FOR THE YEAR ENDED 31 DECEMBER 2024
SUPERMASSIVE GAMES LIMITED
COMPANY INFORMATION
SUPERMASSIVE GAMES LIMITED
CONTENTS
SUPERMASSIVE GAMES LIMITED
GROUP STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present their strategic report of the company and the group for the year ended 31 December 2024.
Supermassive Games continued a strategy of primarily developing cinematic narrative games in 2024.
The group comprises Supermassive Games Limited as the parent, Supermassive Games 1 Limited, Supermassive Games 2 Limited and Supermassive Games 3 Limited as production and development subsidiaries and Starshape Games Limited which operates as a digital asset production and licensing company.
The studio continues to invest in its own intellectual property (including the Dark Pictures series of games) as well as work on projects on a ‘Work for Hire’ basis for leading publishers.
Following a detailed review of the business, the difficult decision was made in early 2024 to cease a number of self-funded development projects and enter a collective consultation period with staff, with a view to reducing headcount in the company. The company consequently made 81 staff redundant in April 2024. At the same time the company restructured the organisation, and finalised changes to the senior management team, concluding a six-month period of change.
Subsequent to the reporting date, during July 2025, the group initiated a further consultation and restructure process, which is expected to result in the reduction of approximately 36 roles. This initiative forms part of the group’s continued efforts to align its cost base with strategic priorities. At the date of approval of these financial statements, the consultation process remains ongoing.
Whilst these decisions and events resulted in short-term turbulence for the company, it is believed that the focus on a smaller number of projects, a reduction in the overall cost base and a more efficient structure will enable the company to grow sustainably in the years ahead, and better weather the continuing headwinds facing the industry.
The application of the Video Games Tax Relief and its replacement the Video Games Expenditure Credit continues to make a significant contribution to sources of development income and will have a positive future influence over the appetite for placing development work in the UK. The tax reliefs enable the studio to continue to be able to invest in game titles, senior and technical staff, and new processes which enhance its innovation capability and productivity.
Key performance indicators - financial and non-financial
Turnover for the year was £16.3m (2023: £21.2m) and the loss for the year was £15.3m (2023 loss: £17.1m). The reduction in turnover and the continued loss reflect a reduction in the number of Work For Hire projects undertaken in 2024, and the absence of new game releases generating royalties during the year.
By the end of 2024, Supermassive Games employed 214 staff at its two Guildford-based studios.
The group comprises Supermassive Games Limited as the parent, Supermassive Games 1 Limited, Supermassive Games 2 Limited and Supermassive Games 3 Limited as production and development subsidiaries and Starshape Games Limited which operates as a digital asset production and licensing company.
The studio continues to invest in its own intellectual property (including the Dark Pictures series of games) as well as work on projects on a ‘Work for Hire’ basis for leading publishers.
Following a detailed review of the business, the difficult decision was made in early 2024 to cease a number of self-funded development projects and enter a collective consultation period with staff, with a view to reducing headcount in the company. The company consequently made 81 staff redundant in April 2024. At the same time the company restructured the organisation, and finalised changes to the senior management team, concluding a six-month period of change.
Subsequent to the reporting date, during July 2025, the group initiated a further consultation and restructure process, which is expected to result in the reduction of approximately 36 roles. This initiative forms part of the group’s continued efforts to align its cost base with strategic priorities. At the date of approval of these financial statements, the consultation process remains ongoing.
Whilst these decisions and events resulted in short-term turbulence for the company, it is believed that the focus on a smaller number of projects, a reduction in the overall cost base and a more efficient structure will enable the company to grow sustainably in the years ahead, and better weather the continuing headwinds facing the industry.
The application of the Video Games Tax Relief and its replacement the Video Games Expenditure Credit continues to make a significant contribution to sources of development income and will have a positive future influence over the appetite for placing development work in the UK. The tax reliefs enable the studio to continue to be able to invest in game titles, senior and technical staff, and new processes which enhance its innovation capability and productivity.
Key performance indicators - financial and non-financial
Turnover for the year was £16.3m (2023: £21.2m) and the loss for the year was £15.3m (2023 loss: £17.1m). The reduction in turnover and the continued loss reflect a reduction in the number of Work For Hire projects undertaken in 2024, and the absence of new game releases generating royalties during the year.
By the end of 2024, Supermassive Games employed 214 staff at its two Guildford-based studios.
