Playway investment thesis

PlayWay $PLW.WA

Introduction to PlayWay

In this new thesis we bring another idea from our beloved country Poland. This company is PlayWay SA. This is a group of companies founded in 2011 and based in Warsaw (Poland). Here we have one of the largest companies in Poland creating video games for the most popular hardware platforms like PC, PS4, Xbox1, iOS or Android.

The company boasts global sales successes like the Car Mechanic Simulator series, House Flipper, Thief Simulator, Uboat and other ones that we will list later. But before diving into the company let’s talk about two key components of this thesis: Making business in a good sector (Gaming) & in a good country (Poland)

The gaming market

Whenever I publish an investment thesis, I like to dedicate one of the first chapters to explain some details of the industry where the company operates, We need to know how the industry is, if it’s a growing or a declining one, which are the main players, and what is the expected growth for the coming years.

In this thesis, when we talk about gaming, we will focus mainly in the fee-based video games distributed over the internet. This definition includes the downloads of full versions for gaming consoles or PCs, mobile games for smartphones and tablet devices (paid app downloads and in-app-purchases), paid or free-to-play online games which can be either played directly in the internet browser or via clients that need to be installed (subscription-based or including in- game purchases) as well as subscription-based gaming networks such as Xbox Live Gold, PlayStation Plus or Nintendo Switch Online.

As you can imagine, the gaming sector is one of the most bursting industries of the moment, and will keep growing in the next years. The revenues in the Video Games segment is projected to reach US$365.10bn in 2023 and will keep growing until 2027 at a CAGR of more than 7% to reach a forecasted market volume of US$483bn by 2027 as shown in the graph below.

Gaming revenue by segment

As for the number of users, it is expected to reach 2780 million users by 2027. This year 2023 the user penetration is expected to be 32.8% and would reach 34.9% by 2027. The largest segment is Mobile Games with a market volume of US$315.90bn in 2023. In global comparison, most of the revenues will be generated in China (US$1067bn in 2023). The average revenue per user in the Video Games segment will reach US$145 in 2023.

It’s important to note that the Covid-19 pandemic has been a catalyst for the gaming industry. Many people getting bored during the lockdown turned out to burst this industry as the video games was one of the few ways to enjoy at home and escape also from the isolation that days playing with more people on line. “People were looking for ways to both entertain themselves and maintain their social connections,” says Bartosz Skwarczek, co-founder and CEO of, an online gaming marketplace.

A survey of European gamers suggested that 16% of them felt that gaming helped their mental health during lockdowns, especially those ones spending time on multiplayer genres feeling especially positive. As a consequence of this, the market expanded 26% between 2019 & 2021. Gaming companies are making since then huge amounts of money. For example, Nintendo’s Animal Crossing: New Horizons came out in March 2020 and sold 13.4 million units in its first six weeks, it turned out to be one of the best-selling Nintendo Switch games ever.

Gaming is part of the Entertainment industry, and is becoming more and more important on it. In 2017 gaming was only 6,1% of global spending in the entertainment and media sector, but by 2026 they it is projected to be a 11% share of total entertainment industry. As PWC report states, gaming is becoming more and more mainstream.

Currently the 50% of revenues of gaming industry are done in USA and China. But future growth could come from less wealthy countries with growing populations.

In Spain We say that an image is worth more than 1.000 words, so please have a look to the following one:

The rise of gaming revenue
Biggest gaming companies

We can see the history of the gaming industry from the early 70’s with the first commercial Arcade game named “Pong” till nowadays with such successful games like the Fortnite.

After the Pong, other hits in the industry followed in the 70’s and 80’s in the Arcade and Console segments like Space Invaders, Pac-Man or Super Mario Bros. It’s curious to note a crash in the gaming market in 1983-85 due to market oversaturation and still early videogames like E.T. The Extra-Terrestrial with high Budget and poor quality.

