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[Champomade]

Hello GAF,

Just thought it could be interesting to share with you some crude maths I just did on the stock market impact of the arguably botched launch of this long awaited game. All figures are approximate and from public sources.

- Stock price of CD Projekt (WSE: CDR) has declined from 443 PLN per share on the 4th of December 2020 (pre-launch peak) to 250 today (and is currently continuing to decline so these are the numbers as of now but it may get much worse, or better, in the next days).
That is a 44% decline, that I think is fair to assume to be virtually all attributable to the launch.

- At 443 PLN per share, the value of CDR equity was an astounding (for a company this size) USD12.2bn . Today it is USD6.9bn, i.e. a loss in equity value of slightly over USD5bn.

Going forward I assume Equity value = enterprise value, which is broadly correct here given the company seems to have little debt or cash on its balance sheet.

- What does this mean? Basically, that investors assume the Company is going to generate a net present value of 5bn less in cash flow over the course of its life (I.e. much more than 5bn but you have to account for the time value of money).
If we simplify and assume 5bn of cash flow, given their very high profit margin of around 30% forecasted by analysts going forward, that means around 20bn of revenues give or take.
If I assume $50 of revenues on average per game sold (in reality, not being familiar with the financials of this industry, I have no real idea how much an editor makes in revenues per copy sold, could be way less than 50, which would make the following numbers even more impressive), that means investors assume CDR will sell over 400 millions copies less of full priced AAA video games because of this launch!

- Another way to look at it is in terms of multiples of revenues.
Today CDR is valued at around 10x its anticipated annual revenues going forward. Which means that a loss of 5bn in equity means investors expect CDR to do less 500 mil of revenues per year every year until the end of times than what they expected before the launch.
However, being valued at 10x revenues could still appear quite rich when compared to peers. For example Ubisoft, a company with potentially less growth but clearly less volatile and with a more diversified business model, is currently valued at 4x revenues.
This means that if investors decided to value CDR the same way as Ubisoft, the share price of CDR would decline by another 60%.

- Finally, it might bring solace to frustrated gamers to remember that the biggest owners of CDR equity are still the founders and top management of the company (AFAIK). Indeed, based on public information, the founders and management still own over 30% of the stock.
This means that their wealth has declined by over USD1.5bn (paper loss at the moment) over the last 2 weeks or so.

Note: I have tried to be as clear as possible so I might have simplified things a bit too much. Also, I have written this very quickly so I might edit it in the future if I think of any obvious mistake.
I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this post myself. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this post.

 

[Life]

Meh - just care about the upcoming DLC whenever it drops. Or maybe a sequel.

 

[Valued Gamer]

Time for MS to swoop in and buy it for pennies on the dollar.

 

[keraj37]

I think in a long run, they will get from the bottom they are now and be once more on the top.
And I think after some longer period of time CP77 will be recognized as one of the best games out there.
But we need to wait for the mess to be cleared out.

And just a side note - the stock price and real wealth sometimes is very disconnected - it is not that CDPR lost an office and assets worth o 5b, no - all this was loss on paper, like you say.

 

[ZehDon]

Did you factor in the speculatory sell off that occurs prior to any large announcement or release, and did you factor in the investor sell off that would’ve occurred just prior to the launch where short term investors were looking for their ROI? Without this, any inference is largely worthless.

 

[Cyberpunkd]

Time for MS to swoop in and buy it for pennies on the dollar.

Compare current valuation of around 5-6bln to Bethesda’s 7.5bln which got them multiple studios, IPs, etc. CDPR gets you one game every 4-5 years, Gwent, GOG (which is probably going to see a decline as a result of the current situation).

It’s shocking how good the deal to buy Bethesda was for Microsoft.

 

[ozz ex machina]

Am I mad for considering buying some stocks in this when the market opens later today?

 

[PharaoTutAnchAmun]

If you like to gamble with your money be my guest. If i where you i would go to a Casino there is a higher change to win some money

 

[STARSBarry]

Am I mad for considering buying some stocks in this when the market opens later today?

Yes a little, as its only just started going downwards, it might be worthwhile looking into Put options however.