The directors have assessed the group’s ability to continue as a going concern in light of the prevailing economic conditions, industry-wide challenges, and internal performance forecasts. This assessment included a detailed review of the group’s cash flow projections, updated monthly and aligned with the group’s long-term strategic resource planning.
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SUPERMASSIVE GAMES LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The video game development and publishing sector continues to experience a difficult trading environment, characterised by subdued consumer spending and evolving commercial strategies from key publishing partners. These market conditions have had a direct impact on the timing and availability of new work-for-hire opportunities, which remain limited. While this presents a significant challenge in the short term, the directors remain confident in the group’s medium- to long-term prospects, underpinned by the anticipated recovery of the industry and the group’s strong creative and technical capabilities. Nevertheless, significant risks do still exist and should be recognised here.
The key risks facing the group in the current environment include:
1. Sales reductions due to economic factors and restricted consumer spending
2. Shifts in strategy by major publishing partners
Economic factors and consumer Spending
The global economic environment continues to be challenging, with various factors impacting consumers' disposable income to spend on video games. However, the group continues to innovate, incorporating new gameplay elements into its forthcoming games to attract new players, and with its strong brand in the market and targeted marketing campaigns, the business is positive in achieving the expected level of sales. Management are continuously reviewing their cost base.
Partner strategy changes
Changes to third party publisher strategies carry a risk to the business, as they could lead to termination of Agreements. Whilst robust commercial agreements have protected rights to the greatest extent possible, the risk of termination is still present. The group is also impacted by delays to signing new work for hire agreements.
In light of the above, the directors maintain ongoing oversight of the group’s cost base and remain committed to taking appropriate measures to ensure continued financial discipline.
The directors have received written confirmation of continued financial support from the group’s ultimate commercial parent entity, Egmont International Holding A/S. Taking into account this support, the group’s existing cash resources, and its forecasts, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for at least twelve months from the date of approval of these financial statements.
Accordingly, the financial statements have been prepared on a going concern basis.
Section 172(1) statement
As required by Section 172 of the Companies Act 2006, the directors of Supermassive Games Limited present the following statement, describing how they have acted in a way they consider would most likely promote the success of the company for the benefit of its members as a whole, while having regard to the matters set out in Section 172(1)(a)-(f) of the Act.
a. Decision-making processes
In our decision-making processes, the Board has consistently taken into account the likely long-term consequences of decisions. The company only works with top-level publishing partners on its Work For Hire projects, ensuring the long-term reputation of the company is upheld. The decision in early 2024 to reduce the number of self-published projects and make a number staff redundant was made with the long-term stability and success of the company in mind.
Economic factors and consumer Spending
The global economic environment continues to be challenging, with various factors impacting consumers' disposable income to spend on video games. However, the group continues to innovate, incorporating new gameplay elements into its forthcoming games to attract new players, and with its strong brand in the market and targeted marketing campaigns, the business is positive in achieving the expected level of sales. Management are continuously reviewing their cost base.
Partner strategy changes
Changes to third party publisher strategies carry a risk to the business, as they could lead to termination of Agreements. Whilst robust commercial agreements have protected rights to the greatest extent possible, the risk of termination is still present. The group is also impacted by delays to signing new work for hire agreements.
In light of the above, the directors maintain ongoing oversight of the group’s cost base and remain committed to taking appropriate measures to ensure continued financial discipline.
The directors have received written confirmation of continued financial support from the group’s ultimate commercial parent entity, Egmont International Holding A/S. Taking into account this support, the group’s existing cash resources, and its forecasts, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for at least twelve months from the date of approval of these financial statements.
Accordingly, the financial statements have been prepared on a going concern basis.
Section 172(1) statement
As required by Section 172 of the Companies Act 2006, the directors of Supermassive Games Limited present the following statement, describing how they have acted in a way they consider would most likely promote the success of the company for the benefit of its members as a whole, while having regard to the matters set out in Section 172(1)(a)-(f) of the Act.
a. Decision-making processes
In our decision-making processes, the Board has consistently taken into account the likely long-term consequences of decisions. The company only works with top-level publishing partners on its Work For Hire projects, ensuring the long-term reputation of the company is upheld. The decision in early 2024 to reduce the number of self-published projects and make a number staff redundant was made with the long-term stability and success of the company in mind.