But then, big hits burst like the ones of Nintendo (NES, Gameboy, SuperNES), Sega with the Mega Drive. We enter into the 90’s, with Handheld & PC earning share in the gaming market. Sony released the Playstation 1 in 1994 and turned out to be a complete success. Microsoft would follow in 2001 with the Xbox. But in the early 2000’s the mobile segment appeared in the gaming industry thanks to Nokia (the oldests in the room can remember the “Snake” game), and 20 years later it’s the biggest player on the market, but not by Nokia. In the last years also new guests are coming to the room like the VR and Cloud, which will gain importance in the coming years.

Now in the 2020’s the big players are very well known: Sony, Microsoft, Nintendo, Tencent, Activision, etc

There are around 220 listed gaming companies, with market cap from, $1M to $1T. This is a very fragmented sector, and we detect that there are some small gaming companies that can give us very good opportunities for investing in excellent business, specifically in Poland with very interesting companies like CD Project, PlayWay or Bloober.

Investing in Poland

As already mentioned in the previous chapter, there is an increasing number of gaming companies in Poland, and it’s worth to dedicate some lines to know a little more about the country.

We are in a country that once took off the yoke of the Soviet occupation, has been growing in the last 30 years at an annual rate of 4.5% per year, and has an unemployment rate of 3% and a GDP per capita of €15,060. Since the integration of Poland in the EU, the GDP has grown at an average rate of 4%.

In addition, Poland is the country that is growing the most in all of Europe. Since 2019 it has already grown by 8.7%, leaving the Covid crisis behind. In 2022 it is estimated that Poland will grow at 4,9%. At this moment, Poland is the 10th European economy, (6th in the European Union). And the forecasts indicate that growth in the coming years will also be spectacular, well above its neighboring countries, which have been growing a lot in the last 30 years but not at the rate of Poland.

Poland entered the European Union in 2004 and has been one of the great beneficiaries of aid from European funds.

As we can see, we are in a country with a growing economy, it is the third country in Europe in foreign direct investment. Poland’s economy is heavily dependent on Germany, with $54.5 billion in exports to Germany. The country is undergoing a series of conservative policy changes and has a legal framework that is still being developed. Poland is also experiencing increases in investment, GDP growth, increases in exports, and economic expansion.

As for taxes, they have a 19% corporate tax (below the EU average) and a maximum personal income tax of 39%.

Regarding the country’s competitiveness, we are in a country with a low average salary (€833) compared to the European Union average (€2,194), which makes it a very competitive country compared to its richer European neighbours, and with a currency (Zloty) that has hardly depreciated in the last 20 years with the Euro or the Dollar.

At the stock market level, within the WSE the main reference index is the WIG with the 300 listed companies, and which in 2022 fell by 15%. At the same time, we have the WIG20 index with the highest-listed companies and which in 2022 left 21%.

But if we do some research on listed companies in Poland, we find companies with very good businesses, such as some well-known ones such as Dino Polska (supermarkets), Autopartner (car parts), Mo-Bruk (waste management) or Livechat & Spyrosoft (software). They are companies that have given great returns on the stock market and that are listed at a discount (some more than others) compared to their foreign peers. And that is how we find PlayWay, which seems to be a very good opportunity in this market.


Investing in Poland
Investing in Poland 2

Inside Playway

Now let’s go to our company. PlayWay SA consists of a group of companies with an important level of freedom and cooperation between teams, but keeping the necessary quality control and with full production, marketing and publishing support.PlayWay cooperates with experienced, large development studios and creators well-known in the industry, but also has been incubating young beginning teams during the last years.

The PlayWay SA capital group, includes the Company and more than 70 subsidiaries like the following ones, owned totally or partially by the Group and some of them listed also in the WSE:

Playway video games stake
Playway 70 development teams

To summarize, we can say that Playway are around 70 development teams in one company

PlayWay was founded by its current CEO Christopher Kostowski to build games for PC, Xbox, Playstation, Nintendo Switch, Android and iOS. Since then they have produced and released more than 70 games, and they have plans to release more than 100 games in the next years. The mother company currently has 43 employees and the headquarters are located in Warsaw (Poland).

But is there any better way to explain a Gaming company than showing the most famous games released by them? So let’s go with it with a brief description of these games and links to youtube videos showing these games.