 

[Guilty_AI]

Compare current valuation of around 5-6bln to Bethesda’s 7.5bln which got them multiple studios, IPs, etc. CDPR gets you one game every 4-5 years, Gwent, GOG (which is probably going to see a decline as a result of the current situation).

That'd be really sad for the PC market. I honestly care far more about GOG than I ever did Cyberpunk

 

[zwiggelbig]

investors are also quite dumb. The run up to the big ATH was all down to marketing and hype for CDPR. The run started towards e3 2018 and it kicked off after. Cyberpunk was going to be the biggest thing in gaming, polished like never seen before, doing groundbreaking things like never before yayada. And the gains cdpr made were so huge.. No way it could sustain. Even on launch day when the 8mil pre orders came out and it had 1 mil players concurrent the stock dropped 30%. Now it just dropped further due to all the shit they are getting

 

[Guilty_AI]

investors are also quite dumb. The run up to the big ATH was all down to marketing and hype for CDPR. The run started towards e3 2018 and it kicked off after. Cyberpunk was going to be the biggest thing in gaming, polished like never seen before, doing groundbreaking things like never before yayada. And the gains cdpr made were so huge.. No way it could sustain. Even on launch day when the 8mil pre orders came out and it had 1 mil players concurrent the stock dropped 30%. Now it just dropped further due to all the shit they are getting

I don't think most investors even understand the gaming market beyond E3 bullshit

 

[Champomade]

Did you factor in the speculatory sell off that occurs prior to any large announcement or release, and did you factor in the investor sell off that would’ve occurred just prior to the launch where short term investors were looking for their ROI? Without this, any inference is largely worthless.

No because it would be hard for me to quantify. Also, I am sure there are also people who buy prior to launch looking for a quick ROI as well. If it was always going one way, there would an obvious arbitrage opportunity (shorting the stock before announcement) that would ultimately even things out.

 

[eyesabitdull]

Hello GAF,

Just thought it could be interesting to share with you some crude maths I just did on the stock market impact of the arguably botched launch of this long awaited game. All figures are approximate and from public sources.

- Stock price of CD Projekt (WSE: CDR) has declined from 443 PLN per share on the 4th of December 2020 (pre-launch peak) to 250 today (and is currently continuing to decline so these are the numbers as of now but it may get much worse, or better, in the next days). That is a 44% decline, that I think is fair to assume to be virtually all attributable to the launch.
- At 443 PLN per share, the value of CDR equity was an astounding (for a company this size) USD12.2bn . Today it is USD6.9bn, i.e. a loss in equity value of slightly over USD5bn.
Going forward I assume Equity value = enterprise value, which is broadly correct here given the company seems to have little debt or cash on its balance sheet)
- What does this mean? Basically, that investors assume the Company is going to generate a net present value of 5bn less in cash flow over the course of its life (I.e. much more than 5bn but you have to account for the time value of money), If we simplify and assume 5bn of cash flow, given their very high profit margin of around 30% forecasted by analysts going forward, that means around 20bn of revenues give or take. If I assume $50 of revenues on average per game sold (in reality, not being familiar with the financials of this industry, I have no real idea how much an editor makes in revenues per copy sold, could be way less than 50, which would make the following numbers even more impressive), that means investors assume CDR will sell over 400 millions copies less of full priced AAA video games because of this launch!
- Another way to look at it is in terms of multiples of revenues. Today CDR is valued at around 10x its anticipated annual revenues going forward. Which means that a loss of 5bn in equity means investors expect CDR to do less 500 mil of revenues per year every year until the end of times than what they expected before the launch.
However, being valued at 10x revenues could still appear quite rich when compared to peers. For example Ubisoft, a company with potentially less growth but clearly less volatile and with a more diversified business model, is currently valued at 4x revenues. This means that if investors decided to value CDR the same way as Ubisoft, the share price of CDR would decline by another 60%.
- Finally, it might bring solace to frustrated gamers to remember that the biggest owners of CDR equity are still the founders and top management of the company (AFAIK). Indeed, based on public information, the founders and management still own over 30% of the stock. This means that their wealth has declined by over USD1.5bn (paper loss at the moment) over the last 2 weeks or so.

