Investors in CD Projekt welcomed warmly the game developer’s new strategic plans, which include multiple ambitious new game projects, though some analysts are being more cautious.
The Polish game developer has ridden the fierce PR storm and public backlash that followed a calamitous 2020 launch of the buggy and at times barely playable Cyberpunk game – which at one point had to be withdrawn from stores and resulted in sweeping customer refunds.
Almost two-years of patches and updates later, the company wants to move forward with further ambitious plans.
Now the Witcher and Cyberpunk maker is planning to set up a new high calibre development studio in the United States, and, is working toward the launch of three so-called ‘triple A’ game titles – including a new Witcher title and Cyberpunk sequel. It also promised the addition of multiplayer modes which crucially add significantly to higher engagement times and in-game revenue opportunities.
In the stock market, CD Projekt shares climbed around 4% to trade at 113.60 Polish zlotys (PLN) per share.
Saxo bank analyst Peter Garnry, in a note, highlighted a 46% rise in the CD Projekt price since early September, despite disappointing first half financials.
“The market has been betting on good news from CD Projekt and with the stock price up 5% today extending on yesterday’s move it seems investors are buying into the long-term strategy. The past 18 months have been tough for the company as revenue has declined from PLN 2.1bn in 2020 to just PLN 796mn in the past 12 months,” Garnry said.
Analysts at Barclays, meanwhile, poured colder water onto the evident investor enthusiasm.
“We think that investors will struggle to believe in a busy slate between 2026 and 2033, having seen delays and a major disappointment from CD Projekt in the last few year,” Barclays’ analyst Nick Dempsey commented in a research note.
He said: “Our conclusion is that the more ambitious plans could add c.13% to cumulative revenue and slightly less to profit over 2023-2030. But we pretty much know that the cash costs required to build a new North American studio will be significant over the coming years.
“We think that the cash hit is certain and the plans for new games uncertain.”