Cyberpunk 2077’s troubled launch could make CD Projekt a buyout target, analyst suggests
Research firm says Polish company would benefit from greater publishing expertise
Cyberpunk 2077’s troubled launch and the damage it has caused to CD Projekt’s reputation has made the Polish company “one to watch” as a possible acquisition candidate.
That’s according to a new report from market research firm DFC Intelligence, which suggests that the problematic position the company finds itself in could have been avoided with greater publishing expertise.
Following three delays, the highly anticipated RPG released on December 10 with a host of technical problems, most notably on last-gen consoles.
The state of the console game, in particular, resulted in refunds being offered and the title being pulled from the PlayStation Store. CD Projekt is also facing a class-action lawsuit which claims the company misled investors over the quality of the product.
“What stands out is that the entire fiasco could have been avoided with some basic marketing and public relations,” DFC said in a research note distributed on Friday.
While it suggested delaying the game—or initially just releasing the PC version, which reviewed relatively well—would have been the sensible decision, DFC said “releasing the console versions filled with bugs would have even been okay if consumers knew what they were getting into”.
Further reading
CD Projekt CEO appears on video to explain Cyberpunk failures and outline plans
CD Projekt’s inability to be upfront about the game’s problems have damaged its reputation, and DFC suggested a company with greater publishing expertise would have handled both the product’s release and the post-launch fallout better.
“CD Projekt stock dropped 50% in December,” it wrote. “This is unacceptable for a company launching a flagship, defining product. A larger public company would have been able to avoid this with basic public relations and marketing.”
Earlier this week, CD Projekt’s co-founder and joint CEO Marcin Iwinski issued a public apology for Cyberpunk 2077’s troubled launch and outlined the company’s commitment to improving the game.
While he said that he and his fellow board members were to blame for the poor quality of the console version, he also claimed CD Projekt’s testing “did not show a big part of the issues” players have experienced and that the company genuinely believed it was ready to be released.
“The irony is that while CD Projekt’s reputation has been stained, Cyberpunk 2077 is likely to still be a huge long-term success,” DFC added in its note.
Cyberpunk 2077 has enjoyed a very successful commercial launch, selling over 13 million copies as of December 22, according to CD Project, which has a series of performance-enhancing updates, a significant amount of DLC, and a next-gen update in the pipeline.
“Unfortunately, CD Projekt’s reputation has been tarnished,” DFC said. “The company now becomes one to watch as an acquisition candidate. This was clearly the case where the marketing and publishing of a larger company would have worked wonders.”
DFC said Microsoft was frequently linked with a potential acquisition of CD Projekt prior to the Xbox maker’s decision to purchase Bethesda Softworks parent ZeniMax Media for $7.5 billion – “so they may not be in a rush to do another big acquisition”.
The research firm added: “An acquisition of CD Projekt would be a risky bet. Even as the stock has fallen, CD Projekt is valued about the same as ZeniMax or French publisher Ubisoft. However, there could be several companies willing to take that risk.
“The main lesson to learn from Cyberpunk 2077 is that the publisher role of managing distribution, marketing and public relations is still an important one. In an online world the general quality of formal, big event product releases has declined. Many would argue that the importance of doing a major release promotion has declined. The launch of Cyberpunk 2077 shows otherwise.”
As the games industry continues to thrive during the coronavirus pandemic, the market has seen a significant rise in mergers and acquisitions.
According to research by InvestGame, the value of M&As in the games industry exceeded $22 billion in 2020, including the yet-to-be-completed sales of ZeniMax to Microsoft and Codemasters to EA, which is the highest amount since 2016. It said the key acquirers in 2020 were Tencent, Embracer Group, Stillfront and Zynga.
Further reading
Cyberpunk 2077’s troubled launch ‘costs CD Projekt founders $1 billion’
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