and earned PLN 45 million of income.

Lately, there was another success to celebrate: a game called Space Pioneer recorded 400 thousand downloads which led to its global recognizability. It also found itself in the top ten of the most-downloaded RPGs in over 100 countries, according to Apple App Store’s rankings.

2018 brought yet two other productions: Gravity Rider and Mayhem Combat.

And what’s next?

Marcin Kosman, author of a book “Not only The Witcher – the history of Polish computer games”, admits that it is exceptionally dull to explain, where is the source of success for Polish game producers. According to him, there was no billionaire, who had been throwing money at them or genius, who conquered the whole world the first time around. ‘Marcin Iwiński, Paweł Marchewka, Adrian Chmielarz, Maciej Miąsik, Mirosław Dymek or Marek Tymiński are in the business long enough to have made some mistakes – to sign an agreement with a cheating publisher or release a poor game that brought nobody’s attention. However, they were learning from these mistakes. Therefore, they still keep functioning’, he says.

Adam Kiciński, the president of the CD Projekt SA, states in the PwC report: ‘One of the challenges that currently has to be faced by the whole industry is a difficulty in acquiring new employees with different specialisations – artists, screenwriters, graphic designers. In Poland, we lack systemic measures, which could lead to establishing tight cooperation between practitioners who work in development studios and universities.’

Involvement in the process of improving the gaming branch was declared even by the Polish government. Currently, another edition of GameINN program is being run, thanks to which producers can get PLN 100 million financial help. The funding comes from the resources of the National Centre for Research and Development. The program itself came into existence on the initiative of the Polish Games Association which brings together several gaming companies. What we should do now is hope that governmental support will provide real help developing Polish companies, so that it becomes possible to increase the percentage of Polish producers in the world video games market gradually.

Translation from Polish: Hanna Groborz


This publication has been cofinanced by the Ministry of Foreign Affairs of the Republic of Poland within “Cooperation in Public Diplomacy 2018” programme.
This publication reflects the views of the author and not the official stance of the Ministry of Foreign Affairs of the Republic of Poland.