Note: I have tried to be as clear as possible so I might have simplified things a bit too much. Also, I have written this very quickly so I might edit it in the future if I think of any obvious mistake.
I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this post myself. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this post.

I truly and greatly appreciate your insight and I read every single word and feel very much interested in seeing how this would play out.

But could you please space out your paragraphs so it's more visually comprehensible?

If it wasnt because I was interested in the topic, I'd have a hard time wanting to read that wall of text.

Thanks again for your time and effort into the OP though!

 

[Champomade]

I truly and greatly appreciate your insight and I read every single word and feel very much interested in seeing how this would play out.

But could you please space out your paragraphs so it's more visually comprehensible?

If it wasnt because I was interested in the topic, I'd have a hard time wanting to read that wall of text.

Thanks again for your time and effort into the OP though!

Done, thank you

 

[Cyberpunkd]

That'd be really sad for the PC market. I honestly care far more about GOG than I ever did Cyberpunk

Agreed, I really like GOG, bought quite a number of games over there. This is another interesting thing to mention - CDPR either didn't think they will face backslash or they didn't think this will spread to GOG (plus the situation with CCP). This has the potential to impact them much more, since I do not think Gwent is making crazy money for them, and all their other games are not GAAS with monetization.

 

[Unknown?]

Time for MS to swoop in and buy it for pennies on the dollar.

So they can shut them down when they don't perform the way they want? Might as well have EA buy them.

 

[Guilty_AI]

Agreed, I really like GOG, bought quite a number of games over there. This is another interesting thing to mention - CDPR either didn't think they will face backslash or they didn't think this will spread to GOG (plus the situation with CCP). This has the potential to impact them much more, since I do not think Gwent is making crazy money for them, and all their other games are not GAAS with monetization.

I think developers of the game knew full well there'd be backlash.
This whole ordeal smells of typical investor and management shortsightedness. It was probably something like: developers at CDPR knew the game needed more time and asked to delay the game, and they got until november. Then comes close to release and they knew game still wasn't at a proper state, begged their overlords for a few more months and they only gave them 3 more weeks since they wanted the game out before the holydays. Then they released it in this state

 

[Cyberpunkd]

Then comes close to release and they knew game still wasn't at a proper state, begged their overlords for a few more months and they only gave them 3 more weeks since they wanted the game out before the holidays. Then they released it in this state

Agreed, but the interesting thing is this - out of all the consoles I don't think less than 70% is on base PS4/XBONE. Mid-gen refreshes never sell super well and next-gen is massively supply constrained and will be for months to come. So out of 41% of these 8 million preorders + all the Day 1 sales vast majority of console players would have received the game that was totally unacceptable from the user experience point of view.

 

[LazyParrot]

Do a half-assed job fixing the game, release a DLC or two, then announce Witcher 4 and watch those investors come rushing back.

 

[mckmas8808]

Compare current valuation of around 5-6bln to Bethesda’s 7.5bln which got them multiple studios, IPs, etc. CDPR gets you one game every 4-5 years, Gwent, GOG (which is probably going to see a decline as a result of the current situation).

It’s shocking how good the deal to buy Bethesda was for Microsoft.

Why do you all act like $7.5 Billion are pennies? Was it a good deal? Yes, but it's still a stupidly high amount of money to spend for a collection of games\studios.

 

[thicc_girls_are_teh_best]

Compare current valuation of around 5-6bln to Bethesda’s 7.5bln which got them multiple studios, IPs, etc. CDPR gets you one game every 4-5 years, Gwent, GOG (which is probably going to see a decline as a result of the current situation).

It’s shocking how good the deal to buy Bethesda was for Microsoft.

There's always been an argument that CDP was overvalued and the fact a single botched launch of a AAA game has caused this much damage on their stocks would more or less confirm suspicions of that argument being valid. For comparison, I don't remember Anthem tanking EA's stock prices nearly as much, and I don't think the recent failure of Avengers has sunk Square-Enix's stocks, either.

