Cyberpunk 2077 finally wrapped, finishing pre-production on Polaris, net profit up 44%: CD Projekt posts strong Q1 results

Financial highlights

• According to its consolidated report, CD Projekt reached PLN 226.7 million ($57.9 million) in revenue last quarter, up 27.9% year-over-year.
• Operating profit was PLN 81.2 million ($20.7 million), while net profit grew 44% year-over-year to PLN 100 million ($25.5 million).
• Sales of Cyberpunk 2077 and the Phantom Liberty expansion generated PLN 146.2 million ($37.3 million) in revenue — up 94% year-over-year. The Witcher trilogy brought in PLN 28.2 million ($7.2 million), down 41% year-over-year.

• North America remained the top region by revenue, accounting for 70.6% of the company’s total sales in Q1. It is followed by Europe (19%) and Asia (5.44%). Domestic sales (Poland) had a 3.42% share.
• The GOG segment reached PLN 44.2 million ($11.3 million) in revenue, up 6.5% compared to the same period last year.
• “Strong earnings went hand in hand with solid operating cash flows – which amounted to 181 million PLN [$46.2 million] in the first quarter of the year,” CD Projekt CFO Piotr Nielubowicz said in a statement. “We will now need to invest in future projects, but this is something we’re well prepared for, owing to our cash reserves which we have accumulated over the years..”

CD Projekt’s game development pipeline and team structure

• Expenditure on development projects (games in development like the next Witcher title and investment in new technologies) amounted to PLN 50.3 million ($12.8 million), down 27.8% year-over-year. The decrease is also due to the end of production on the Phantom Liberty expansion, so most of the development costs in Q1 concerned the new Witcher title.
• However, the cost of research works for new projects (Orion, Canis Majoris, Hadar) increased 14.4x year-over-year (or to PLN 20.6 million ($5.2 million).
• Cost of production maintenance for released projects decreased by 50% to PLN 5.8 million ($1.5 million). This means CD Projekt is now actively working on its next games in various stages of development.

• The changes are also reflected in the distribution of staff across teams. As of April 30, 630 developers were involved in the company’s ongoing projects. 407 people, or 64.6% of the total, are now working on the next Witcher game (Project Polaris), while the remaining members of the Cyberpunk 2077 team have been redeployed to other titles after finishing the maintenance of the game.
• Project Orion (next Cyberpunk title) currently has 56 devs on the team, followed by Project Sirus (Witcher spin-off from The Molasses Flood) with 39 and Project Hadar (new IP) with 20.

• According to Nielubowicz, CD Projekt will continue to count “strong sales” of its back catalog titles. For example, Cyberpunk 2077: Phantom Liberty, together with the base game, “had the greatest impact” on the company’s results in the first quarter.
• In 2024 CD Projekt plans to increase its Boston-based studio working on Project Orion. During an earnings call, the company said it is “still in the process of building a team that will deliver another fantastic experience in the Cyberpunk universe.”
• CD Projekt is now finishing the pre-production work on the next Witcher game (Polaris), planning to enter the production stage later this year. In its annual report, published in March, the company noted that Sirius was also at the pre-production stage, while Orion, Hadar, and The Witcher 1 remake from Fool’s Theory were at the concept phase.