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SUPERMASSIVE GAMES LIMITED
GROUP STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
b. Considering the interests of our employees
The Board acknowledges that our employees are fundamental to the long-term success of the company. During the financial year, we conducted multiple employee engagement surveys, utilised a confidential employee voice platform, and held numerous open-door sessions with senior leadership, which provide staff multiple forums in which they can share feedback, concerns or ideas with the company. Additionally, we have continued working to improve our studio-wide training resources for staff to use in aid of personal and professional development.
c. Fostering business relationships with suppliers, customers and others
We have maintained strong relationships with our key stakeholders, including suppliers, customers, and business partners. The company continually works to build relationships with Publishers and all suppliers, to ensure they want to work with us on a repeat basis. We are developing communities through social media platforms, which is helping to grow the overall Supermassive Games brand with customers.
d. Impact on the community and the environment
The Board is committed to ensuring that the company operates responsibly within the communities in which we are based and to minimizing our environmental footprint. We continue our work to support initiatives around educational outreach and promoting the industry. We have also taken steps to reduce our carbon footprint by reducing business travel where possible and considering alternative suppliers to secure more environmentally friendly packaging.
e. Maintaining a reputation for high standards of business conduct
Maintaining our reputation for high standards of business conduct is critical to our ongoing success. Throughout the year, we have complied with our responsibilities to report on Gender Pay Gap and Modern Day Slavery, strengthened our policies and training around GDPR and Cyber Security, and reviewed wider policies around business ethics such as bullying & harassment.
f. Acting fairly between members
The Board is committed to acting fairly between all members of the company. The ultimate controlling party of the company is Egmont Fonden, and the Board makes all decisions to enhance the reputation and long-term value of that entity.
Looking forward
The Board remains focused on promoting the long-term success of Supermassive Games Limited. As we move forward, we will continue to consider the impact of our decisions on all stakeholders, ensuring that our operations contribute positively to the broader community and environment while delivering sustainable value to our shareholders.
The Board acknowledges that our employees are fundamental to the long-term success of the company. During the financial year, we conducted multiple employee engagement surveys, utilised a confidential employee voice platform, and held numerous open-door sessions with senior leadership, which provide staff multiple forums in which they can share feedback, concerns or ideas with the company. Additionally, we have continued working to improve our studio-wide training resources for staff to use in aid of personal and professional development.
c. Fostering business relationships with suppliers, customers and others
We have maintained strong relationships with our key stakeholders, including suppliers, customers, and business partners. The company continually works to build relationships with Publishers and all suppliers, to ensure they want to work with us on a repeat basis. We are developing communities through social media platforms, which is helping to grow the overall Supermassive Games brand with customers.
d. Impact on the community and the environment
The Board is committed to ensuring that the company operates responsibly within the communities in which we are based and to minimizing our environmental footprint. We continue our work to support initiatives around educational outreach and promoting the industry. We have also taken steps to reduce our carbon footprint by reducing business travel where possible and considering alternative suppliers to secure more environmentally friendly packaging.
e. Maintaining a reputation for high standards of business conduct
Maintaining our reputation for high standards of business conduct is critical to our ongoing success. Throughout the year, we have complied with our responsibilities to report on Gender Pay Gap and Modern Day Slavery, strengthened our policies and training around GDPR and Cyber Security, and reviewed wider policies around business ethics such as bullying & harassment.
f. Acting fairly between members
The Board is committed to acting fairly between all members of the company. The ultimate controlling party of the company is Egmont Fonden, and the Board makes all decisions to enhance the reputation and long-term value of that entity.
Looking forward
The Board remains focused on promoting the long-term success of Supermassive Games Limited. As we move forward, we will continue to consider the impact of our decisions on all stakeholders, ensuring that our operations contribute positively to the broader community and environment while delivering sustainable value to our shareholders.
This report was approved by the board and signed on its behalf.
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SUPERMASSIVE GAMES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present their report and the financial statements for the year ended 31 December 2024.
The directors are responsible for preparing the group strategic report, the directors' report and the consolidated financial statements in accordance with applicable law and regulations.
In preparing these financial statements, the directors are required to:
∙select suitable accounting policies for the group's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
As a UK-based video game developer, the group is able to take advantage of both the Video Games Tax Relief scheme and it’s successor, the Video Games Expenditure Credit schemes. This positions the group well to compete globally as a cost-effective development centre.