I could be wrong on those, but I didn't hear any round of articles going about of that note, although both those games costed them a nice handful of cash. If CDP were actually worth the valuation they'd been placed at, their stocks wouldn't be taking such a beating. It comes down to lack of product diversification in their product line (insofar as games they actually make); ironically most of their diversification comes from the storefront but those aren't their own games.

Why do you all act like $7.5 Billion are pennies? Was it a good deal? Yes, but it's still a stupidly high amount of money to spend for a collection of games\studios.

It wasn't just games and studios; MS also got access to various technologies they have there, such as iD's Orion streaming tech, which fits in with their Xcloud initiatives. Zenimax also can operate as its own publishing division within Microsoft's, so that increases their efforts WRT publishing and software distribution.

They had to put out $7.5 billion because other companies like Amazon and Google were likely also involved in wanting to make a purchase, and Microsoft wanted to put in an offer that'd give others cold feet in continuing bids. That said, when you look at it compared to what they potentially would've gotten with purchasing WB Games @ $4 billion or so (they wouldn't of even gotten IP rights, just timed rights to license some of them), the Zenimax purchase is an objectively much better deal.

 

[Cyberpunkd]

For comparison, I don't remember Anthem tanking EA's stock prices nearly as much, and I don't think the recent failure of Avengers has sunk Square-Enix's stocks, either.

Just checked - during Anthem's release week in 2019 the stock went from 105 to 95 USD so what you said is correct. Fair point on the lack of diversification.

 

[StreetsofBeige]

Hello GAF,

Just thought it could be interesting to share with you some crude maths I just did on the stock market impact of the arguably botched launch of this long awaited game. All figures are approximate and from public sources.

- Stock price of CD Projekt (WSE: CDR) has declined from 443 PLN per share on the 4th of December 2020 (pre-launch peak) to 250 today (and is currently continuing to decline so these are the numbers as of now but it may get much worse, or better, in the next days).
That is a 44% decline, that I think is fair to assume to be virtually all attributable to the launch.

- At 443 PLN per share, the value of CDR equity was an astounding (for a company this size) USD12.2bn . Today it is USD6.9bn, i.e. a loss in equity value of slightly over USD5bn.

Going forward I assume Equity value = enterprise value, which is broadly correct here given the company seems to have little debt or cash on its balance sheet.

- What does this mean? Basically, that investors assume the Company is going to generate a net present value of 5bn less in cash flow over the course of its life (I.e. much more than 5bn but you have to account for the time value of money).
If we simplify and assume 5bn of cash flow, given their very high profit margin of around 30% forecasted by analysts going forward, that means around 20bn of revenues give or take.
If I assume $50 of revenues on average per game sold (in reality, not being familiar with the financials of this industry, I have no real idea how much an editor makes in revenues per copy sold, could be way less than 50, which would make the following numbers even more impressive), that means investors assume CDR will sell over 400 millions copies less of full priced AAA video games because of this launch!

- Another way to look at it is in terms of multiples of revenues.
Today CDR is valued at around 10x its anticipated annual revenues going forward. Which means that a loss of 5bn in equity means investors expect CDR to do less 500 mil of revenues per year every year until the end of times than what they expected before the launch.
However, being valued at 10x revenues could still appear quite rich when compared to peers. For example Ubisoft, a company with potentially less growth but clearly less volatile and with a more diversified business model, is currently valued at 4x revenues.
This means that if investors decided to value CDR the same way as Ubisoft, the share price of CDR would decline by another 60%.

- Finally, it might bring solace to frustrated gamers to remember that the biggest owners of CDR equity are still the founders and top management of the company (AFAIK). Indeed, based on public information, the founders and management still own over 30% of the stock.
This means that their wealth has declined by over USD1.5bn (paper loss at the moment) over the last 2 weeks or so.

Note: I have tried to be as clear as possible so I might have simplified things a bit too much. Also, I have written this very quickly so I might edit it in the future if I think of any obvious mistake.
I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this post myself. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this post.

Thats not the way stock's are valued. I get what you're trying to do, but market cap based on stock price x outstanding shares, where stock price up or down makes the value of a company go up or down is basically all momentum driven based on whatever people really feel like.

