CD Project: Laying the Foundation for a Promising Future (OTCMKTS:OTGLY)

CD Projekt (OTCPK:OTGLY) has regained popularity with the gaming community with its critically acclaimed Cyberpunk 2077: Phantom Liberty expansion pack. The expansion pack’s attachment rate was slightly lower than expected, given how well it was received, but the CD Projekt has rebuilt a strong foundation for the future. CD Projekt has not only rebuilt its reputation among gamers, but it’s also very important in a hyped industry like triple-A gaming, and reshaped the company for the better.

Attachment rates for the Phantom Liberty expansion weren’t as high as expected, contributing to the company’s somewhat stagnant price movement in recent months, but the expansion helped restore CD Projekt’s reputation.

solid lineup

With the revival of Cyberpunk 2077, CD Projekt has once again established itself as a top gaming company. Everything about CD Project The flagship franchise is now a leader in its respective genre with Cyberpunk 2077. mainly In futuristic ARPG and The Witcher mainly Take-Two Interactive (TTWO) Rockstar Games has built a loyal fan base with only a small number of titles.

The Witcher in particular still has huge appeal among gaming audiences. In fact, the game is still a cash cow for the company, thanks to continued strong sales of the Wild Hunt expansion and the Gwent card game expansion. As of May 2023, the Witcher series has sold a whopping 75 million units, with about 10 million of those units sold in the last 13 months alone. Moreover, the announced Witcher 4 will likely be another blockbuster release for the company, and will likely surpass The Witcher 3 sales, considering how much the Witcher IP has grown since then.

The Witcher series remains a strong franchise for the company. Sales continue to grow at an incredible rate.

restructuring

Cyberpunk 2077’s disastrous initial launch forced CD Projekt to restructure its business in a meaningful way. In GameSpot’s mini-documentary, company insiders spoke about how they restructured their team to bring together members from traditionally different departments into a single team. This helps companies alleviate issues of silos and lack of communication across departments.

Considering how successful Cyberpunk 2077’s recent patches, releases, and expansions have been, this new approach has clearly worked. Moreover, this restructuring and culture change could give CD Projekt an edge over competitors that haven’t gone through the same firestorm that CD Projekt had with Cyberpunk 2077. The company’s ability to adapt stands in clear contrast to other major academic companies, such as Bethesda, which have been criticized. I’ve been using the same formula for over 10 years.

healthy finance

CD Projekt reported strong third quarter results as a result of the successful Cyberpunk 2077: Phantom Liberty expansion. The company surpassed expectations for both revenue and net income, reaching $112.57 million and $52 million, respectively. Additionally, the company has total liquid assets of approximately $290 million, which will help the company weather any potential economic downturn or negative headwinds.

Big challenges remain

CD Projekt has had an incredibly successful turnaround, at least in terms of reputation, but the company still faces many challenges ahead. Perhaps most obviously, the gaming industry is becoming increasingly competitive. As technology improves, so do graphics, game mechanics, and game design. This means that older games are aging at a relatively fast rate.

This is an especially big challenge for CD Projekt, whose business is so massive that it largely relies on two large IPs. Given the large amount of time between releases, much of the company’s future will depend on the success of major releases of these IPs. From a sales perspective, even one major release failure can devastate a company. Additionally, much of the gaming industry is consolidating, with tech giants like Microsoft (MSFT) increasingly acquiring smaller studios. This means that many of CD Projekt’s competitors now have significantly more resources.

Talent acquisition will also become increasingly difficult as other top studios like Rockstar Games and Activision Blizzard compete for talent. In particular, Take-Two Interactive occupies a similar space and is competing directly with CD Projekt for talent. With GTA 6 receiving unprecedented hype, CD Projekt may have trouble attracting talent in the short term as developers flock to Rockstar Games.

Gaming competition is bigger than ever. The industry hype surrounding titles like GTA 6 will act as a magnet for talent, making it more difficult for CD Projekt to secure its own talent.

conclusion

CD Project has laid the foundation for a hopeful future by restoring its image. The company’s continued efforts to fix and even improve Cyberpunk 2077 will likely pay big dividends in the game’s sales going forward. CD Projekt still has more room to grow at its current valuation of $2.87 billion, considering the values ​​of other pure-play companies such as Take-Two Interactive. CD Projekt continues to expand its consumer base and looks set to continue breaking its own sales records with future releases.

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