CD Projekt reports record Q3: profit up over 500% on strong Cyberpunk 2077 sales

Financial highlights

• According to the report, net sales were PLN 245.5 million ($54.3 million), which is up 69.9% year-over-year.
• The CD Projekt RED segment accounted for 83.5% of total revenue, while GOG generated PLN 44 million ($9.7 million).
• 79% of sales came from digital copies of CD Projekt games.
• North America accounted for 75.6% of the company’s total net sales, followed by Europe (14.4%) and Asia (5.7%). Domestic sales were PLN 7.4 million ($1.6 million), or around 3% of total revenue.
• Net profit was PLN 98.7 million ($21.5 million), up more than 500% compared to the same period last year.

• On July 20, CD Projekt increased its stake in The Witcher: Monster Slayer developer Spokko from 74% to 87.6%.
• In Q3, the net profitability of CD Projekt reached 40%, a significant increase compared to 11.3% in the same period last year.
• It is also worth noting that the company’s product costs almost doubled year-over-year to PLN 79.2 million ($17.5 million). Most of this sum went to the development of new games.

Main sales drivers

• CD Projekt CFO Piotr Nielubowicz called the three-month period a “busy quarter” for the company, especially its final month.
• The record Q3 was largely due to the high sales level of Cyberpunk 2077.
• In September, CD Projekt released patch 1.6 for Cyberpunk 2077, which introduced new in-game content related to the Edgerunners series along with many fixes.
• The Netflix anime series came out to warm reviews from both critics and players, entering the top 10 lists in 19 countries.
• This boosted sales of Cyberpunk 2077, resulting in 1 million unique users playing it daily for four consecutive weeks. The game also hit 20 million units sold globally.
• During an earnings call, Nielubowicz called the third quarter the “best one for Cyberpunk game” in terms of sales this year. But he refused to disclose the exact numbers.
• CD Projekt VP of business development Michał Nowakowski added that the game’s sales level is now even higher than prior to and straight after the launch of Edgerunners.

Despite reporting a record third quarter, CD Projekt shares are now sliding down. At the moment of writing, they are trading at PLN 131, down 5.5% from the previous close of PLN 138.5.

Future plans and new games

• As of October 31, CD Projekt has cut the size of development teams working on Cyberpunk 2077 and GWENT.
• The company is now largely focused on the Phantom Liberty expansion for Cyberpunk 2077, which is expected to come out next year. Right now, the team consists of almost 350 people.
• After that, CD Projekt’s new studio in Boston will accelerate the work on the Cyberpunk sequel codenamed Orion. It will be a conceptual phase, so the game is still years from its launch.

• More people are now also getting involved in the production of the next Witcher game codenamed Polaris. The team has grown to more than 150 people.
• Around 60 developers at The Molasses Flood are now working on the standalone Witcher title codenamed Sirius.
• These are one of several new projects that CD Projekt announced last month as part of its updated strategy.