For example, you should try doing your analysis based on a company with zero sales or almost zero sales but is worth billions. I follow Athira Pharma. It has zero sales, is worth a billion and each day it seems to go up or down $1.

Athira Pharma, Inc. (ATHA) Stock Price, News, Quote & History - Yahoo Finance

Find the latest Athira Pharma, Inc. (ATHA) stock quote, history, news and other vital information to help you with your stock trading and investing.

finance.yahoo.com

 

[Guilty_AI]

Agreed, but the interesting thing is this - out of all the consoles I don't think less than 70% is on base PS4/XBONE. Mid-gen refreshes never sell super well and next-gen is massively supply constrained and will be for months to come. So out of 41% of these 8 million preorders + all the Day 1 sales vast majority of console players would have received the game that was totally unacceptable from the user experience point of view.

Thats where management being short sighted comes into play. These people often don't even play games, or know anything about the gaming community. Don't see beyond charts and spreadsheets, probably took one look at the game on consoles and judged that was good enough and not worth delaying it for after christmas.

 

[mckmas8808]

It wasn't just games and studios; MS also got access to various technologies they have there, such as iD's Orion streaming tech, which fits in with their Xcloud initiatives. Zenimax also can operate as its own publishing division within Microsoft's, so that increases their efforts WRT publishing and software distribution.

They had to put out $7.5 billion because other companies like Amazon and Google were likely also involved in wanting to make a purchase, and Microsoft wanted to put in an offer that'd give others cold feet in continuing bids. That said, when you look at it compared to what they potentially would've gotten with purchasing WB Games @ $4 billion or so (they wouldn't of even gotten IP rights, just timed rights to license some of them), the Zenimax purchase is an objectively much better deal.

I agree 100% with this. But some act as if $7.5 Billion is a small number. Just because it's a great deal, doesn't make that amount smaller. And MS still needs to execute well with the new tech they've acquired. And they need to execute with Bethesda to make sure they are putting out good games. And it's super important for them to get their overall strategy right when it comes to the question of "Will their future games come out on the PS5 and Switch". They HAVE the answer that question correctly!

 

[vpance]

They went bat-shit insane, thinking that releasing a broken game to 50% of their customers would blow over. Probably even patted themselves on the back after that 8M pre-ordered tweet.

 

[Imru’ al-Qays]

- Finally, it might bring solace to frustrated gamers to remember that the biggest owners of CDR equity are still the founders and top management of the company (AFAIK). Indeed, based on public information, the founders and management still own over 30% of the stock.
This means that their wealth has declined by over USD1.5bn (paper loss at the moment) over the last 2 weeks or so.

It's so fucking funny how these tools just set their own fortunes on fire.

 

[B-universe]

It's so fucking funny how these tools just set their own fortunes on fire.

Stocks that go down can't go up?
Yeah, they're the tools and you're the genius here.
Clearly.

 

[Imru’ al-Qays]

Stocks that go down can't go up?
Yeah, they're the tools and you're the genius here.
Clearly.

Lol keep slobbering over incompetent rich guys' dicks you cuck

 

[Knitted Knight]

That stock was overvalued and propped up to hell and back even without this event (and bad launch) taking place. Overly speculated upon. Not surprised one single bit to see it drop to half (considering the news) and that's certainly not the bottom. Nature of the business tho......... not my money.

 

[B-universe]

Lol keep slobbering over incompetent rich guys' dicks you cuck

Your sex fantasies are not the subject of the thread.
Please stay on topic.

 

[Cyberpunkd]

That stock was overvalued and propped up to hell and back even without this event (and bad launch) taking place. Overly speculated upon. Not surprised one single bit to see it drop to half (considering the news) and that's certainly not the bottom. Nature of the business tho......... not my money.

I think also the expectation that the MP will be a bit like GTA Online played into that. Now nobody knows if it will even make it in the end.

 

[Champomade]

Thats not the way stock's are valued. I get what you're trying to do, but market cap based on stock price x outstanding shares, where stock price up or down makes the value of a company go up or down is basically all momentum driven based on whatever people really feel like.

For example, you should try doing your analysis based on a company with zero sales or almost zero sales but is worth billions. I follow Athira Pharma. It has zero sales, is worth a billion and each day it seems to go up or down $1.