Employee involvement
The group's policy is to consult and discuss with employees about matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins, company meetings and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
Employee involvement
The group's policy is to consult and discuss with employees about matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins, company meetings and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
The loss for the year, after taxation, amounted to £15,287,454 (2023: £17,077,210).
No dividends will be distributed for the year ended 31 December 2024 (2023: £Nil).
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SUPERMASSIVE GAMES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors who served during the year were:
The company's operations expose it to a variety of risks that include credit risk, liquidity risk and interest rate risk.
Liquidity risk
The group's cash flow is regularly monitored. In the short term liquidity risk is managed by utilising prearranged credit facilities. Liquidity risk is also managed by monitoring outstanding debtors and ensuring publishers pay milestone payments and royalties within the agreed credit terms. The business uses both short- and longer-term cash flow projections to ensure that it can appropriately manage expected short-falls in cash balances.
Credit risk
Credit risk arises primarily from credit exposures to publishers, including outstanding milestone and royalty invoices. Exposure to credit risk arising from cash and cash equivalents, deposits with banks and amounts with other financial institutions is limited to daily working capital requirements. The group assesses the credit quality of customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal and external ratings. Outstanding receivables are frequently monitored and credit terms strictly controlled.
Interest rate risk
Supermassive Games Limited has £17.5m (2023: £13.7m) of intercompany debt at the year end in the form of a revolving credit facility. An element of the interest charged on this debt is based on the LIBOR rate. The group has no other interest-bearing borrowings therefore interest rate risk is considered to be low.
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Tax credits
As a UK-based Video game developer, the group is able to take advantage of the Video Games Development Tax Credit scheme, which became effective in April 2014. This positions the group well to compete globally as a cost effective development centre.
Liquidity risk
The group's cash flow is regularly monitored. In the short term liquidity risk is managed by utilising prearranged credit facilities. Liquidity risk is also managed by monitoring outstanding debtors and ensuring publishers pay milestone payments and royalties within the agreed credit terms. The business uses both short- and longer-term cash flow projections to ensure that it can appropriately manage expected short-falls in cash balances.
Credit risk
Credit risk arises primarily from credit exposures to publishers, including outstanding milestone and royalty invoices. Exposure to credit risk arising from cash and cash equivalents, deposits with banks and amounts with other financial institutions is limited to daily working capital requirements. The group assesses the credit quality of customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal and external ratings. Outstanding receivables are frequently monitored and credit terms strictly controlled.
Interest rate risk
Supermassive Games Limited has £17.5m (2023: £13.7m) of intercompany debt at the year end in the form of a revolving credit facility. An element of the interest charged on this debt is based on the LIBOR rate. The group has no other interest-bearing borrowings therefore interest rate risk is considered to be low.
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the group continues and that the appropriate training is arranged. It is the policy of the group that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Tax credits
As a UK-based Video game developer, the group is able to take advantage of the Video Games Development Tax Credit scheme, which became effective in April 2014. This positions the group well to compete globally as a cost effective development centre.
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SUPERMASSIVE GAMES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Employee involvement
The group's policy is to consult and discuss with employees, in staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
The group's policy is to consult and discuss with employees, in staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
Streamlined energy and carbon reporting
Qualification and reporting methodology
The methodology used in the calculation of these disclosures was based on the HM Government Environmental Reporting Guidelines 2019 and the Greenhouse Gas Reporting conversion factors of 2024.
Intensity measurement
The intensity measurement ratio is total gross emissions in metric tonnes CO2e per average employee headcount.
Measures taken to improve energy efficiency
Electricity provision for Ranger House is on a green tariff (i.e. electricity from renewable sources) from Smartest Energy. Electricity provision for 65 Woodbridge Road was on a green tariff (i.e. electricity from renewable sources) from Smartest Energy between January and June, and after that on a standard tariff. We are intending to return to a green tariff from June 2025. 65 Woodbridge Road also utilises ground source heat pumps to reduce the electricity requirements for heating the building.
The company has chosen in accordance with section 414C(11) of the Companies Act 2006 (strategic report and director's report) Regulations 2013 to set out in the company's strategic report information required by the Large and Medium-Sized Companies and Groups (Accounts and Reports) Regulations 2008 Schedule 7 to be contained in the director's report.
