Company report

and target market

PESTEL

Company:
CD Projeсt Red (CDPR)

Authors:
Dmytro Halchuk 231989, Andriy Krutous 230833, Anton
Khmarskyi 230940, Mykhailo Karaush 232946

Leading author’s e-mail:

231989@student.uek.krakow.pl
Content
A. The company today............................................................................................................................3
Introduction – basic company information........................................................................................3
1. Products and services.................................................................................................................4
2. The industry of the current operation........................................................................................5
3. Market position..........................................................................................................................7
4. Competitive adventage..............................................................................................................9
5. Human resources......................................................................................................................10
6. Main assets...............................................................................................................................11
7. SWOT........................................................................................................................................13
8. Financial analysis (the last 3 years)...........................................................................................14
B. Future project..................................................................................................................................16
1. The idea of the project and its support....................................................................................16
2. Target market analysys.............................................................................................................17
3. PESTEL of the target market.....................................................................................................18
4. Project Financial projection......................................................................................................20
Bibliography.........................................................................................................................................21
A. The company today

Introduction – basic company information

CD Projekt Red: Polish Powerhouse for Story-Driven Games

CD Projekt Red is a pressure to be reckoned with within the gaming industry. This Polish
developer has carved a spot for itself by using crafting critically acclaimed, tale-pushed RPGs
(position-playing games) that emphasize player business enterprise and rich global-building.
Their crown jewel is for sure The Witcher collection, tailored from the myth novels of
Andrzej Sapkowski. The Witcher games big name Geralt of Rivia, a monster hunter for lease,
and take gamers on a interesting journey via a morally complex international packed with
memorable characters. Beyond The Witcher, CD Projekt Red has dabbled in different genres.
Cyberpunk 2077, their present day name, throws players in dystopia of Night City. Here,
gamers carve their own direction in a sprawling open world, encountering particular
characters and going through the results in their selections.

What makes CD Projekt Red stand out? Focus on narrative: CD Projekt Red prioritizes
compelling testimonies with participant preference impacting the narrative and
international. They're not frightened of mature issues and complex characters. World-
building excellence: Their games are meticulously crafted, with wealthy lore, specified
environments, and immersive settings that players can clearly wander off in. Innovation and
ambition: CD Projekt Red isn't afraid to push boundaries and test with new mechanics and
storytelling techniques. While now not without its demanding situations, CD Projekt Red has
installed itself as a main developer recognised for its determination to great and
revolutionary storytelling. Their video games offer greater than simply enjoyment; they're
interactive studies that live with gamers long after the credit roll.

Sources: https://www.cdprojekt.com/en/capital-group/history/ #:~:text=

%E2%80%93%20For%20me%2C%20this%20is%20a,games%20be loved%20by%20millions
%20globally. https://study.gov.pl/news/poland-leading-way-gaming-industryhow#:~:text=CD
%20Projekt%™20Red%20is%20now,the%20Stoxx%20Europ e%20600%20Index.
https://www.gamesindustry.biz/how-cyberpunk-2077-shaped-cd-projektreds-approach-to-
leveldesign#:~:text=These%20three%20core%20principles%20focused,caterin g%20levels
%20to%20specific%20playstyles.
 1. Products and services
Products and Services of CD Projekt Red: A Gamer's Delight CD Projekt Red isn't just a
developer; they wear multiple hats inside the gaming global.

1. Video games: As mentioned The Witcher series: is the most popular product. They
providing significantly acclaimed RPGs like The Witcher three: Wild Hunt, following Geralt of
Rivia's monster-slaying adventures in a richly particular delusion world. Cyberpunk 2077:
Their brand new name, a deep dive into the neon-lit cyberpunk city of Night City, supplying
an openinternational RPG revel in with branching storylines and participant preference
impacting the arena. GWENT: The Witcher Card Game: This unfastened-to-play virtual card
sport, also to be had for cell, takes vicinity within The Witcher universe. Players collect
playing cards presenting characters and creatures, building decks for strategic on line battles.

2. Merchandise: CD Projekt Red caters to fans through their on line shop, supplying a
number of merchandise. This consists of clothing, collectible figurines, soundtracks, and
other collectibles based on their famous game franchises.

3. Limited Services: CD Projekt Red GO Galaxy: An elective launcher for PC users to install,
play, and update their CD Projekt Red games.