Athira Pharma, Inc. (ATHA) Stock Price, News, Quote & History - Yahoo Finance

Find the latest Athira Pharma, Inc. (ATHA) stock quote, history, news and other vital information to help you with your stock trading and investing.

finance.yahoo.com

Not all stocks are valued using the same methodologies though.

Your example is interesting but it is a biotech stock.
If you want to read more about how biotech is generally valued

http://www.vernimmen.net/ftp/Master_Thesis_Startup_Valuation_of_Biotech_Companies.pdf

But in a nutshell, even if a company produces no revenues / cash flow today, it ultimately always comes down to the net present value of your future cash flows (which may be only 20 years from now).

CDR is not a biotech nor a start up, it is a fast growing, already profitable B2C software company.

 

[yurinka]

If instead of looking at the last few days we look at the big picture it looks like this:

For sure it's taking a big hit, but it's at aprox. the same level it was a year ago.

I assume once they address properly the refunds fiasco, they must announce that in the following months they will focus totally on fixing tons of bugs and vastly improve specially the base PS4 and XBO versions and that will pause development of the next gen console versions and post launch DLCs (free or not) until they fixed enough bugs and the PS4 and XBO version are in a good shape (also talking about performance, image quality, detail, etc) because all their resources will be put into that, delaying all paid and free post-launch DLC and the next gen console versions as much as needed while avoiding crunch: they must forbid to work more than 40 weekly hours and instead of crunch to give devs more time, hire more people and to outsource more work.

So basically to spend almost the whole H1 2021 on fixing the game, specially the XBO and PS4 versions releasing monthly patches until at least end of H1 2021, and then next gen version won't be released until at least H2 2021.

Then they also should announce that post-launch DLC content won't be developed and released until all console versions are released and in good shape, and that part -if not all- the planned paid DLC content will be free to compensate all this mess, but don't expect important post-launch content before 2022.

 

[thicc_girls_are_teh_best]

I agree 100% with this. But some act as if $7.5 Billion is a small number. Just because it's a great deal, doesn't make that amount smaller. And MS still needs to execute well with the new tech they've acquired. And they need to execute with Bethesda to make sure they are putting out good games. And it's super important for them to get their overall strategy right when it comes to the question of "Will their future games come out on the PS5 and Switch". They HAVE the answer that question correctly!

For sure it wasn't a small purchase, but in fairness there are few companies able to make that type of purchase without borrowing cash and Microsoft is one of them. If you ask me there have been much bigger and magnitudes worst purchases over the past year or so, Disney's purchase of Fox taking the crown there. Not only did they have to borrow tons of loans, but the shutdowns of theaters couldn't of come at a worst time. Same goes for their parks.

I think Microsoft will enforce more QA for Bethesda's stuff as a whole; seeing what they're doing with Halo Infinite, and some of the progress made in the December update, they are willing to give games the time to bake if required and make some tough choices at upper management of these studios...for the most part.

In terms of multi-platform releases I think it's still a complete mystery; the fact both Ghostwire and Deathloop are still coming to PS5 and timed exclusives for a year doesn't necessarily help Microsoft's optics on if those Bethesda/Zenimax games will be kept exclusive to Xbox ecosystem (which IMHO they should) or if basically cut out potential growth of their own ecosystem by putting them on PlayStation anyway, because that would show a vote of no confidence in that output growing their own Xbox, Gamepass and Xcloud pushes...which wouldn't make any sense for them given all of the pushes they're making in gaming.

 

[mckmas8808]

For sure it wasn't a small purchase, but in fairness there are few companies able to make that type of purchase without borrowing cash and Microsoft is one of them. If you ask me there have been much bigger and magnitudes worst purchases over the past year or so, Disney's purchase of Fox taking the crown there. Not only did they have to borrow tons of loans, but the shutdowns of theaters couldn't of come at a worst time. Same goes for their parks.

I think Microsoft will enforce more QA for Bethesda's stuff as a whole; seeing what they're doing with Halo Infinite, and some of the progress made in the December update, they are willing to give games the time to bake if required and make some tough choices at upper management of these studios...for the most part.

