CD PROJEKT Group H1 2022 Earnings Chat Session

Key insights

6 takeaways

01
CD PROJEKT is transitioning all future game development to Unreal Engine 5, with the Cyberpunk 2077 expansion 'Phantom Liberty' serving as the final project built on the proprietary REDengine.See it on page 3
02
The company is maintaining a workforce of approximately 800 employees, with 730 dedicated to development, and implemented a 23% average salary increase to remain competitive in the talent market.See it on page 4
03
The next installment in the Witcher saga is currently in the preproduction phase, while the 'Phantom Liberty' expansion is in advanced development for a scheduled 2023 release.See it on page 3
04
Management is downsizing the development team for Gwent following the release of the 'Rogue Mage' expansion, though they remain committed to supporting the title.See it on page 1
05
The company is pursuing a multi-media entertainment strategy, exemplified by the 'Cyberpunk: Edgerunners' anime series, to increase brand recognition for its core intellectual properties.See it on page 2
06
The board of directors has reaffirmed its commitment to maintaining corporate independence and plans to present a comprehensive strategy update in October 2022.See it on page 5

Summary

The CD PROJEKT Group H1 2022 earnings chat session served as a platform for management to address investor inquiries regarding the company’s financial health, development pipeline, and long-term strategic direction. The primary thesis of the discussion centered on the company’s transition toward a multi-media entertainment model and its commitment to long-term franchise development, specifically regarding the Cyberpunk and Witcher intellectual properties.

Key operational findings include the company’s definitive shift in technology, as management confirmed that the upcoming Cyberpunk 2077 expansion, Phantom Liberty, will be the final project developed using the proprietary REDengine. Future titles, including the next installment in the Witcher saga, will utilize Unreal Engine 5, a transition supported by ongoing training collaborations with Epic Games. The company maintains a workforce of approximately 800 employees, with roughly 730 dedicated to game development. Despite market competition for talent, the company reported a 23% average salary increase over the previous year to remain competitive.

Regarding project status, the company is currently in the preproduction phase for the new Witcher game, while the Phantom Liberty expansion for Cyberpunk 2077 is in an advanced stage of development for a 2023 release. Management emphasized that while they are downsizing the Gwent development team following the release of the Rogue Mage expansion, they remain committed to supporting the title. Furthermore, the company clarified its multimedia ambitions, noting that the Cyberpunk: Edgerunners anime series serves as a strategic investment to bolster brand recognition and expand the reach of the Cyberpunk universe. The board reaffirmed its commitment to maintaining corporate independence and indicated that a comprehensive strategy update would be presented in October 2022.