Sources: https://www.cdprojekt.com/en/media/news/official-cdprojekt-red-merchandise-
store-is-now-open/
https://apps.apple.com/us/app/gwent-the-witcher-cardgame/id1466943149
https://www.hp.com/us-en/shop/tech-takes/ cyberpunk-2077-complete-preview
https://www.gamesfinity.com/editorial/the-witcher-3-wildhunt-the-choice-driven-rpg-that-
changed-the-gaming-industry/
 2. The industry of the current operation
CD Projekt Red thrives in a vast constantly growing video game industry. In this competitive
environment CD Projekt Red has positioned itself as an organization renowned for high
quality story-based role playing games (RPGs) that have great replay value and player choice.
They separate themselves by concentrating on delivering immersive entertainment.

Market Size and Growth: At present, the global gaming industry is huge and has reached
over $200 billion in 2023. This means that it will continue to grow because of mobile gaming,
esports, virtual reality among others.

Key Players: Many players have crowded this sector. These are some of the heavyweights in
the field: CD Projekt Red, Rockstar Games, Naughty Dog, Bethesda Softworks.

Publishers: Electronic Arts (EA), Activision Blizzard, Ubisoft and Sony Interactive
Entertainment (SIE) are such giants who fund marketing or distributing any other person's
game or their own studios.

Hardware Manufacturers: Consoles players use are made by companies like PlayStation
(Sony), Xbox (Microsoft), Nintendo Switch (Nintendo). Moreover, PC hardware giants Nvidia
AMD embody important roles.

Esports Organizers: Worldwide viewership of millions is attracted by professional esports

tournaments organized by organizations as ESL FACEIT etc.

Market Segments: There are a number of different segments to which the video game
industry caters; Console Games: Traditional games for playing on dedicated consoles such as
PlayStation, Xbox or Switch. PC Games: Computer games for personal computers. Mobile
Games: Titles designed for smartphones and tablets that form a rapidly growing segment.
Virtual Reality (VR) Games: VR headsets provide an immersive experience in this area that is
starting to flourish.

Competition is Fierce: CD Projekt Red among other developers tries very hard to draw
players’ attention. Here's how they engage with ccompetition: Game Quality and Innovation:
Important aspects include interactive storytelling, innovative gameplay mechanics, and
excellent visuals. Marketing and Hype: This encompasses trailers, announcements and
influencer marketing which can result in enormous anticipation. Platform Exclusivity: An
advantage may be obtained by gaining exclusive rights to release a product on a particular
platform. Genre and Market Focus: It is imperative to know who your users are, hence
catering specifically for RPGs, shooters or strategy games markets .

Sources: https://newzoo.com/resources/blog/newzoo-games-marketnumbers-revenues-
and-audience-2020-2023 https://www.financialexpress.com/business/digitaltransformation-
interactive-gaming-experiencesrevolutionising-gaming-industry-with-virtual-reality-341
1796/ #:~:text=interactive%20gaming%20experiences%20have%20 become,in%20the
%20years%20to%20come. https://eslfaceitgroup.com/blog/2020/10/esl-proleague-2020-
shatters-viewership-records/
 3. Market position
As of April 2024 CD Projekt has a market cap of $2.93 Billion. This makes CD Projekt the
world's 3502th most valuable company by market cap according to our data. The market
capitalization, commonly called market cap, is the total market value of a publicly traded
company's outstanding shares and is commonly used to measure how much a company is
worth.

Strengths and Specialties:

The Powerhouse of Storytelling: This is a developer who makes highly celebrated role-
playing games that are storydriven, featuring strong narratives, and in which player choices
have far-reaching impact.

Expertise in World-Building: The developers’ games are well known for having intricate
worlds, elaborate settings and enthralling mythology where players can truly lose
themselves.

Strong Brand Equity: Creating the Witcher series has made CD Projekt RED a top class game
developer with an ardent following across the globe.

Player Agency Focus: Games developed by this studio emphasize players making choices that
matter most thus creating a more interactive and immersive gaming experience.

Market Segment and Competition:

Core Audience: The company’s main target audiences are gamers who want to play RPGs
which are rich in stories. This puts them in competition with other developers such as
BioWare, Bethesda Softworks and Larian Studios amongst others.