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SUPERMASSIVE GAMES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
In July 2025, Supermassive Games initiated a further reorganisation plan, which included entering into a consultation period. The proposed restructure is expected to result in the reduction of approximately 36 roles. This decision forms part of the group’s continued efforts to align its cost base with strategic priorities.
The auditors, Cooper Parry Group Limited, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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SUPERMASSIVE GAMES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SUPERMASSIVE GAMES LIMITED
We have audited the financial statements of Supermassive Games Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024, which comprise the consolidated profit and loss account, the group and company balance sheet, the group and company statement of changes in equity, the consolidated statement of cash flows, the consolidated analysis of net debt and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's or the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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SUPERMASSIVE GAMES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SUPERMASSIVE GAMES LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the group strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the group strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the group strategic report and the directors' report .
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these group financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.
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SUPERMASSIVE GAMES LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SUPERMASSIVE GAMES LIMITED (CONTINUED)
We gained an understanding of the legal and regulatory framework applicable to the company and group and the industry in which it operates, and considered the risk of acts by the company and group that were contrary to applicable laws and regulations, including fraud. We discussed with the directors the policies and procedures in place regarding compliance with laws and regulations. We discussed amongst the audit team the identified laws and regulations, and remained alert to any indications of non-compliance.
During the audit we focussed on laws and regulations which could reasonably be expected to give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation.
Our procedures in relation to fraud, included but were not limited to: inquires of management whether they have any knowledge of any actual, suspected or alleged fraud, and discussions amongst the audit team regarding risk of fraud such as opportunities for fraudulent manipulation of financial statements. We determined that the principal risks related to posting manual journal entries to manipulate financial performance and management bias through judgements in accounting estimates and challenged the assumptions and judgements made by management in its significant accounting estimates. We also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud. Our tests included agreeing the financial statement disclosures to underlying supporting documentation.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
During the audit we focussed on laws and regulations which could reasonably be expected to give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation.
Our procedures in relation to fraud, included but were not limited to: inquires of management whether they have any knowledge of any actual, suspected or alleged fraud, and discussions amongst the audit team regarding risk of fraud such as opportunities for fraudulent manipulation of financial statements. We determined that the principal risks related to posting manual journal entries to manipulate financial performance and management bias through judgements in accounting estimates and challenged the assumptions and judgements made by management in its significant accounting estimates. We also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud. Our tests included agreeing the financial statement disclosures to underlying supporting documentation.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Statutory Auditor
New Derwent House
69-73 Theobalds Road
London
WC1X 8TA
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SUPERMASSIVE GAMES LIMITED
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2024
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SUPERMASSIVE GAMES LIMITED
REGISTERED NUMBER: 06096443
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 33 form part of these financial statements.
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SUPERMASSIVE GAMES LIMITED
REGISTERED NUMBER: 06096443
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 17 to 33 form part of these financial statements.
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SUPERMASSIVE GAMES LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
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SUPERMASSIVE GAMES LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
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SUPERMASSIVE GAMES LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
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SUPERMASSIVE GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Supermassive Games Limited is a private company, limited by shares, registered in England and Wales. The company's registered number and registered office address can be found on the company information page.
2.Accounting policies
These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest pound.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
∙Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instrument Issues': Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in the consolidated profit and loss account and in other comprehensive income; and
∙Section 33 'Related Party Disclosures': Compensation for key management personnel.
The following principal accounting policies have been applied:
In the parent company financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill.
The consolidated financial statements incorporate those of Supermassive Games Limited and all of its subsidiaries (i.e. entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits).
All financial statements are made up to 31 December 2024. All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
The directors consider that in order to show the net cash movement in debtors and creditors the foreign exchange movement between the prior year and current year should be removed from the brought forward balances when analysing the cash flow movements.
The consolidated financial statements incorporate those of Supermassive Games Limited and all of its subsidiaries (i.e. entities that the group controls through its power to govern the financial and operating policies so as to obtain economic benefits).
All financial statements are made up to 31 December 2024. All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
The directors consider that in order to show the net cash movement in debtors and creditors the foreign exchange movement between the prior year and current year should be removed from the brought forward balances when analysing the cash flow movements.
Page 17
SUPERMASSIVE GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
The directors have assessed the group’s ability to continue as a going concern in light of the prevailing economic conditions, industry-wide challenges, and internal performance forecasts. This assessment included a detailed review of the group’s cash flow projections, updated monthly and aligned with the group’s long-term strategic resource planning.
