A massive drop in profit. CD Projekt held hostage by Sony

The results of the study for the first quarter of 2021 are significantly lower than analysts’ expectations. At a press conference, the board indicated that the situation should not improve until Cyberpunk 2077 returns to the Sony store.

The group’s consolidated net profit for the first quarter of 2021 amounted to PLN 32.5 million. It is 64.7 percent. lower than in the same period last year. It is also as much as 64 percent. analysts surveyed by PAP lower than the average forecast. The results are also far from consensus on the operating and EBITDA levels. The operating profit amounted to PLN 43.2 million (a decrease by 56% year on year), while the average of experts’ forecasts assumed almost PLN 98 million. In turn, EBITDA amounted to PLN 71.1 million – up 44 percent. below expectations.

The total value of cash increased and amounted to PLN 1.55 billion at the end of March 2021. Taking into account the liquid financial assets in the form of purchased treasury bonds, the group had financial reserves at the end of March in the amount of PLN 1.92 billion, i.e. 119 percent. higher than at the end of last year.

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The total value of sales revenues in the 1st quarter of 2021 amounted to PLN 197.6 million and was slightly higher than in the record-breaking 1st quarter of the previous year. The company emphasizes in the report that in 2020 sales were supported by restrictions on the pandemic, an increase in the recognition of the Witcher universe after the premiere of The Witcher series in December 2019 and revenues from the sale of “The Witcher 3: Wild Hunt” in the Nintendo Switch version, which premiered at the end of 2019.

“The above-mentioned factors supporting sales in the first quarter of 2020 lost their importance over 2020, which translated into a decrease in sales revenues for the Witcher family products this year with the simultaneous appearance of revenues from the sale of Cyberpunk 2077 – realized mainly as part of digital distribution on PC and Xbox consoles, ”reads the report.

Analysts, on average, expected slightly over PLN 238 million in revenues of the company in the first quarter of 2021 (i.e. revenues are 17% below the consensus).

In December 2020, “Cyberpunk 2077” debuted. Numerous bugs in the console version significantly reduced the sale of the game. They caused Sony to remove the digital version from PlayStation Store until further notice. Talks are still ongoing to bring her back to the store. The management board of the Polish studio does not want to declare when this will happen. In the first quarter, the company “repaired” the game and announced a new strategy for the coming years.

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– We intend to deliver on our promise to players in January. While we are seeing a significant improvement, a large part of the team is still working to ensure that players can get even more pleasure from playing Cyberpunk. At the same time, we are introducing the first internal changes related to the transformation of the studio. It is a long process, but we know that it is necessary so that we can effectively work on two AAA projects at the same time – declares Adam Kiciński, president of CD Projekt.

During the press conference, the head of the studio confirmed that apart from further updates to “Cyberpunk 2077” and free additions to the game, the company plans to release “Cyberpunk” and “Wiedźmina 3” in the second half of the year for the latest generation of consoles. He also confirmed that “The Witcher: Monster Slayer”, a mobile game from Spokko studio, will have its premiere this summer.

– Almost half of the team is still working on “Cyberpunk,” also informed Kiciński.

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