Genre Focus: By concentrating on RPGs they have specialized within the larger video game
industry that sees different categories like sports games, shooters or mobile titles amongst
others. G

Global recognition: CD Projekt Red, although a Polish developer, has a world reach. Not only
are their video games performed across the sector, but additionally they actively
marketplace to worldwide audiences. The organization has the potential of becoming a
pinnacle participant in the global online game markets, however this may probably require
persevered recognition on freeing stunning video games or even expanding their genre focus
and venturing into new enterprise models like cloud gaming.

Sources: https://www.cdprojekt.com/en/capital-group/history/ #:~:text=This%*20was

%20the%20pinnacle%20of, The%20Witc her%203%3A%20Wild%20Hunt.
https://www.cdprojektred.com/en/ team#:~:text=Artists%20at%20CD%20PROJEKT
%20RED,lasti ng%20impact%*20o0n%20every%20release.
https://companiesmarketcap.com/cd-projekt/marketcap/
 4. Competitive adventage
CD PROJEKT RED, the renowned video game developer, has several competitive advantages
that set it apart in the industry:

Quality Focus: CD PROJEKT RED is deeply committed to delivering high-quality games

throughout the entire development and service process. This dedication ensures their games
meet high standards and resonate with players.

Creative Independence: Unlike many major game companies, CD PROJEKT RED maintains
control over every stage of game creation, from initial design to technology, publishing,
promotion, distribution, and community relations. They take a hands-on approach.

Financial and Creative Autonomy: The company retains both financial and creative
independence, allowing them to make decisions based on their own vision rather than
ccc96% revenue from international sales, it is influential worldwide. Exports contribute
significantly to the group's sales figures, ensuring a vast global presence.

Sources: https://www.cdprojekt.com/en/capital-group/businessmodel/
https://relevant.at/2013/04/11/new-market-research-reportcd-projekt-red-sa-cdr-financial-
and-strategic-swot-analysisreview/
5. Human resources

1. HR Department: The HR department at CD Projekt Red is led by Marta Fortuna, who

serves as the Vice President of Human Resources. The department comprises 45
employees.

2. Overall Employee Count: As of the end of H1 2022, CD Projekt Red employed a total
of 1,211 employees.

3. Management Structure: The management team includes key individuals such as:
Piotr Karwowski: Joint Chief Operating Officer Adam Badowski: Joint CEO and
Member of the Board at CD Projekt Red Marcin Przybylowicz: Composer and Music
Director.

4. Recent Developments: In the first half of 2022, CD Projekt Red achieved significant
milestones: Released a dedicated next-gen console edition of Cyberpunk 2077 along
with Patch 1.5 across all supported platforms. Entered into a strategic partnership
with Epic Games, enabling the use of Unreal Engine in future game development
projects. Announced work on another game in The Witcher series.

5. Benefits and Perks for the employee: To provide all the features needed to make a
game. Our company works hard to make sure that workers have everything they
need for comfortable work and the advancement of our projects.

6. We plan to continue growing our team and filling positions with developers,
designers, HR managers, and other roles.

Sources: https://rocketreach.co/cd-projekt-red-hrdepartment_b5c5095cf42e0dcc
https://rocketreach.co/cd-projekt-redmanagement_b5c5095cf42e0dcc
https://www.cdprojekt.com/en/media/news/cd-projekt-redorganizational-update/
https://www.cdprojektred.com/en/perks-and-benefits
 7. Main assets
Tangible Assets:

Statues and Replicas: CD PROJEKT RED offers a variety of collectible statues and replicas
associated with their games. These physical objects are to be had for buy via the CD
PROJEKT RED Gear Store

1. Development Machines and Equipment: As a recreation improvement studio, CD

PROJEKT RED probably possesses a variety of hardware and software gear used for
recreation introduction, such as powerful computer systems, consoles, and
specialized peripherals.
 Office Spaces and Facilities: The business enterprise operates workplaces and
studios in which their groups paintings on sport improvement, advertising and
marketing, and different activities.

Intangible Assets:

Intellectual Property (IP): CD PROJEKT RED owns valuable IP rights to their sport franchises,
which includes The Witcher collection and Cyberpunk 2077. These rights encompass
characters, storylines, and recreation mechanics.

Software Licenses: The licenses for game engines (which include Unreal Engine for upcoming
initiatives) and different software tools used in development are vital intangible belongings.
Trademarks and Copyrights: CD PROJEKT RED’s logos shield their emblem identity, while
copyrights cover their sport content, music, and art work.

