Why was this the case despite the game’s sales performance being very good? Because no one thought that CD Projekt would be able to maintain these results in the coming years. And then the reports for 2016 began to appear, which showed that the sales of The Witcher 3 were falling, but only slightly. The company closed 2015 with revenues of PLN 698 million, while in 2016 it had revenues of PLN 583 million. For comparison, in 2014 it was less than PLN 100 million. This is largely due to two large add-ons to the game that appeared in October 2015 (Hearts of Stone) and in May 2016 (Blood and Wine). They kept the interest in the game and boosted sales figures. To date, The Witcher 3: Wild Hunt has found over 28 million buyers on all platforms where it is available.
How will the course of CD Projekt behave after the premiere of Cyberpunk 2077?
Despite the falling revenues in the years following the premiere of the third installment of The Witcher, CD Projekt’s share price continues to rise, reaching its record value at the end of August this year. At that time, CD Projekt was also developing other brands, such as Gwint, which allow to improve results in 2020 compared to 2019, but the market is still discounting the great sales of Cyberpunk 2077. Analysts predict that only in 2020, sales of this title may exceed 24 million copies, and in 2021 another 10 million copies may be released, especially when a version prepared especially for new-generation consoles appears.
This would mean an increase in revenues in 2020 to approximately PLN 2.8 billion, and in 2021, achieving revenues of PLN 2 billion. Given the company’s current capitalization of around PLN 36bn, this would give a price-to-book ratio of 12.8. For comparison, Activision Blizzard has this indicator at around 10. This, however, does not give the full picture of the situation, because the lion’s share of revenues will be converted into pure profit for the company. If analysts are to be believed, in 2020 it may be as much as PLN 1.6 billion, and in 2021, PLN 1.2 billion. This means that the net profit is 60% of revenues. Mature gaming companies like Activision Blizzard score 25%.
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