Forever Entertainment Q3 2025: Strong Margins, Busy Release Slate and MegaPixel Merger Ahead

Introduction

Forever Entertainment S.A., a Gdynia-based publisher and producer focused on remakes and porting of video games, reported a robust third quarter of 2025. The company continues to lean on a diversified model that combines work-for-hire contracts, remake productions and traditional publishing, with a strong concentration on Nintendo Switch while actively expanding to PC, PlayStation and Xbox platforms.

Business model and operating profile

The core of Forever Entertainment’s activity remains publishing and production of games, particularly remakes, supported by work-for-hire contracts for leading global publishers. This model provides a mix of recurring, predictable cash flows from services alongside higher-margin but more volatile publishing revenues. The company also offers physical (boxed) editions and collector sets via the Forever Limited brand, which enhances monetisation of successful titles and strengthens relationships with engaged fans.

In the production area, the quarter confirmed three strategic pillars: work-for-hire services, remake production and publishing. Notably, the successful delivery of Donkey Kong Country Returns HD has already translated into further work-for-hire assignments, including a prototype contract with a top-tier global publisher, signalling rising recognition of the studio’s technical capabilities.

Q3 2025 results: revenue growth and stronger profitability

In Q3 2025, Forever Entertainment generated net revenue of 9.11 million PLN, an increase of around 29 percent year on year. Revenue from product sales alone reached approximately 8.9 million PLN, up about 45.5 percent versus the same quarter of 2024. For the first three quarters of 2025, net sales came in at 22.35 million PLN, around 8 percent below the prior-year period, largely due to the phasing of releases and lower contribution from back catalogue titles earlier in the year.

Operating costs rose to roughly 5.8 million PLN in Q3 2025, reflecting a higher scale of activity and the cost base required to support both new launches and ongoing projects. Despite this, profitability improved significantly thanks to the favourable revenue mix and strong results of recent releases and work-for-hire projects.

The company’s profit from sales in Q3 2025 amounted to about 2.9 million PLN, more than doubling year on year. EBITDA for the quarter reached roughly 2.85 million PLN, and net profit stood at approximately 2.35 million PLN, again more than doubling versus Q3 2024. For the full nine months, Forever Entertainment reported net profit of 6.83 million PLN, up about 33.6 percent compared with the same period of 2024, underscoring a clear improvement in profitability despite slightly lower cumulative revenue.

Margin profile and cost dynamics

The company’s margin profile in Q3 2025 stands out as a key highlight. EBITDA margin reached 31.3 percent, significantly higher than the roughly mid-teens level recorded in the prior-year quarter. Operating margin improved to around 30.6 percent from approximately 16.9 percent, while net margin rose to 25.8 percent from 11.6 percent a year earlier. These improvements reflect both stronger commercial performance of key titles and the growing contribution of stable work-for-hire revenues, which help absorb fixed costs.

Cost discipline remains an important factor. While expenses such as external services, payroll and social security continue to rise alongside business scale, the company benefits from a portfolio approach that spreads risk over multiple titles and platforms rather than depending on a single flagship project. This structure makes earnings less sensitive to the commercial outcome of any individual game.

Cash flows and balance sheet

The third quarter of 2025 also brought a meaningful improvement in cash generation. Net cash flow in Q3 2025 reached 2.09 million PLN, compared with a negative 0.85 million PLN in the same period of 2024. At 30 September 2025, the company held 2.15 million PLN in cash and cash equivalents.

At the balance sheet level, Forever Entertainment reported a year-on-year decrease in total assets to around 50.2 million PLN from approximately 56.0 million PLN. This decline is mainly the consequence of an accounting correction related to the valuation of long-term financial assets, specifically shareholdings in associated companies such as MegaPixel Studio, UF Games and Storm Trident. These assets should have been measured at cost since the 2023 policy change but had continued to be valued at fair value in earlier financial statements.

The correction reduced the carrying value of long-term financial assets and, on the equity side, was booked against retained earnings, with a corresponding adjustment to deferred tax. Importantly, this is a non-cash, accounting-only change that does not affect the company’s current liquidity, cash flows or the income statement for the period. Management explicitly notes that the adjustment has no impact on daily operations or the ability to finance ongoing projects.