Patents (if relevant): While not explicitly cited in the available statistics, patents related to
unique recreation mechanics or technology will be a part of their intangible assets.

Financial Assets:

Cash and Cash Equivalents: As of December 2023, CD PROJEKT RED had full-size financial
belongings, along with coins, bank deposits, and other liquid assets

Treasury Bonds: These are low-threat, interest-bearing securities that make a contribution to
the organization's monetary stability.

Development Projects: CD PROJEKT RED is actively engaged in several ongoing sport

improvement tasks:

Polaris: A venture in pre-manufacturing.

Orion: Another task in pre-production. Hadar: A new IP concept section.

The Witcher Remake: Developed by way of Fool’s Theory and supported by CD PROJEKT
RED.
Sirius: Developed by means of CD PROJEKT RED.

Phantom Liberty: An growth associated with Cyberpunk 2077.

Other Projects: These include studies stages for future endeavors

Sources: https://gear.cdprojektred.com/collections/statues-replicas
https://www.cdprojekt.com/en/investors/financial-summaryreport/
 8. SWOT
Strengths:

1. Experts in game creation: CD Projekt Red boasts strong expertise in creating and
distributing video games.
2. REDengine software: Their proprietary software, REDengine, aids in developing
complex and high-quality role-playing games.
3. GOG GALAXY 2.0: Their proprietary software facilitates game access across different
platforms.
4. Innovations: CD Projekt Red has a successful track record of bringing innovative
games to the market.

Weaknesses:

1. Marketing costs: Expenditure on product marketing is a significant cost that has been
rising year to year.

Opportunities:

1. Growing consumer demand: The increasing interest in gaming content presents an

opportunity for CD Projekt Red.
2. Skilled employee: Availability of skilled software engineers and game designers fuels
startup growth in the gaming industry.
3. E-sports evolution: The rise of e-sports as a profession makes the gaming industry a
reliable career option.

Threats:

1. Competition: The gaming industry is highly competitive, with other studios vying for
market share.
2. Market trends: Keeping up with evolving trends and consumer preferences is crucial.
3. External factors: Economic fluctuations, technological changes, and geopolitical events
can impact the industry.

Sources: https://www.swotandpestle.com/cd-projekt/
https://relevant.at/2013/04/11/new-market-research-reportcd-projekt-red-sa-cdr-
financial-and-strategic-swot-analysisreview/ https://prezi.com/zfdy_bkjctdj/cd-projekt-
red-analiza-swot/
 5. Financial analysis (the last 3 years)
Sales Revenues:

2021 2022 2023

$888,172,000 $952,576,000 $1,309,459,000

EBIT (Earnings Before Interest and Taxes)

2021 2022 2023

$232,903,000 $377,347,000 $469,040,000

Profit Before Taxation

2021 2022 2023

$219,108,000 $393,185,000 $538,492,000

Net Profit from Continuing Operations

2021 2022 2023

$208,908,000 $347,093,000 $481,105,000

Total Assets (as of December 31, 2023): $2,613,438

Equity (as of December 31, 2023): $2,403,490 As of 31 December 2023

The aggregate value of Cash and cash equivalents, Bank deposits (maturity beyond 3
months) and other liquid financial assets i.e. treasury bonds was 1 309 459 thousand PLN.

Sources: https://www.cdprojekt.com/en/investors/financial-summaryreport/
https://www.gamespot.com/articles/cd-projekt-red-reportsmajor-profit-and-revenue-
growth-year-on-year/1100-6512858/ https://www.cdprojekt.com/en/wp-content/uploads-
en/ 2023/11/cd-projekt-group-presentation-q3-2023-earnings.pdf
https://investgame.net/news/cd-projekt-red-q1-23-financialresults-overview/
B. Future project
1. The idea of the project and its support
Our company aims to establish a robust and competitive cloud gaming service in Singapore,
catering to the growing demand for high-quality gaming experiences without the need for
expensive hardware. Leveraging Singapore's strategic location and advanced IT
infrastructure, we will offer a seamless and immersive gaming experience to users across the
region.