In terms of multi-platform releases I think it's still a complete mystery; the fact both Ghostwire and Deathloop are still coming to PS5 and timed exclusives for a year doesn't necessarily help Microsoft's optics on if those Bethesda/Zenimax games will be kept exclusive to Xbox ecosystem (which IMHO they should) or if basically cut out potential growth of their own ecosystem by putting them on PlayStation anyway, because that would show a vote of no confidence in that output growing their own Xbox, Gamepass and Xcloud pushes...which wouldn't make any sense for them given all of the pushes they're making in gaming.

I'm still wondering about the bolded. I think long term (say 10 years or so), It'll prove itself to be a great purchase because having full control of "IP" is a must. Content is king as they say. And if Disney+ will be everything they want it to be, Disney "should" be fine.

If they can get their membership up to 150 million people (I think they are at 85 million now) and "ONLY" increase the price to $10 a month (it's $7 right now), that'll be $1.5 Billion a month rolling in on a constant. Something Disney could have only dreamed about 10 years ago.

 

[Champomade]

If instead of looking at the last few days we look at the big picture it looks like this:

For sure it's taking a big hit, but it's at aprox. the same level it was a year ago.

I assume once they address properly the refunds fiasco, they must announce that in the following months they will focus totally on fixing tons of bugs and vastly improve specially the base PS4 and XBO versions and that will pause development of the next gen console versions and post launch DLCs (free or not) until they fixed enough bugs and the PS4 and XBO version are in a good shape (also talking about performance, image quality, detail, etc) because all their resources will be put into that, delaying all paid and free post-launch DLC and the next gen console versions as much as needed while avoiding crunch: they must forbid to work more than 40 weekly hours and instead of crunch to give devs more time, hire more people and to outsource more work.

So basically to spend almost the whole H1 2021 on fixing the game, specially the XBO and PS4 versions releasing monthly patches until at least end of H1 2021, and then next gen version won't be released until at least H2 2021.

Then they also should announce that post-launch DLC content won't be developed and released until all console versions are released and in good shape, and that part -if not all- the planned paid DLC content will be free to compensate all this mess, but don't expect important post-launch content before 2022.

USD5bn loss still looks like big picture to me!

 

[paypay88]

game's content is top notch. As soon as technical issues are cleared out it will be 10/10. And trannyera will seethe.
not to forget expansions and multiplayer mode.

 

[yurinka]

USD5bn loss still looks like big picture to me!

Sure! And won't stop here, it will drop more. They're getting a big kick in the balls.

 

[MrFunSocks]

I hope no one ever hires you as an analyst, cause that’s a terrible take on the situation.

 

[Chris_Rivera]

Meh - just care about the upcoming DLC whenever it drops. Or maybe a sequel.

It was I’m sure they’ll announce the Cyberpunk 2 any day now

 

[Great Hair]

Sure! And won't stop here, it will drop more. They're getting a big kick in the balls.

Then Microsoft will swoop in and grab them by the penis, and make them an offer they can not refuse. They´re lowering their value, so they can be bought by MS!!! I KNEW IT.

 

[Champomade]

I hope no one ever hires you as an analyst, cause that’s a terrible take on the situation.

Care to explain why?

 

[Champomade]

I hope no one ever hires you as an analyst, cause that’s a terrible take on the situation.

CD Projekt Loses a Third of Its Value on Game Bugs, Refunds

CD Projekt SA shares plunged for a third straight session after a slew of technical glitches in its long-awaited Cyberpunk 2077 game led the Polish developer to apologize and offer refunds to dissatisfied console gamers.

www.bloomberg.com

Some analysts who agree

 

[CuNi]

I hope no one ever hires you as an analyst, cause that’s a terrible take on the situation.

15 people likes his post. Can't say the same about yours.

 

[Sejan]

Compare current valuation of around 5-6bln to Bethesda’s 7.5bln which got them multiple studios, IPs, etc. CDPR gets you one game every 4-5 years, Gwent, GOG (which is probably going to see a decline as a result of the current situation).

It’s shocking how good the deal to buy Bethesda was for Microsoft.