Car Mechanic Simulator

Car Mechanic Simulator is the best-selling game of PlayWay, only last December 2022 a total of 10.000 units were sold. This is a game developed by RedDot and published by PlayWay.

In this game you can run your own car service business. It’s a very realistic simulator with more than 4000 car parts and 72 different cars to work with. You can offer a wide variety of services to your clients (repair, customize, tune up and repaint cars). You can also invest in tools and expand your garage to increase the services you offer. Each service is represented by a minigame; succeeding in the game means completing the task at hand. You can also collect cars by going to auctions and bidding on the vehicles on offer. You can even go scrap hunting and may find a hidden diamond that you can recover easily. In addition, you can also play missions, each with their own set of objectives to accomplish, and you can also bring your restored cars to the circuits and test them in a time trial.

In order to develop this game, Playway and its development teams had the cooperation of some car companies like Mercedes, Bentley, Jeep or Maserati among others.

House Flipper

House Flipper is other of the best games released by PlayWay, in colaborarion with developer Empyrean. In this game you will run your own renovation company.

You will become an interior & house designer and start your own business. You can carry out orders, renovate, decorate houses, and sell them with profit afterwards. More than 2 million copies of this game have been sold only in PC version. A new version “House Flipper 2” will be released in Q3 2023.

Thief Simulator

Thief Simulator is another excellent game developed by Noble Muffins and published by PlayWay. In this case you will become a thief and will have to steal in the neighbourhoods of this sandbox that you can roam freely.

You will need to observe your target and gather information that will help you in your robbery. In addition, You will get to accept the challenge and steal from the houses with the best surveillance. You can also buy state-of-the-art robbery equipment and learn new thief tricks. To succeed in the game you will need to find and steal as many valuables as you can in the shortest time possible.


UBOAT is a World War II submarine simulator released in 2019. It is a survival sandbox with crew management mechanics in which the main theme is the life of German sailors

The submarine is your home and you can control the crew in order to control the boat. You look after their physical and mental health, because if the sailors are hungry, tired and their spirit is low, there’s no chance of winning anything.

Gold Rush

In Gold Rush you will become a gold miner in a highg fidelity sumulator. You will need to work hard, dig deep and explore the world and if you succeed you will become the wealthiest person in Alaska. You can use a variety of highly-detailed machines which are fully operable to find as much gold as you can.

Gold Rush allows you to discover the tough experience of gold mining. You start with just an excavator, but with passing seasons, you will progress and become wealthy. In Gold Rush they have created a big, detailed world with four unique gold mining claims. On each, you will find a fully deformable terrain.

Ultimate Fishing simulator

Ultimate Fishing Simulator is another success of Playway, published Ultimate Games (one of the companies of the group), and with the development of Mastercode and SilentBear. Last August the 2nd edition of this game was released.

This a game for fishing fanatics. This is a simulator with six locations where you can catch more than 60 species of fish, including the giant tiger shark.

The catalog of games published by PlayWay is very wide, with more than 70 games released in the last years, some of them with several updates like Car Mechanic Simulator due to its huge success.

But who are the main clients of PlayWay? Nearly half of the sales are done through the Steam platform (48,2%), followed by Microsoft (17,5%), Sony (9,3%), Nintendo (4,1%), META (2,7%) and others.

In terms of geography, 35,2% of the sales are for USA clients, followed by Germany (9,7%), China (6,3%) and UK (5,7%).

Some of the most relevant events in the last months are the launch in May 2022 of the game “House Flipper Pets”, which was very well received by players and has exceeded 200,000 units sold to date. In addition, the release of “House Flipper” in the Xbox formula Game Pass in June 2022 and the launch of “Cooking Simulator” in July 2022 turned out to be important for PlayWay, as well as other smaller games in PlayWay’s catalogue with very good results with players and which contributed to the Group’s results.

