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CDPR financial status and strategy The Witcher 3 - 15mln sold

Perkel

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http://platforma.livingmedia.pl/cdprojekt/160218002/index.php

Some information:
- Combined sales of all Witcher games is now over 20 million copies
- Plan for 2016: A new type of video game format previously unexplored by the Studio
- Digital sales of the Witcher 3 - 31.6% representing 50.2% of the revenue

Plans for 2017-2021:
- Release of Cyberpunk 2077
- "We aren't a long way away from the premiere" - Adam Badowski on the state of the development of Cyberpunk 2077
- Release of another AAA RPG
- Expansion of core franchises with additional media content and product lines
- Two fold expansion of the CDPR team - creation of four individual teams, two of them tasked with the development of of games representing new segments
- Establishment of new local branches of CDPR in key territories

GOG.comin 2016:
- Release of an AAA game unaffiliated with GOG, with full support of GOG Galaxy- concurrent with global release date.
- More global releases of AAA titles with Galaxy support coming in 2017-2021

Misc:
- Share price increased by 353% in the last 4 years
- CDPR to buy back shares in the future

hnWc6NR.png


20mln coppies for all TW games. Last time they said anything about TW sales was before TW3 release and they said they both sold ~4mln. Which means that it is safe to assume that they sold about 15mln TW3 games.

also important:
- CDPR to buy back shares in the future

Which means they want to get more independant.
 
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veevoir

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Plans for 2017-2021:
- Release of Cyberpunk 2077

Maybe on 2020? :M

- "We aren't a long way away from the premiere" - Adam Badowski on the state of the development of Cyberpunk 2077

Imo this year E3 Teaser or Trailer on Sony or MS stage and release in fall 2017 with PR campaign starting early 2017

I hate to explain stuff like that, but here you go: https://en.wikipedia.org/wiki/Cyberpunk_2020

The are late for 2013 already, so 2020 is the next sensible date.
 

Perkel

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The Witcher 3 has revised approach to Cyberpunk 2077. They are now aiming higher, going for a more revolutionary, more complex game.
 

Tacgnol

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If we assume that the vast majority of digital sales of TW3 were on PC, that suggests that PC accounts for almost half the revenue of TW3.

But but... the console manufacturers were saying PC gaming is dead.
 

Thal

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http://platforma.livingmedia.pl/cdprojekt/160218002/index.php
also important:
- CDPR to buy back shares in the future

Which means they want to get more independant.

This is actually more investor service. It tends to increase the share price, because there's less of them floating around. CDPR doesn't pay dividend so this is a good way to increase value for shareholders. No taxes either.

However, if the company is not succesful, share price will drop no matter what, and then they have bought their own shares at inflated prices. And all this time shareholders got nothing. See Nokia for example.

What this means for gamers is that the company is in excellent shape if it can afford to do this. They're also pretty confident that their new games will sell well.
 

Turjan

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But but... the console manufacturers were saying PC gaming is dead.
As one of those console manufacturers is Microsoft, I guess they know how to kill it.
Have you already upgraded, citizen?
 

Tacgnol

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But but... the console manufacturers were saying PC gaming is dead.
As one of those console manufacturers is Microsoft, I guess they know how to kill it.
Have you already upgraded, citizen?

They're welcome to try. I suspect that all this UWP shit will go the way of GFWL.

Anyway it's nice to see both CDPR and PC gaming doing well.
 

WhiteGuts

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I think it's especially good that CDPR is doing well, considering their consummer-friendly approach to business (an anomaly in this day and age).
 

Perkel

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I think it's especially good that CDPR is doing well, considering their consummer-friendly approach to business (an anomaly in this day and age).

Yeah and apperently they want to release some AAA game on gog without any drm day1.

Selling 15mln tw3 is posibbly the best way to spread message about drm
 

undecaf

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My dick is hard for Cyberpunk 2077, I can't help it.

Mine would be too, but chest bumbing for "bigger and more popular" (with the ever so humble CDPR self elevation goals) doesn't really read as well as it is intended.

This news actually had the opposite effect on me than what probably has for most. If it holds any more weight than ads for investors (or what ever that thing was all about).
 

Goral

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I'm more interested in the "release of another AAA RPG". Vampire The Masquarade would be ideal or maybe The Malazan Book of the Fallen adaptation or Age of Decadence remake made by them ;P.
 
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Perkel

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I am curious about their post-Witcher series~

I am more interested in their non AAA works. They confirmed few months ago that beside AAA games they will be doing smaller games.

Smaller games usually are used to build up IP and shuffle ideas. Smaller IP also means less risk if it fails so maybe they actually will do smaller RPG with ton of gameplay maybe something paradox like.

They certainly know that they want to create well loved games if they didn't TW3 would look differently than what it is and with each game they seem to improve.
 

