Cyberpunk 2077 Has Taught CD Projekt Red “a Huge Lesson” Despite Best Financial Year Yet

Latest investor call involved degrees of transparency.

CD Projekt Red’s earnings call with investors on April 22 revealed plenty of key data and statistics following the rocky launch of Cyberpunk 2077. Ultimately, while the Polish developer has had its most financially successful year yet, it has learned “a huge lesson” from the reception to the long-awaited 2020 title.

Cyberpunk 2077′s total budget was approximately 1.2 billion PLN (Polish zloty). In 2020 alone, it sold more than 13.7 million copies. While that doesn’t meet the number analysts forecasted before its launch (14.5 million copies), it’s still pretty significant. In total, CD Projekt Red made approximately 2.14 billion PLN ($563 million) in 2020 and had a net profit of 1.15 billion PLN ($301 million).

Cyberpunk 2077 refunds resulting from its poor launch barely had an impact on the company’s bottom line. CD Projekt Red confirmed that about 30,000 copies were refunded through the “Help Me Refund” program that was started to help dissatisfied customers. This does not count refunds made through other retailers such as Microsoft, GameStop, Walmart, Amazon, and Best Buy.

This also doesn’t account for the effects of Cyberpunk 2077 getting delisted from the PlayStation Store, an unprecedented move by Sony. “In general I would say that the sentiment about Cyberpunk 2077 and the situation with the Sony digital storefront… the fact that we were cut off from large portions of the market, which may have also indirectly affected gamers’ decision to purchase the game on other platforms, definitely influenced the sales,” said a CD Projekt Red executive on the matter.

With 95% of those refunds processed, this amounts to approximately $2.2 million in costs. However, Ars Technica has pointed out that buried in the “Other Provisions” section of the financial report is an acknowledgment of $51.2 million as “provisions for returns and expected adjustments of licensing reports related to sales of Cyberpunk 2077 in its release window, in Q4 2020.” This includes all digital and retail refunds for the game in 2020, as well as expected refunds and lost sales throughout 2021.

In short: while $51.2 million sounds like a big number, it still makes up a very small fraction of $563 million.

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Nonetheless, as Ars Technica reports (seriously, be sure to read the article for all the number crunching you’ll need), CD Projekt Red has suffered notable damage to its reputation despite the financial records. A week before Cyberpunk 2077′s release, the developer’s stock price peaked at $31 a share. Earlier this week, the stock closed at $11.68 a share, a 62 percent decrease.

Cyberpunk 2077′s reception has inspired a significant internal change that the company is naming “Red 2.0.” As previously reported, this primarily consists of a dedication to parallel AAA game development for multiple titles at once. Previously, CD Projekt Red focused on developing only one title at a time. Now, its acquisition of Digital Scapes, a Vancouver-based studio that has done support work on games like Dying Light, Dead Rising, and Cyberpunk 2077, will help the company achieve this mission. It does not see Cyberpunk 2077 as deserving to be shelved and expects to sell the game for years to come.

“We managed to introduce a new IP to the market and to the minds of gamers around the globe,” CDPR said in its briefing, as reported by IGN. “Now with The Witcher franchise, we have two strong pillars on which to build the future of CD Projekt. But of course, as well know not everything went as planned. It has been a huge lesson for us that we shall never forget.”

The executive continues by saying that the company has “been stressing a lot, we’re going through a lot of changes inside the company and we believe we’ve taken a lot of lessons from everything that’s happened so far.”

You can listen to the earnings call and watch the accompanying presentation here.