Let’s dive into PlayWay’s numbers

Now it’s time to see the numbers of the Company. The PlayWay Group has been executing very well in the last years, making 47x both in revenues and net income since 2014, this give us a very good signal of the performance of this company in the last years and what they could be able to do in the future. Below you can see the numbers of the last years. In addition, last results reported (Q3-2022) showed a total revenues of 76,75M PLN (+14% YoY), EBIT of 51,08M PLN (+8,4% YoY, 66% margin) and net earnings of 53,55M PLN (+15% YoY).

Playway valuation

Apart from this incredible growth, their margins are quite excellent, with an EBIT margin of 66%, and a net income margin of 52%, very few companies and industries can show these level of margins. Other competitors of PlayWay have much lower margins (CD Projekt EBIT 40% & Net 33%, Bloober (EBIT 29% & Net 26%) or Embracer (EBIT -7,5% & Net -3,5%)

During 2020 the net income was incredibly high due to the sale of some stakes in subsidiary companies during H1-2020.

In terms of debt position, PlayWay is very well situated, with no debt, and net cash position of 225M PLN (47M EUR).

One of the best points of this thesis and this is the reason for showing it in the title of the thesis is the cash flows that the company generates with their business. The last 12 months PlayWay generated a free cash flow of 157M PLN (57,4% margin), with increasing margins in the last years. Compared to its peers, with much worse numbers, we can see that PlayWay is a cash machine.

If we have a look to the return ratios, we can see good numbers also here, with a ROIC of 33% and ROE of 37% (ratios of CD Projekt are ROIC 17% & ROE 15,7%)

So, as you can see, the numbers of PlayWay are excellent. The growth rate in this last year is not such high as previous ones as the 2020 & 2021 were very impacted by the lockdowns and the huge consumption of gaming products. It’s also importat to note that PlayWay is becoming bigger and bigger and it’s not easy to keep high growth rates forever, we will explain a little bit more in the valuation section.

Playway Management

As you know, one key part of an investment thesis is the management who runs the company, and which is essential for a good performance of the company and the stock.

Here in PlayWay, the story of the company is linked to its CEO & Founder Krzysztof Kostowski. He has been working in computer games industry for 25 years. From 2002 to 2011 he worked in the company Play sp, where He successfully led the incubation process of many small and medium-sized development teams. In 2011, he founded PlayWay SA. Kostowski is the author of the concept of the company’s flagship product: Car Mechanic Simulator, House Flipper and thirty other productions of the company.

Kostowski has been the responsible for the full process of creating most of the productions, starting from the concept of the game, through selecting the right team composition, and ending with the release of the game in global markets.

Kostowski has a stake of 40,9% in the PlayWay Group and has a symbolic annual salary of 104.000 PLN (22.000€). Here we have a CEO with skin in the game, big stake, low salary and therefore incentivized to deliver good results to the company and its shareholders. Kostowski is not only the Chairman of the Management Board of PlayWay, he is also the Chairman of the Supervisory Boards of Play2Chill and Detalion Games, as well as member of the Supervisory Boards of Ultimate Games, Creative Forge Games other five more companies.

Other key person of the Management is Kuba Trzebinski, the VicePresident of PlayWay. Trzebinski has been executing as VicePresident since 2016. He is also the COO and CMO of the group, and he is responsible, among others, for the presence of global brands in the games from the Car Mechanic Simulator and Farm Expert series, producer care over the games created by the company, establishing contacts and relations with the media, discovering new development teams, business contacts. Trzebinski is also author of the concept of many games, including Cooking Simulator.

In addition, we have another key component in the Supervisory Board and the other major shareholder of the company: Michal Marcin Kojecki.

He is a private entrepreneur with nearly 30 years of experience. Kojecki has been a stock market investor since the beginning of the capital market in Poland.

Member of the management board of capital companies. For 10 years he was the managing director of a foreign investment company in Poland. Over the last 5 years, he has held functions in the administrative, management or supervisory bodies of the following companies: Caterham Financial Management LTD, Cormostan Trading Limited, Euro House Development, Radzymińska Centrum, Against Gravity Sp., and Member of the Supervisory Board of Creativeforge Games SA, a subsidiary of PlayWay. In PlayWay, Kojecki has a stake of another 40,9% of the company through ACRX Investment Ltd.


