Analysts say CD Projekt roadmap does not imply an acquisition
Cyberpunk 2077 isn’t really a “Waterloo” to this day, but it did disrupt CD Projekt’s momentum, causing it to delay the game’s DLC until it continued to be fixed, and hurting the company’s stock price. But reports last week that Cyberpunk 2077’s “debt repayments” over the past year don’t mean the company will back down in the future. In fact, CD Projekt’s ambitions have instead multiplied: the company says it will make a “Cyberpunk 2077” sequel, release three new “Witcher” RPG games in just six years, and develop a new world set in a new RPG. New games and more.
Meanwhile, co-CEO Marcin Iwiński said he would step down and take up a new role on CD Projekt’s supervisory board. The announcements inevitably sparked speculation that CD Projekt could be a takeover target. The theory goes that its ambitious roadmap is either designed to attract big investors or thwart takeovers by raising its share price.
It feels like all the game studio shopping that a big company like Microsoft has been doing is possible, but Rhys Elliott, an industry analyst at games research firm Newzoo, believes CD Projekt’s bold roadmap doesn’t justify anything about its current or the immediate conclusion that future ownership will change.
“A rich roadmap is not a clear indication of an expected acquisition by the company, and we don’t want to speculate on the possibility of CD Projekt being acquired,” Elliott told PC Gamer.
According to Elliott, mid-sized developers often develop ambitious internal roadmaps to forecast revenue and set development deadlines. Telling the world about these roadmaps isn’t typical, unlike CD Projekt. Elliott thinks the company is noticing its position is improving, especially after the success of the Cybertron/Edgewalker animation on Netflix, and wants to seize the moment.
“If CD Projekt discloses this roadmap before fixing the state of Cyberpunk 2077, there will be an outcry from the public and investors, further adding to the negative sentiment around the company,” Elliott said. “Public sentiment around the company has now become more positive, and CD Projekt wants to capitalize on that sentiment and build up to completely reverse the negative narrative. The stock market has also reacted positively to these announcements.”
Shares of CD Projekt have risen about 28% in the past month. Elliott thinks investors particularly appreciate the announcement of an unlicensed game. CD Projekt will own the IP outright, unlike Cyberpunk and The Witcher games. Investors also particularly appreciated the news earlier this year that CD Projekt was moving to Unreal Engine 5.
“The company wants everyone to know that it has learned from its mistakes, is redoubling its efforts to implement the most successful strategies, and has many projects in the pipeline,” Elliott said. “That’s good news for investors.”
Another analyst, David Cole of DFC Intelligence, has a similar view.
“It seems to me that this announcement is an attempt to convince current and potential investors that there are a lot of exciting things going on,” Cole said.
But are any of these potential investors eyeing a controlling stake in the company? Elliott did note that both Tencent and Savvy Games Group said they wanted to make large acquisitions in Europe.
In particular, the Saudi Arabia-funded Savvy Games Group said it was interested in buying a “leading game publisher” for $13 billion. CD Projekt won’t spend $13 billion, although the fund may be planning multiple acquisitions. It’s not hard to imagine CD Projekt under the Xbox banner, or into Embracer’s embrace, or as a Sony studio, but none of those scenarios will happen. In fact, all I’ve heard recently on this topic is another CD Projekt co-CEO, Adam Kiciński, in a 2021 interview: “We’ve been repeating over the years that we plan to remain independent and not plan to be bigger. part of the entity.”
Currently, CD Projekt’s largest single shareholder is outgoing co-CEO Marcin Iwiński, who owns 12.78% of the company. Another CEO, Adam Kiciński, owns 4.02%. The other main individual owners are Michał Kiciński and Piotr Nielubowicz. The remaining 66.04% of the shares are publicly traded.