The video game development and publishing sector continues to experience a difficult trading environment, characterised by subdued consumer spending and evolving commercial strategies from key publishing partners. These market conditions have had a direct impact on the timing and availability of new work-for-hire opportunities, which remain limited. While this presents a significant challenge in the short term, the directors remain confident in the group’s medium- to long-term prospects, underpinned by the anticipated recovery of the industry and the group’s strong creative and technical capabilities. Nevertheless, significant risks do still exist and should be recognised here.
The key risks facing the group in the current environment include:
1. Sales reductions due to economic factors and restricted consumer spending
2. Shifts in strategy by major publishing partners
Economic factors and consumer Spending
The global economic environment continues to be challenging, with various factors impacting consumers' disposable income to spend on video games. However, the group continues to innovate, incorporating new gameplay elements into its forthcoming games to attract new players, and with its strong brand in the market and targeted marketing campaigns, the business is positive in achieving the expected level of sales. Management are continuously reviewing their cost base.
Partner strategy changes
Economic factors and consumer Spending
The global economic environment continues to be challenging, with various factors impacting consumers' disposable income to spend on video games. However, the group continues to innovate, incorporating new gameplay elements into its forthcoming games to attract new players, and with its strong brand in the market and targeted marketing campaigns, the business is positive in achieving the expected level of sales. Management are continuously reviewing their cost base.
Partner strategy changes
Changes to third party publisher strategies carry a risk to the business, as they could lead to termination of Agreements. Whilst robust commercial agreements have protected rights to the greatest extent possible, the risk of termination is still present. The group is also impacted by delays to signing new work for hire agreements.
In light of the above, the directors maintain ongoing oversight of the group’s cost base and remain committed to taking appropriate measures to ensure continued financial discipline.
The directors have received written confirmation of continued financial support from the group’s ultimate commercial parent entity, Egmont International Holding A/S. Taking into account this support, the group’s existing cash resources, and its forecasts, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for at least twelve months from the date of approval of these financial statements.
Accordingly, the financial statements have been prepared on a going concern basis.
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SUPERMASSIVE GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Royalties are recognised on an accruals basis in accordance with the substance of the relevant agreement.
Royalty income is based upon a percentage of turnover of specific products within the licensee's portfolio. Income is recognised within the corresponding period within which the licensee's turnover was generated where this information is available. In the absence of turnover information from a licensor a best estimate is used.
Royalty income is based upon a percentage of turnover of specific products within the licensee's portfolio. Income is recognised within the corresponding period within which the licensee's turnover was generated where this information is available. In the absence of turnover information from a licensor a best estimate is used.
The Video Games Tax Relief (VGTR) and Video Games Expenditure Credit (VGEC) are recognised on an accruals basis where there is a reasonable expectation that the balance will be recovered. The income is generated through government tax incentives specific to the video games industry and does not relate to ordinary trading income. On this basis the income is recognised as 'other operating income'.
Page 19
SUPERMASSIVE GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated profit and loss account except when deferred in other comprehensive income as qualifying cash flow hedges.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the consolidated profit and loss account except when deferred in other comprehensive income as qualifying cash flow hedges.
Interest payable and similar expenses are charged to the consolidated profit and loss account over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount.
Interest receivable and similar income is recognised in the consolidated profit and loss account using the effective interest method.
The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme are charged to the consolidated profit and loss account in the period to which they relate.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
The estimated useful lives range as follows:
Page 20
SUPERMASSIVE GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Capitalised development costs correspond to the costs incurred in the development of new games or software projects to the extent that the company has determined that:
1. the project is technically and commercially feasible;
2. the project is clearly defined and related expenditure is separately identifiable; and
3. current and future costs are expected to be exceeded by future earnings.
Development costs will include payroll, outsourcing, direct costs and other relevant expenses relating to the project. Deferred development expenditure for each product is reviewed at the end of each accounting period and where the circumstances which have justified the deferral of the expenditure, as set out above, no longer apply, or are considered doubtful, an impairment provision is made. Where applicable, capitalised development expenditure is presented net of VGTR and VGEC, to the extent that the relief is directly attributable to qualifying projects.
Research expenditure is written off in the year in which it is incurred. If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
1. the project is technically and commercially feasible;
2. the project is clearly defined and related expenditure is separately identifiable; and
3. current and future costs are expected to be exceeded by future earnings.