Aenra

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I am not into economics, got an accountant for that. Halp meh in comprehending!
If your purpose is to eventually re-acquire previously sold stocks or simply get hold of as many as legally possible (49% ?), why state it in advance? Forewarned is forearmed, you are basically telling the current owners their stock is about to go up.. So unless your purpose really IS increasing their value (and NOT actually owning them), ie 'playing the market', why do it? And if that really is your sole purpose, is it legal? When it is so .. transparent a strategy? :S
 

vonAchdorf

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20mln coppies for all TW games. Last time they said anything about TW sales was before TW3 release and they said they both sold ~4mln. Which means that it is safe to assume that they sold about 15mln TW3 games.

also important:
- CDPR to buy back shares in the future

Which means they want to get more independant.

I don't think they sold 15M copies of TW3 - on Steam alone, there are 6.5M owners of TW/TW2. I'd put TW3 sales at around 10M max. They'd probably would have made a press release after hitting 10M.

Also their goal to be among the Top 3 video game developers (not just rag developers) is a bit worrying. That would mean that they'd become bigger then EA, Ubisoft or Activision. Or it's just wrong on the slide.

The buyback could just mean they have to much money and don't know what to do with it (AAPL) and think that they are undervalued even after their nearly 400% increase in share price.
 

NullFlow

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I'm pretty surprised they're working on another AAA RPG, whether they'll stick with the tried and true fantasy or something more experimental. With their future plans and expansions they're planning I wonder if they're looking to be the next Ubisoft or EA. Hopefully they work more on the actual RPG side of things and refine the gameplay variety.
 

sullynathan

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Eh more like they've sold close to 8 - 10 million copies of Witcher 3 since Witcher 1 & 2 sales would also go up.

They're probably making an episodic or mobile game or non-rpg.
 

Mustawd

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What this means for gamers is that the company is in excellent shape if it can afford to do this. They're also pretty confident that their new games will sell well.


How do you figure? Stock buybacks are typically done for the benefit of their investors or to improve financial metrics such as EPS, ROA, or the P/E ratio. In fact, it can mean the growth of the company is declining. Meaning that buying back their stock is a better investment to shareholders than if the company expanded into newer areas and projects.

Why do you think it has anything to do with the confidence of their next game? I just find that odd. If they had really profitable games in the pipeline it makes more sense to keep the cash and spend their money on that.
 
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Mustawd

Guest
I am not into economics, got an accountant for that. Halp meh in comprehending!
If your purpose is to eventually re-acquire previously sold stocks or simply get hold of as many as legally possible (49% ?), why state it in advance? Forewarned is forearmed, you are basically telling the current owners their stock is about to go up.. So unless your purpose really IS increasing their value (and NOT actually owning them), ie 'playing the market', why do it? And if that really is your sole purpose, is it legal? When it is so .. transparent a strategy? :S


This is how it works:

There's two pieces to why companies do this. The first piece is understanding why a stock goes up in the first place when there are share repurchases:

1. Let's say the net profit of a company is $10 million. And let's say there are 1 million shares floating around. Each share is now theoretically entitled to $10 of those earnings per share. If I cut the number in shares by half, then theoretically each share is now entitled to $20. It's basically giving investors a bigger piece of the pie. So it's worth more.

2. Since the stock is now worth more, the price valuation will go up. And if you are an investor you can sell your stock at a higher price and make a return from the original price.


Ok, so why don't all companies do this? Second part to understand is Capital Budgeting...AKA "I have all this money. Now what do I spend it on to make it into more money?"


1. Assume Company A has $100M in cash to allocate among their current operations and any future projects. Each project/operation has a set return on investment. Meaning if Project A has a ROI of 50% and you invested $100, you'll get a total of $150.

2. Company A has ranked all their projects by ROI. Let's say there are 10 projects spread out evenly among the $100M. Each project has its own forecasted ROI%. So let's say the last two potential projects have an estimated ROI of 5% and 7%. This can be for various reasons. Some can be industry specific. Some can be global....company-wide, etc. And sometimes it is just temporary (like for a year) due to macro issues like currency volatility, etc.


If the estimated return % of buying back shares is higher than actually putting money into the last two projects, then it makes sense that you would spend the money on buying back shares. So that's why cmopanies do this a lot of times. There are other reasons, but I'd say this is the most common.

That's a good thing right? Meh. It depends on what you as an investor are looking for. If you buy Facebook and then they suddenly say "Yah, we can't think of anything else to invest all this cash in. So we're buying back shares", then you'd probably sell the stock, since you're more than likely are looking for a growth stock.

But if say, you are Yahoo, and your business model is kind of going down the toilet, but you think you can survive as a boring $1B in revenue a year company, then it's a good thing to just admit that and use the cash wisely. Otherwise, you're just burning money on fruitless turn-around attempts instead of giving investors returns.

It also depends on the reason. Maybe they just have a ton o cash for XYZ reason that's not normal for their operations? Maybe their stock had a rough year for reasons outside their control and want to help the price appreciate. Maybe there's been pressure to pay dividends and this is another way to give a "dividend" of some sort without setting the precedent of paying dividends.

EDIT: This is my experience with share repurchases anyhow. Hegel you're an investor. Would you say that's basically right? Or am I missing something?

EDIT2: I'll also say that when a company matures and their growth slows, then it's not necessarily a bad thing if their long term success is still sustainable. It just means they have left over cash and no good new projects to funnel it in that are really worth more than just buying back stock.
 
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