Releases, pipeline and operating momentum

Q3 2025 was an active release period. Key launches included Front Mission 3: Remake on Nintendo Switch, THE HOUSE OF THE DEAD 2: Remake on Nintendo Switch and PC (Steam and GOG), and subsequent Q4 releases on PlayStation and Xbox platforms. The company also released titles such as Thief Simulator Master Mind Edition on Nintendo Switch and Rise Eterna 2 on Nintendo Switch, combining porting, co-production and publishing roles. These launches enriched the catalogue and supported revenue growth in the quarter.

In addition to released titles, the company maintains a broad pipeline of planned digital launches across Nintendo Switch, PC, PlayStation and Xbox, including games like Thief Simulator 2, Uboat and Haunted Memories: The Return, as well as projects without fixed dates such as Panzer Dragoon Zwei: Remake. The strategy is to publish a larger number of small and mid-sized titles rather than rely on a single high-budget production, thereby reducing earnings volatility and commercial risk.

Strategic initiatives and MegaPixel Studio merger

A major strategic step announced in the period is the planned merger with MegaPixel Studio S.A., a key development partner responsible for many of the company’s remakes. Under the agreed structure, MegaPixel’s entire assets will be transferred to Forever Entertainment in exchange for new series Q shares issued to MegaPixel shareholders. After the transaction, the new shares will represent a small minority stake in the enlarged capital, while Forever Entertainment will fully consolidate MegaPixel’s competencies and projects.

Management expects multiple synergies from the merger, including cost and administrative efficiencies, better coordination of production processes, enhanced knowledge transfer and improved quality control. The deal is also expected to increase the company’s scale and market visibility and support higher liquidity of its shares on the NewConnect market. Shareholders are scheduled to vote on the merger before the end of 2025.

Capital group and partnership network

Forever Entertainment sits at the centre of a broader ecosystem of specialised studios and partners. It fully controls Forever Seed Fund S.A., a vehicle focused on sourcing high-potential development teams and projects, and holds significant stakes in several other entities, including MegaPixel Studio, UF Games, TA Publishing, Highball Games, Storm Trident and others in Europe and Asia. These holdings provide access to a steady flow of content, porting opportunities and regional publishing channels, particularly in Japan and China.

The group structure is deliberately light: because the subsidiary Forever Seed Fund is not material at the consolidated level, the company uses a statutory exemption and does not prepare consolidated financial statements for the period. Instead, it provides selected financial data for the subsidiary to maintain transparency.

Risks and outlook

The main operational risks for Forever Entertainment stem from the cyclical nature of game sales, the reception of individual titles and the broader competitive environment in the mid-budget and remake segments. That said, the company’s model, which blends work-for-hire with publishing and focuses on multiple titles across platforms, reduces exposure to underperformance of any single project.

Externally, the company continues to monitor the impact of the war in Ukraine and associated sanctions on Russia and Belarus. Sales are routed through global platforms, and management currently assesses the direct financial impact of restricted markets as limited, though uncertainty remains elevated at the macro level.

Looking ahead, Forever Entertainment appears well positioned to benefit from its growing catalogue, the expansion of the Forever Limited physical and collector’s line, and the potential synergies from integrating MegaPixel Studio. Continued emphasis on work-for-hire contracts should support cash flow visibility, while the ongoing development of remakes and co-productions offers upside to both revenue and margins.

Conclusion

Q3 2025 confirms that Forever Entertainment is successfully balancing growth and risk in a challenging gaming market. Revenues accelerated, profitability and cash flows improved, and the company continued to expand its release pipeline while preparing a strategically important merger with MegaPixel Studio. Despite the one-off accounting correction of financial assets and a lower balance sheet total, the underlying business appears more scalable, better diversified and financially healthier than a year ago. For investors, the story increasingly revolves around execution of the release slate, the successful integration of MegaPixel and the company’s ability to maintain attractive margins as it scales its portfolio.

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