CD Projekt SA said on Monday that its profits fell by more than half in the first quarter compared to the previous year as its flagship game, “Cyberpunk 2077”, was banned from Sony’s PlayStation Store, which, according to a business manager, will continue to have an impact on the bottom line.
“Cyberpunk 2077,” starring Hollywood star Keanu Reeves, was one of the most anticipated games of the past year. It’s been delayed three times, and after a bug-full premiere, it was taken off the Sony PlayStation Store listing (6758.T) for over five months. Read more
CD Projekt (CDR.WA) did not say how many units of “Cyberpunk 2077” it sold during the quarter. The company’s chief financial officer, Piotr Nielubowicz, said on a conference call that about 60% of first quarter product sales came from Cyberpunk sales, without providing details.
Analysts said sales were likely weak, due to Cyberpunk’s absence from PlayStation Store and the release of a major patch in late March.
“The general situation until we get back to the Sony store has not changed. One of the main markets for us is not available and we generate most of the sales on PC / digital channels,” a company official said at the conference. call.
First quarter net profit fell 64.7% to PLN 32.5million, well below Zloty 80million expected by analysts, impacted by the depreciation of Cyberpunk 2077 development expenses and repair work of gambling. Revenue fell 2% to 197.6 million zlotys ($ 53.94 million).
Selling expenses increased 79.6% to 62.1 million zlotys in the quarter.
Beaten down by Cyberpunk’s launch, CD Projekt plans to launch big-budget side-projects from 2022, as well as research merger and acquisition opportunities.
Future sales growth, however, depends on its ability to re-engage Cyberpunk players. It has confirmed its intention to release free downloadable content and update Cyberpunk and The Witcher 3 to next-gen consoles in the second half of the year.
Last year, the company’s shares hit a record low of PLN 464.2 as Cyberpunk’s launch approached, but lost more than 60% of its value.
“While results are weaker than expected, we believe a lot of the negativity related to the quarter is already built into the price,” Credit Suisse analysts said in a note.
($ 1 = 3.6632 zlotys)
Our standards: Thomson Reuters Trust Principles.