1. Business
December 18, 2020

Shares at CD Projekt Red tumble as Sony offers refund

By MarketLine

Cyberpunk 2077 by CD Projekt Red, one of the most highly anticipated games of the year, has been pulled from PlayStation Store by Sony and players have been offered refunds.

Since its release on 10 December, the game has been plagues by bugs and glitches, which has forced Sony to offer a full refund for all gamers who have purchased Cyberpunk 2077 via PlayStation Store.

The game’s turbulent release came after avid fans had to endure months of delays to the launch of the dystopian action role-playing game. The publisher has promised to fix the bugs with updates, however, the underwhelming release has already had financial implications for the games developer.

Issues with the game have been costly for CD Projekt Red

Stocks in Polish publisher CD Projekt Red have dropped by around 30% since the game launched. On 10 December, the games share price was PLN390 (£79.30). By December, 18 after waves of negative reviews and online playthroughs, the firm’s share price had reached a low of PLN255.50 (£52.13). According to a report by Bloomberg, CD Projekt’s founders have seen more than $1 billion cut off their collective wealth due to issues with its latest release.

The company follows a similar business model to Rockstar Games, the creators of Grand Theft Auto and Red Dead, whereby the company works on a single project with a large team and avoids working on multiple projects at the same time. As a result, a lot weighs upon the success of Cyberpunk 2077 and its issues could have a huge impact on the company’s performance.

The developer is also known for stand-out hits such as The Witcher franchise, which was recently adapted into a popular Netflix series. Following the release of the first season of Netflix’ television series in December 2019, The Witcher 3: Wild Hunt had a 554% increase in sales that month compared to December 2018. By December 2019, the game had sold over 28 million copies worldwide.

The success of The Witcher 3 has been crucial in catapulting CD Projekt Red to major video game company. By September 2017, it was the largest publicly traded video game company in Poland, worth around $2.3bn, and by May 2020, had reached a valuation of $8.1bn, making it the largest video game industry company in Europe ahead of Ubisoft.

Pandemic means the video game industry is booming

Despite the issues facing Cyberpunk 2077, the video games industry is thriving. As the Covid-19 pandemic hit around the world which led to local and national lockdowns, people have taken to hobbies at home and this meant spending more time playing video games.

A study was produced in August 2020 that noted there was a 39% increase in global spend on video games as a result of Covid-19, with an expected increase of 12-15% on the year compared with 2019, indicating a huge increase in audience engagement for video game developers.