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Polish CD Projekt shares crash as strategy update falls flat

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GDANSK: Shares of Polish video game maker CD Projekt fell nearly 15% to their lowest level in two years on Wednesday after an update to strategy to restore investor confidence following the launch of a game bugged last year.

Analysts said the update gave few details on plans beyond 2021 and that some were disappointed with the changes to the proposed multiplayer version of its flagship game Cyberpunk 2077.

Shares of CD Projekt, hit by Cyberpunk 2077’s failed launch last year, were down 14.7% to PLN185.8 at 12:20 GMT. The market value of the company has more than halved since December and now stands at around 20 billion zlotys (5 billion US dollars).

CD Projekt announced on Tuesday evening that it plans to transform its studio and change the way it develops new products so that it can start producing big budget games in parallel from 2022, while also pursuing fusion goals. and acquisition.

It will also gradually incorporate online elements, including multiplayer options, into its single player games.

“This leaves us with very reduced revenues in 2023 and no certainty on when there might be another peak in revenues,” Barclays analysts said in a note, retaining their rating of “underweight” on the title.

Following the update, Credit Suisse reduced its Cyberpunk sales estimate by 30% to 13.7 million units for 2020 and 46% to 8.6 million in 2021, while downgrading its rating on the action at “underperforming” from “neutral”.

Starring Hollywood star Keanu Reeves, Cyberpunk 2077 was CD Projekt’s most anticipated game since 2015’s “The Witcher: Wild Hunt,” but its sales fell short of expectations after the bug-laden release, which led Sony Corp to remove the game from its PlaySation store.

Some analysts have also been disappointed with the company’s decision not to give a timeline for key games beyond this year. However, analysts at Jefferies said they didn’t think that meant there would be delays.

“Taking a stealthy approach protects staff and probably marks a low point in sentiment, we think,” they wrote.

(1 USD = 3.9693 zlotys)

(Reporting by Anna Pruchnicka. Editing by Agnieszka Barteczko and Mark Potter)

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