CD PROJEKT Group Management Board Report on Activities in 2022

Key insights

6 takeaways

01
CD PROJEKT transitioned to a dual-franchise development model, centering future production on The Witcher trilogy and Cyberpunk while initiating a third proprietary IP, Hadar.See it on page 38
02
The company secured a 15-year licensing agreement to shift its future development pipeline to Epic Games' Unreal Engine 5.See it on page 36
03
Net profit increased by 66.1% to PLN 347 million in 2022, supported by the recovery of the GOG.COM segment and sustained sales of core titles.See it on page 69
04
The Group maintains a debt-free balance sheet with over PLN 1 billion in cash, deposits, and Treasury bonds, despite a 32.8% decline in its stock price during 2022.See it on page 77
05
Digital channels accounted for nearly 90% of total sales, with 97% of the company's revenue generated from international exports.See it on page 8
06
Operational risk management efforts included the implementation of Agile methodologies, the resolution of a US class action lawsuit regarding Cyberpunk 2077, and the suspension of business operations in Russia and Belarus.See it on page 48

Summary

CD PROJEKT Group’s 2022 activities centered on a strategic pivot toward long-term growth, characterized by the expansion of its core The Witcher and Cyberpunk franchises and a transition to a dual-franchise development model. By leveraging next-gen console releases and the successful Cyberpunk: Edgerunners anime, the company bolstered its global market presence, with 97% of revenue derived from exports and nearly 90% of sales occurring through digital channels. This period also marked a significant technological shift, highlighted by a 15-year licensing agreement with Epic Games to adopt Unreal Engine 5 for future projects, including a new Witcher trilogy and the development of a third proprietary IP, Hadar.

Financially, the Group demonstrated resilience despite a 32.8% decline in its stock price and the broader challenges of a cyclical AAA production model. The company maintained a robust balance sheet, ending the year with over PLN 1 billion in cash, deposits, and Treasury bonds, while remaining entirely debt-free. Net profit rose by 66.1% to PLN 347 million, supported by the recovery of the GOG.COM segment and the sustained performance of its core titles. These results were achieved even as the company navigated organizational restructuring, leadership transitions, and the suspension of operations in Russia and Belarus due to the war in Ukraine.

Operational risk management remained a priority throughout 2022, with the implementation of Agile methodologies and specialized internal units for compliance, privacy, and tax matters. While the company faced production hurdles and the impairment of the Sirius project, it successfully resolved a US class action lawsuit regarding Cyberpunk 2077 and formalized its commitment to environmental sustainability through TCFD-aligned reporting. By prioritizing talent retention and investing heavily in R&D, the Group has positioned itself to scale production capabilities and navigate the evolving legal and market pressures inherent in the global gaming industry.