The main risks we have when in investing in PlayWay come from three sides:

  • The danger of a recession is still latent in 2023, I think it may occur but will be very short time and mild. The gaming industry has been a recession-proof one as it demonstrated in 2008, let’s see what happens in 2023 but the tailwinds of the sector remain strong, so I don’t expect big impact here.

  • Inflation of salaries of developers is still an issue but Playway keeps its advantage as their development teams are located in Poland

  • The Ukrainian war. This geographical risk must be considered due to the location of PlayWay In Poland, near to Russia and Ukraine.

  • A risk of acquisition by one of the big players of the sector is not neglilible, but I don’t find it realistic in the near term, as Kojecki & Kostowski have given no signs of wanting to sell the company or even any part of it.

Performance of PlayWay stock $PLW

PlayWay is listed in the Polish stock market WSE since October 2016 under ticker $PLW. Since then, the stock has revalued by a 738%.

The current market cap of PlayWay is 2.765M PLN (580M€), and is the 2nd biggest polish gaming company right after CD Projekt.

Today Friday 17th the stock closed at 419 PLN, with a YTD performance of +35%.

The stockholders find here a good stock to earn money through the stock revaluation if the company keeps delivering excellent results but also through dividends thanks to the dividend policy of PlayWay. They have been delivering an increasing dividends in the last years and resulted in a dividend in 2022% of 19,22 PLN per share (6,36%).

The free float in PlayWay is very low, only 18,2% as the 81,8% of the shares are in hands of the CEO Krzysztof Kostowski and the investor Michal Marcin Kojecki (ACRX Investments Ltd).

The daily volume traded in $PLW is around 2500 shares (210.000€). This is a good opportunity for retailers, as big funds find it difficult to enter here, only some small funds are in the shareholding.

Playway shareholders

Valuation and target Price

Right now, the PlayWay stock is trading at 419 PLN, which means a NTM PER 17,27 and an EV/Ebitda of 12,42. If we look back to its historical multiples in the last years, we can see that the average PER has been 22,74 and average EV/Ebita 14,10. Therefore, in terms of historical valuation we can consider $PLW as relatively cheap.

In addition, when we compare PlayWay with its peers, the multiples are in the average, or even in the lower part of the table. If we go to the upper part of the table and take CD Projekt, its PER is 39, with lower margins and return ratios. The same occurs if we compare PlayWay with 11Bit, another Polish gaming small cap, with PER 46 but lower margins and returns. These are very exigent ratios and I don’t see PlayWay reaching them. We can also compare PlayWay with Bloober, another polish gaming small cap. Bloober trades at similar multiples, but with lower margins and returns. Embracer is trading cheaper than Playway but with much worse numbers and even negative results in 2022. All this is enough to make me think that PlayWay at this valuation nearer to cheap than fair value.

Now regarding the target price, if we estimate a PER 20 (a bit lower than historical one), EBIT margin 60%, and an annual growth of 15% (Less than the last years, we take the conservative side), we have a PlayWay share price of 790 PLN in 2026. This means nearly double in 3 years.

If we apply here another valuation method like the discounted cash flows till 2026 at 10% discount rate we get a current valuation of 776 PLN, which means a revaluation of 85% from current stock value.


So, we have here a growing company delivering good products, in a growing market, in a growing country, with an excellent management with skin in the game, with better margins and returns than its peers, with an excellent cash flow generation, with a good dividend policy, and trading at a relatively cheap price. I consider PlayWay an excellent investment for the next years, and due to this I have recently started a position in the Company. But remember, due your own due diligence and make your own decisions.

I would like to thank to Carlos Mora for his support since I opened my substack and for encouraging me to participate in this Investment thesis competition, it’s have been a pleasure for me to introduce this Company and I hope that the community like it and the thesis reach a good position in the competition.

Author: @Gekko_TheGreat

This investment thesis participates in the Moram investment competition. If you want to vote for it, voting will be open for Moram’ subscribers from this Sunday evening (5th March 2023) to next Saturday.

Disclaimer: This thesis is only for educational purposes and does not constitute any investment advice

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