I think this mostly goes to show how overvalued CDPR is as a company. Bethesda had more studios, more properties and more sales. The biggest asset that CDPR controls is likely GoG.

I guess that this shows investors are just as susceptible to overhype as gamers.

 

[thicc_girls_are_teh_best]

I'm still wondering about the bolded. I think long term (say 10 years or so), It'll prove itself to be a great purchase because having full control of "IP" is a must. Content is king as they say. And if Disney+ will be everything they want it to be, Disney "should" be fine.

If they can get their membership up to 150 million people (I think they are at 85 million now) and "ONLY" increase the price to $10 a month (it's $7 right now), that'll be $1.5 Billion a month rolling in on a constant. Something Disney could have only dreamed about 10 years ago.

Here's the question though: how many of those 85 million are concurrent subscribers? How many of them are on from that Verizon bonus thing they had going? How many are free trials? We'll never probably know the answer to those questions because being it's a streaming platform, these companies are able to mask any numbers they want.

And the same can be said of any streaming platform really; Netflix, HBO Max, or gaming ones like Gamepass, PS Now (tho that isn't really a streaming platform per-se like most of these others), Stadia, Luna etc. Their numbers are probably almost always a mixture of concurrent full subscribers, subs on discounts, free trials etc.

For the non-gaming ones, the irony in film theaters possibly sadly dying off (they don't HAVE to die off, there's plenty of options to keep them around, revive them etc. but I think there's other reasons these companies want theaters out of the picture) will boost attention to subscription services. So maybe it'll be possible for them to hit these higher numbers, as people are basically getting funneled to them if theaters are closed, television is dying, etc. That same factor also benefits game streaming platforms too.

The real benefits will be had with those that can bundle game streaming and media streaming into one package. That's why everyone needs to keep an eye out for Amazon, they already make their own content, they can tie Luna in with Prime and Firestick thumbs/tablets, and throw in discounts for item purchases all in one package. Very strong value proposition. Next in line would theoretically be Sony, if they had an actual answer to something like Gamepass. They basically purchased Funimation (I'm worried about that, but that's another discussion), they make their own films and television shows, music through the record label etc. They could tie all that in with PlayStation Play.Stream or whatever they want to call it, also throw in on-release streaming of theatrical film VODs like what Disney's trying to do, etc.

I actually think diversification of content outside of just games for streaming is something Microsoft needs to consider a lot more of, because if someone like Amazon or especially Sony can make a viable Gamepass alternative and also integrate movie/television/music content into that, it will put Microsoft into a very tough situation. But that bundling of media & game content, that's honestly how you hit the huge numbers. It's probably too late for companies like Microsoft and Google to start up film or television production studios, but I guess they can partner with Disney, Time Warner and/or Netflix..they might be forced to in a few years to stay competitive (especially if, again, Amazon really steps up their game output or particularly, if Sony gets serious with streaming and bundles in media streaming with PlayStation gaming content).

 

[Rikkori]

What are you trying to get across, I don't get it? For the company itself this literally changes nothing because as you've said there's 0 debt but there's plenty of reserves, and the launch of the game will have injected shit-loads of eddies (even with refunds), and since management still is a majority shareholder... what's your point? Oh no, on paper losses. The sky is falling.

 

[MrFunSocks]

15 people likes his post. Can't say the same about yours.

Lol 15 people who would also make terrible analysts.

CD Projekt Loses a Third of Its Value on Game Bugs, Refunds

CD Projekt SA shares plunged for a third straight session after a slew of technical glitches in its long-awaited Cyberpunk 2077 game led the Polish developer to apologize and offer refunds to dissatisfied console gamers.

www.bloomberg.com

Some analysts who agree

I don’t disagree that their share price dropped by a third. I disagree with pretty much everything else that you took that as meaning. You don’t seem to take into account things like shareholders selling stocks when they’re high, like oh I don’t know, right before the release of a massive game? That generally makes the price drop. Why you extrapolated the old price vs the new price and used it to say they’ve just lost 500 million game sales or whatever you were saying I don’t know. That doesn’t make any sense.

CDPR lost nothing that actually matters.