11 bit studios pulls plug on Project 8 amid cash crunch

Sankunni K December 18, 2024
11 bit studios pulls plug on Project 8 amid cash crunch

Polish game developer 11 bit studios has announced the shutdown of its highly anticipated game, Project 8, and the layoff of a portion of its development team. The decision comes after the company conducted an audit of the project and concluded that it could not justify further investment due to the game’s growing budget and increasingly uncertain future.

Image: Frostpunk by 11 bit studios

Project 8, which had been under development since 2018, was positioned to be 11 bit’s first game specifically designed for console gamers. The game’s concept, centred around multiplayer elements and a strong narrative, was initially conceived during a time when deep story-driven games were gaining popularity. However, Przemysław Marszał, Chairman of 11 bit studios, stated that the market has shifted since then, making the original vision increasingly difficult to sustain.

“The development of Project 8 faced several challenges. We had to increase both the budget and timeline multiple times, but despite our efforts, it became clear that the project would not generate sufficient returns,” said Marszał in a statement.

As the company faced mounting costs, the audit revealed that the project would require even more time and funding to meet expectations. According to company reports, as of September 30, 2024, 48.4 million zlotys ($11.9 million) had already been spent on the game, with that figure increasing by approximately 800,000 to 900,000 zlotys ($197,000 to $221,000) each month in developer salaries alone.

The shutdown of Project 8 will result in a substantial write-off. Still, the company is not completely abandoning the work done so far. 11 bit studios has announced plans to repurpose aspects of Project 8’s development for other projects. About half of the developers working on the game will be transferred to other teams, while the rest, who were part of the 37-person team working on the project, will be laid off.

Tough year for 11 bit studios

The closure of Project 8 has come at a particularly challenging time for 11 bit studios, following a series of setbacks this year. The company’s shares have fallen dramatically, dropping over 70 percent from 543 zlotys ($132.9) in January to just 156 zlotys ($38.46) at the time of this report. This marks their lowest value since January 2017 and follows a steep decline after the disappointing launch of Frostpunk 2 in September. The game’s underwhelming reception caused significant concern among investors, contributing to the company’s ongoing financial troubles.

The company had hoped for much better returns from both Project 8 and Frostpunk 2, but both titles failed to meet expectations. The announcement of Project 8’s closure has led to a fresh round of losses on the stock market, with shares dropping by as much as 11.7 percent after the news broke.

Broader decline in the Polish gaming sector

The struggles of 11 bit studios are not an isolated case. The broader Polish gaming sector has also faced difficulties this year, with several companies experiencing significant declines in stock value. For example, People Can Fly saw a 70.8 percent drop in its stock price, while Creepy Jar and Drago Entertainment also experienced steep declines of 58.2 percent and 66 percent, respectively. In contrast, CD Projekt, known for its work on The Witcher and Cyberpunk 2077, has bucked the trend with a 60.1 percent increase in its share price.

Despite these setbacks, 11 bit studios has not entirely given up hope on its future. The company continues to focus on its existing IPs, such as the Frostpunk franchise and has hinted at new projects that could eventually turn the tide. However, the closure of Project 8 and the company’s 71.5 percent drop in stock value this year have raised serious questions about its ability to rebound.

The world’s biggest iGaming community brings you SiGMA’s Top 10 news countdown. Our weekly newsletter brings you all the latest from the world’s iGaming authority. Subscribe HERE to stay ahead and unlock subscriber-only offers.

Recommended for you