From Communist-era roots to cash cows: Poland's gaming industry takes on the world
"People are starting to take notice of Poland,"
The drab exteriors of a pair of 1970s buildings in an industrial Warsaw neighborhood belie the hive of high-tech activity inside where developers, screenplay writers and others at leading video game maker CD Projekt hustle to create the next global hit.
Poland - Eastern Europe's biggest economy - has quietly developed into a leading video game exporter thanks to low labor costs, a young educated workforce and a thriving gaming tradition rooted in the Communist era.
After CD Projekt's top-selling Witcher series put the country on the map, foreign investors are keenly searching for promising game developers in a fast-growing market.
"People are starting to take notice of Poland," said Borys Musielak, founding partner at U.S.-Polish venture capital firm SMOK Ventures, which is in talks with two Asian investors to fund local gaming companies and in January made its first such investment alongside a Finnish partner.
"There have been mainly angel investors and some private equity but now global venture capital groups are looking into the region."
Poland's booming video game and esports market was worth $664 million in 2019 — up from $400 million in 2014 — and is projected to climb to nearly $850 million over the next four years, according to data from PwC.
WITCHER
The success of CD Projekt's medieval fantasy world Witcher has been a key driver. Based on a series of best-selling Polish books and the basis for a Netflix show that premiered in December, the games have sold more than 40 million copies worldwide.
The release later this year of the company's first person futuristic adventure game "Cyberpunk 2077" is likely to sharpen focus on a sector in which eight companies listed on the main market of the Polish stock exchange between 2015 and 2019.
On the NewConnect market — the bourse's exchange for smaller companies - 21 debuted during the same period.
"Historically, a lot of those companies chose the stock exchange to finance themselves because there were not many ways to raise capital," said Mariusz Gasiewski, head of mobile gaming and apps at Google in Poland. "Now it is getting easier as more interest comes from abroad."
The combined value of the listed gaming companies leapt 82% to more than 32 billion zlotys ($8.36 billion) last year, led by CD Projekt, 11 bit studios, PlayWay and Ten Square Games, according to exchange data.
Moreover, CD Projekt's roughly 27 billion zloty valuation is rapidly catching up with that of Poland's biggest company, refiner PKN Orlen, at 36 billion zlotys.
