CD Projekt Stock Analysis (FY 2020)
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In April 2020, CD Projekt (hereafter: CDPR) became the most valuable Polish company. Today, only a few month after the disastrous Cyberpunk 2077 launch, the video game creator is in a severe crisis. Now, CDPR reported its eagerly awaited Fiscal Year 2020 financial results. How does the company perform in our roovestor company score? Is it a buy? We provide you with all the information you need in order to make your investment decision easier.
Table of Contents
Qualitative Analysis
CDPR Company History
The Video Game Distributor in Early Years
The story of CDPR began back in the 90s when Marcin Iwiński and Michał Kiciński randomly met each other in high school. Both became best friends sharing the same passion for video games. They decided to make money with it – however, CDPR was not born as a video game creating company. In their early years, Marcin and Michał stepped into the retail business, importing games from abroad and selling them on the Polish market. At that time, typical market places were streets, bazaars and open-air markets. The next step was to become an official video game distributor starting with American Laser Games as the first contract partner. Under the name CDP.pl, the company was the first distributor of video games published with Polish boxes and manuals on the Polish market. Back in 1999, the company even published Baldur’s Gate (developed by BioWare) as the first video game fully translated into Polish.
Becoming a Video Game Creating Company
After nearly 10 years of experience in video game distribution, the company’s founders decided to aim for the next milestone by developing their own video game. In 2003, they began working on „The Witcher“ – the company’s first high-budget RPG (abbr. for role-playing game). CDPR acquired game developing rights on the franchise based on the „Wiedźmin“ saga (Polish for „Witcher“) of the Polish author Andrzej Sapkowski. With a budget of 20 million PLN it was the most expensive Polish video game project at that time. Today, the „Witcher“ video game series consists of three main standalone titles with a broad fanbase around the world. The company’s road to success was not a straight line forward – actually, it was more like a rollercoaster. Back in 2010, the company was even fully acquired by Optimus S.A. but could handle a strategic reverse takeover that listed CDPR on the Warsaw Stock Exchange. Then, in 2013 CDPR revealed its next main franchise – Cyberpunk 2077, an open-world RPG in a futuristic setting that finally launched on the 10th December 2020 on PC, Xbox One, Playstation 4 and Stadia. Around 530 developers were working on the game making it obvious that the release of Cyberpunk 2077 was the most important event for the company in 2020.
Significant Events since Cyberpunk Launch
This first teaser trailer showing Cyberpunk 2077 was already released back in 2013. At that time, nobody knew that the release date „coming when it’s ready“ indicated at the end of the video would lead to a big dilemma seven years later. Unfortunately, despite several delays, the game was actually not ready for its global launch. Nevertheless – CDPR decided to release it anyways due to increasing pressure. Right away, gamers claimed major bugs especially on old-generation consoles (Playstation 4, Xbox One) fully destroying the gaming experience and making Cyberpunk 2077 a big mess instead of a fully-functioning AAA (triple A) candidate. As a result, Sony removed the digital version from its Playstation Store.
The cyber attack on CDPR’s IT infrastructure back in February 2021 has been another major event and a nightmare for all employees. Most employees have been locked out of their workstations (for around two weeks) making it impossible to continue work on important hotfixes and patches that were scheduled to improve the Cyberpunk 2077 performance especially on old-generation consoles. In March 2021, many people were surprised by reading that lead game designer of Cyberpunk 2077, Andrzej Zawadzki, has left the company after 8 years of hard and passionate work. On all these events, investors reacted by pushing the “sell” button whereby for us fluctuations – even of key employees – are part of the daily business.
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CDPR Business Model and Outlook
CDPR SWOT Analysis
CDPR CEOs: Adam Kiciński and Marcin Iwiński
Quantitative Analysis
CDPR roovestor company score
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Disclaimer
We assume no liability for the accuracy of the financial data. Sources of the financial data are foremost IR websites of the company subject to the analysis. Additionally we rely on further data and information from Thomson Reuters EIKON. Moreover, unless better data is available, we do our own calculations of available data for KPI determination. Our stock analyses are by no means to be understood as a buy or sell recommendation and do not provide any conclusions regarding the future development of the company (and thus the future price development of the share).