Development costs will include payroll, outsourcing, direct costs and other relevant expenses relating to the project. Deferred development expenditure for each product is reviewed at the end of each accounting period and where the circumstances which have justified the deferral of the expenditure, as set out above, no longer apply, or are considered doubtful, an impairment provision is made. Where applicable, capitalised development expenditure is presented net of VGTR and VGEC, to the extent that the relief is directly attributable to qualifying projects.
Research expenditure is written off in the year in which it is incurred. If it is not possible to distinguish between the research phase and the development phase of an internal project, the expenditure is treated as if it were all incurred in the research phase only.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Depreciation is provided on the following basis:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the consolidated profit and loss account.
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SUPERMASSIVE GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Assets that are subject to depreciation or amortisation are assessed at each balance sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each balance sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
Assets that are subject to depreciation or amortisation are assessed at each balance sheet date to determine whether there is any indication that the assets are impaired. Where there is any indication that an asset may be impaired, the carrying value of the asset (or cash-generating unit to which the asset has been allocated) is tested for impairment. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's (or CGU's) fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (CGUs). Non-financial assets that have been previously impaired are reviewed at each balance sheet date to assess whether there is any indication that the impairment losses recognised in prior periods may no longer exist or may have decreased.
In the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
Financial instruments are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument.
Basic financial assets
Basic financial assets, which include trade and other debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are classified as recoverable in under one year and subsequently carried at cost and impaired as required. Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including trade and other creditors, are classified as payable within one year are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at cost less discounts, if required.
Basic financial assets
Basic financial assets, which include trade and other debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are classified as recoverable in under one year and subsequently carried at cost and impaired as required. Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including trade and other creditors, are classified as payable within one year are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at cost less discounts, if required.
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SUPERMASSIVE GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
The items in the financial statements where these judgements and estimates have been made include:
Project stage of completion
Project completion is assessed based on the total costs incurred to date as a percentage of the total costs which are anticipated over the life of the project. Revenue received on projects is deferred or accrued in line with these calculations which the board deem is a more accurate reflection of the projects stage of completion.
Amortisation of development costs
The board have determined to amortise development costs over a finite period, as detailed in the Intangible assets accounting policy, which is deemed to be appropriate in line with the the forecasts prepared for the respective games.
Provision for bad debts
The group assesses trade receivables at each reporting date and recognises a bad debt provision for amounts considered irrecoverable. The provision is based on customer credit risk, payment history, ongoing disputes, and market conditions. As at the year-end, specific provisions have been made for overdue or disputed balances, considering ongoing negotiations and the likelihood of recovery. The provision is reviewed regularly and updated based on the latest available information. As at the year-end, the board deem the provision to be adequate and no further provision is required.
Provision for dilapidations
The group recognises a dilapidation provision for leased properties where it has a legal or constructive obligation to restore the premises to their original condition upon exit. The provision is estimated based on the expected costs required to meet these obligations.
The group reviews this estimate periodically, considering any updated cost assessments, lease terms, and changes in market conditions that may impact the required restoration costs. Adjustments to the provision are made as necessary to reflect the most current and reliable information.
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SUPERMASSIVE GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Analysis of turnover by country of destination:
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SUPERMASSIVE GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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SUPERMASSIVE GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 26
SUPERMASSIVE GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
12.Taxation (continued)
There were no factors that may affect the future tax changes.
The company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented its own Profit and loss account in these financial statements. The loss after tax of the parent company for the year was £22,641,238 (2023:loss £27,757,254 ).
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SUPERMASSIVE GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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SUPERMASSIVE GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
14.Intangible assets (continued)
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SUPERMASSIVE GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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Page 30
SUPERMASSIVE GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 31
SUPERMASSIVE GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Share premium account
Capital redemption reserve
Profit and loss account
Page 32
SUPERMASSIVE GAMES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
The group operates a defined contribution scheme. The pension cost charge represents contributions payable by the group to the fund and amounted to £466,900 (2023: £510,073). Contributions totalling £Nil (2023: £Nil) were payable to the fund at the statement of financial position date.
The ultimate parent undertaking and controlling party is Egmont Fonden, a company incorporated in Denmark, whose registered office is Vognmagergade 11, 1148 Copenhagen K, Denmark.
Page 33