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Cyberpunk’s PlayStation Return No Quick Fix for Polish Studio

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(Bloomberg) -- Hours after Sony Group Corp. announced the return of Cyberpunk 2077 to its flagship online store investors seem unconvinced that the awaited development will have a bigger financial impact on the Polish studio that created the game.

The game’s reinstatement to the PlayStation store will help CD Projekt SA with the marketing of Cyberpunk but may not make much of a difference for its bottom line until a new version of the futuristic role-playing game is ready, according to BOS Bank SA analyst Tomasz Rodak. There are also doubts over the scale of pent-up demand for the game, which was full of glitches when it first came out in late 2020, said Matti Littunen, an analyst at Bernstein Autonomous LLP.

CD Projekt shares jumped as much as 6.4% following the PlayStation news, which was announced after European trading hours on Tuesday. But the stock quickly gave back gains and traded 3.6% lower at 12:16 p.m. in Warsaw. It’s still up 13% so far in June -- on track for its best monthly performance since November.

Sony itself appeared not fully convinced by the game’s reliability, warning that users “will continue to experience performance issues” on its popular PlayStation 4 model and recommended its most advanced consoles, Eurogamer website reported.

“Traders were betting on Cyberpunk coming back to the PlayStation store in recent weeks, and the stock rose despite still weak fundamentals,” BOS’s Rodak said by phone. “And now we have a sell-on-the-news move.”

Widespread Complaints

One of the most anticipated games of 2020, Cyberpunk was pulled from the PlayStation store shortly after it was released last December following widespread user complaints. CD Projekt, which also offered refunds for the $60 game, has since been working on fixing the bug-ridden title and it will be reinstated June 21, according to a regulatory filing Tuesday.

After eight years in development and starring Keanu Reeves in the title role, Cyberpunk was expected to be a blockbuster hit for CD Projekt, which only releases games every few years. Instead, its deputy Chief Executive Officer Marcin Iwinski was forced to apologize for a product that “did not meet the quality standard we wanted to meet.” Employees said the game was rushed and accused the company of focusing on marketing at the expense of development, Bloomberg has reported.

Sony took the unprecedented step of removing it from its shop and offered full refunds. Microsoft Corp. also offered refunds on the Xbox store, though it didn’t pull the game. The poor reception sent the shares of CD Projekt tanking. Once Poland’s most valuable company, based on the anticipation of Cyberpunk’s release, CD Projekt lost about half its value.

The company’s shares jumped in Warsaw earlier Tuesday after the PlayStation store added a new “wishlist” button for the Cyberpunk game, a step toward reinstating the title. PlayStation also shut down a special website, effective June 18, which facilitates refunds for disgruntled players.

The Cyberpunk fiasco wrecked CD Projekt’s reputation among gamers and investors, especially after the studio hyped the game as the next global blockbuster and one of the most sophisticated role-playing games ever. But its complexity appears to have overwhelmed the company, which postponed the release three times and perhaps should have waited even longer.

After reporting record profit in April of 1.15 billion zloty ($310 million) for all of 2020, fueled by Cyberpunk pre-orders and early sales, CD Projekt’s first-quarter net income missed street estimates by 62%, highlighting the studio’s woes.

The company didn’t report Cyberpunk sales figures for the first quarter of 2021, saying no milestones were reached after it sold 13.7 million copes last year -- compared with 28 million of its latest edition of the company’s Witcher medieval fantasy game.

“There’s a lot more at stake here than just incremental sales,” Bernstein’s Littunen said. “This is about CD Projekt’s reputation.”

(Updates with share price, Sony and analysts comments from 1st paragraph)

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