CD Projekt H1 2018 Financial Results: Chat Session with Individual Investors

Key insights

6 takeaways

01
CD Projekt is committed to a strategic goal of releasing two AAA titles by 2021, with Cyberpunk 2077 currently in development for PC, Xbox One, and PlayStation 4.See it on page 5
02
As of June 2018, the company held 608 million PLN in cash assets, which are being utilized to support increased development expenditures and recruitment efforts.See it on page 1
03
Marketing investment for Cyberpunk 2077 is projected to exceed the budget previously allocated for The Witcher 3.See it on page 6
04
The company acquired the SNT studio for approximately 10 million PLN to support its expanding operational scale.See it on page 2
05
Gwent’s revenue model in China is based on profit-sharing with an independent publisher, while all other global territories are managed internally.See it on page 4
06
The company has no current plans to release Cyberpunk 2077 on the Nintendo Switch platform.See it on page 3

Summary

This investor chat session, held in August 2018, serves as a formal update on CD Projekt’s financial performance for the first half of 2018 and provides strategic clarity regarding the company’s ongoing development pipeline. The primary thesis of the leadership team is to maintain organic growth while scaling operations to support two major AAA releases by 2021, including the highly anticipated Cyberpunk 2077.

Key financial and operational data points reveal that the company held 608 million PLN in cash assets as of June 2018, which are managed through diversified bank deposits. Development expenditures increased during the second quarter of 2018, driven by recruitment efforts, E3 promotional activities, and the development of Gwent and Thronebreaker. The company confirmed that the acquisition of the SNT studio was settled for approximately 10 million PLN. Regarding revenue, the company noted that Gwent’s performance in China relies on a profit-sharing model with an independent publisher, while other territories are managed internally.

The scope of the company’s operations remains global, with a workforce primarily based in Warsaw, supplemented by smaller teams in Kraków, Wrocław, Los Angeles, and Shanghai. The leadership emphasized that Cyberpunk 2077 is currently targeted for PC, Xbox One, and PlayStation 4, with no immediate plans for a Nintendo Switch release. Furthermore, the company confirmed that its strategy to release two AAA titles by 2021 remains in effect, with the second project currently in preliminary development. Management maintains a cautious, long-term outlook, characterizing their current growth phase as an ongoing marathon rather than a short-term sprint, while affirming that marketing investments for Cyberpunk 2077 will exceed those previously allocated for The Witcher 3.