CD Projekt showed strong results for the first quarter of 2024, achieving a robust 30% revenue growth. Historically, this signifies an exceptionally good performance for quarters without major releases.
Cyberpunk 2077 and its expansion, Phantom Liberty, contributed significantly to the sales increase, accounting for over 64% of the company’s total revenues. The excellent sales performance was bolstered by the release of final patches for the game, which allowed Cyberpunk 2077 to finally stabilize. The game has now fully emerged from its improvement phase, and the development team that had been working on fixing and enhancing it has been reassigned to other studio projects. Although the repair process took too long to completely erase the negative impact of Cyberpunk’s 2020 release, the efforts to fix the game have paid off. In recent months, Cyberpunk 2077 has seen a dramatic increase in positive reviews. On May 10, reviews for the last 30 days surpassed the 95% positive mark, which is truly impressive. Cyberpunk 2077 also received a BAFTA award for the best-evolving game of 2023. All these factors signal a positive strengthening of the Cyberpunk brand in the minds of players, potentially sustaining positive sales trends for the product in the coming quarters.
Regarding CD Projekt’s other brand, The Witcher series, we saw a decline in game sales in the first quarter, with revenues decreasing by 41% year-over-year. The negative trend may be mitigated by the release of the Red Kit modding tool in May, which could encourage players to revisit the game world.
Prospects for the coming quarters appear to be primarily based on expectations for signals regarding the company’s major projects. CD Projekt has not yet provided new information on the progress of Project Polaris, the new Witcher game, which remains in pre-production. The planned start of full production is the second half of 2024, although further details are awaited from the company.
The easing of the Hollywood environment after last year’s strikes provides fertile ground for a new film production from the Cyberpunk universe, and at the conference, management indicated that they do not rule out expanding their productions to include potential mobile games. All this suggests that the company’s prospects, despite the distant horizon for the release of its next major title, could provide new impulses to increase player interest while awaiting the most significant releases.
During the anticipation period for the marketing campaign launch of Project Polaris, any positive signals from the company could be warmly received by investors. The results for Q1 2024 demonstrated the company’s strong financial foundations, even in a quarter without significant releases.
Author: Tymoteusz Turski, XTB Analyst