The gaming industry is experiencing a paradigm shift towards cloud-based gaming services,
driven by advancements in internet technology and increasing consumer demand for
convenience and accessibility. Singapore, as a global hub for technology and innovation,
presents an ideal market for launching cloud gaming services due to its high internet
penetration rate and tech-savvy population. We plan to establish ourselves there and further
develop in the cloud gaming and technology spaces. It is possible to advertise with the most
popular Singaporean influencers and create exclusive offers for regular users to make our
service stand out from other competitors.
 2. Target market analysys
 Demand: The demand for cloud gaming services is steadily increasing, fueled by factors
such as rising disposable income, proliferation of smartphones, and growing interest in
gaming among diverse demographic groups.

 Competition: While there are existing players in the cloud gaming market globally, the
Singaporean market offers opportunities for differentiation and innovation. However,
competition from established providers and potential regulatory challenges should be
considered.

 Chinese market: By using Singapore like country where we going to place servers we will
get straight line to China game market and Chinese users of cloud game service, based on
this we will get a lot of money if we include games preferred in Asian countries in our cloud
game service.

 New Users: With proper marketing, we can attract people who aren't really interested in
technology. We advertise our cloud service as a solution for travelers and people who do not
have access to a computer. And just for families or groups of friends who decided to play
team games to brighten up their evening.
 3. PESTEL of the target market

PESTEL

P Political
E Economical
S Social
T Technological
E Environmental
L Legal

1. Political Factors:
 Stability: Singapore is known for its stable political environment with a strong
government that supports business-friendly policies and initiatives.
 Regulatory Environment: The government of Singapore maintains strict regulations
and policies governing various sectors, including technology, telecommunications,
and gaming.
 International Relations: Singapore's diplomatic relations with other countries can
influence business operations, trade agreements, and market dynamics.
2. Economic Factors:
 Growth and Stability: Singapore boasts a robust and resilient economy
characterized by steady GDP growth, low unemployment rates, and stable inflation.
 Trade and Investment: As a global financial hub and trading center, Singapore offers
attractive opportunities for foreign investment, fostering a vibrant business
ecosystem.
 Currency Fluctuations: Exchange rate fluctuations can impact the cost of goods and
services, affecting businesses engaged in international trade and transactions.
3. Social Factors:
 Diverse Population: Singapore is home to a diverse population comprising various
ethnicities, cultures, and languages, influencing consumer preferences, behavior, and
market trends.
 Education and Workforce: Singapore places a strong emphasis on education and
skills development, resulting in a highly educated and skilled workforce adept at
adopting new technologies and innovations.
  Lifestyle and Consumption Patterns: Changing demographics and lifestyle
preferences shape consumer demand for products and services, including
entertainment and gaming experiences.
4. Technological Factors:
 Advanced Infrastructure: Singapore boasts advanced telecommunications and
digital infrastructure, including high-speed internet connectivity and widespread
adoption of mobile technology, facilitating the delivery of cloud gaming services.
 Innovation and R&D: Singapore invests heavily in research and development (R&D)
initiatives, fostering a culture of innovation and technological advancement that can
drive the growth of the gaming industry.
 Data Privacy and Security: Technological advancements also raise concerns about
data privacy and cybersecurity, necessitating robust measures to protect user data
and ensure regulatory compliance.
5. Environmental Factors:
 Sustainability Initiatives: Singapore has implemented various sustainability
initiatives and regulations aimed at preserving the environment and promoting eco-
friendly practices across industries.
 Climate Change Risks: Although Singapore is relatively immune to natural disasters,
climate change can pose risks such as rising sea levels and extreme weather events,
which may impact infrastructure and operations.
6. Legal Factors:
 Intellectual Property Protection: Singapore has strong intellectual property laws
and regulations to protect the rights of content creators and developers, including
those in the gaming industry.
 Compliance Requirements: Businesses operating in Singapore must adhere to
various legal and regulatory requirements, including licensing, taxation, and
consumer protection laws.
 Gaming Regulations: Specific regulations govern the gaming industry in Singapore,
including age restrictions, content censorship, and licensing requirements, which may
impact the operation of cloud gaming services.
 1. Project Financial projection
(at least ARR, PP, NPV, IRR)

ARR:

As of 6.04.2023 CD Project Red has sold in total over 85 million copies of their products.

• During the first year of the service's launch, we want to obtain at least 7% (6 million) of our
clients to sign up for our cloud gaming subscription.
• The subscription costs $7,99/month

So, in essence we would earn 6 000 000 * 7,99 = $47 940 000 per month,

And 47 940 000* 12 = $575 280 000 per year in best case
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