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CD Projekt

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CD Projekt S.A.
Public
Traded asWSECDR
ISINPLOPTTC00011
IndustryVideo games
FoundedMay 1994; 26 years ago (1994-05)
Founders
  • Marcin Iwiński
  • Michał Kiciński
Headquarters,
Poland
Area served
Worldwide
Key people
  • Adam Kiciński (president, CEO)
  • Marcin Iwiński (CEO)
  • Piotr Nielubowicz (CFO)
Products
RevenueIncrease 521.2 million (2019)[1][2]
Increase 189.1 million zł (2019)[1][2]
Increase 175.3 million zł (2019)[1][2]
Total assetsIncrease 1.404 billion zł (2019)[1][2]
Total equityIncrease 1.105 billion zł (2019)[1][2]
OwnerMarcin Iwiński & Michał Kiciński (23.5%)
Piotr Nielubowicz (6.38%)[3]
Number of employees
Increase 1,111 (2019)[4]
Subsidiaries
Websitecdprojekt.com

CD Projekt S.A. (Polish: [ˌt͡sɛˈdɛ ˈprɔjɛkt]) is a Polish video game developer, publisher and distributor based in Warsaw, founded in May 1994 by Marcin Iwiński and Michał Kiciński. Iwiński and Kiciński were video game retailers before they founded the company, which initially acted as a distributor of foreign video games for the domestic market. The department responsible for developing original games, CD Projekt Red, best known for The Witcher series, was formed in 2002. In 2008, CD Projekt launched the digital distribution service GOG.com (originally as Good Old Games).

The company began by translating major Western video-game releases into Polish, collaborating with Interplay Entertainment for two Baldur's Gate games. CD Projekt was working on the PC version of Baldur's Gate: Dark Alliance when Interplay experienced financial difficulties. The game was cancelled and the company decided to reuse the code for their own video game. It became The Witcher, a video game based on the works of Andrzej Sapkowski.

After the release of The Witcher, CD Projekt worked on a console port called The Witcher: White Wolf; but development issues and increasing costs almost led the company to the brink of bankruptcy. CD Projekt later released The Witcher 2: Assassins of Kings in 2011 and The Witcher 3: Wild Hunt in 2015, with the latter winning various Game of the Year awards. The company's upcoming project is Cyberpunk 2077, an open-world role-playing game based on the Cyberpunk 2020 tabletop game system, for which it opened a new division in Wrocław.

A video game distribution service, GOG.com was established by CD Projekt to help players find old games. Its mission is to offer games free of digital rights management (DRM) to players and its service was expanded to cover new AAA and independent games. The company opposes DRM in video games, and hopes that free downloadable content becomes an industry standard. CD Projekt considers maintaining their independence one of their most important strategies. By September 2017, it was the largest publicly traded video game company in Poland, worth about US$2.3 billion,[7] and by May 2020, had reached a valuation of US$8.1 billion, making it the largest video game industry company in Europe ahead of Ubisoft.[8] CD Projekt joined WIG20, an index of the 20 largest companies on the Warsaw Stock Exchange, in March 2018.[9]

History[edit]

Founding[edit]

Man in a T-shirt giving a talk
CD Projekt co-founder Marcin Iwiński in 2011

CD Projekt was founded in May 1994 by Marcin Iwiński and Michał Kiciński.[10] According to Iwiński, although he enjoyed playing video games as a child they were scarce in Poland (which was in the Soviet Union's sphere of influence at the time). Marcin Iwiński, in high school, sold cracked copies of Western video games at a Warsaw marketplace.[11] In high school, Iwiński met Kiciński, who became his business partner; at that time, Kiciński also sold video games.[12]

Wanting to conduct business legitimately, Iwiński and Kiciński began importing games from US retailers and were the first importers of CD-ROM games.[13] After Poland's transition to a primarily market-based economy in the early 90s, they founded their own company. Iwiński and Kiciński founded CD Projekt in the second quarter of 1994. With only $2,000, they used a friend's flat as a rent-free office.[11][12]

Localization[edit]

When CD Projekt was founded, their biggest challenge was overcoming video game piracy. The company was one of the first in Poland to localize games; according to Iwiński, most of their products were sold to "mom-and-pop shops". CD Projekt began partial localization for developers such as Seven Stars and Leryx-LongSoft in 1996, and full-scale localization a year later.[14] According to Iwiński, one of their first successful localization titles was for Ace Ventura; whereas previous localizations had only sold copies in the hundreds, Ace Ventura sold in the thousands, establishing the success of their localization approach.[15] With their methods affirmed, CD Projekt approached BioWare and Interplay Entertainment for the Polish localization of Baldur's Gate. They expected the title to become popular in Poland, and felt that no retailer would be able to translate the text from English to Polish. To increase the title's popularity in Poland, CD Projekt added items to the game's packaging and hired well-known Polish actors to voice its characters. Their first attempt was successful, with 18,000 units shipped on the game's release day (higher than the average shipments of other games at the time).[11][12]

The company continued to work with Interplay after the release of Baldur's Gate, collaborating on a PC port for the sequel Baldur's Gate: Dark Alliance. To develop the port, CD Projekt hired Sebastian Zieliński (who had developed Mortyr 2093-1944) and Adam Badowski. Six months after development began, Interplay experienced financial problems and cancelled the PC version. CD Projekt continued to localize other games after Dark Alliance's cancellation, and received Business Gazelle awards in 2003 and 2004.[16]

CD Projekt Red[edit]

The words "CD Projekt Red" appear right of a red-and-black bird
CD Projekt Red's logo since May 2014

Enthusiasm for game distribution ebbed, and CD Projekt's founders wondered if the company should continue as a distributor or a game developer after Dark Alliance's cancellation. With the game cancelled and its code owned by CD Projekt, the company planned to use them to develop their first original game.[11][12] They intended to develop a game series based on Andrzej Sapkowski's Wiedźmin books (which were popular in Poland) and the author accepted the company's development proposal. The franchise rights had been sold to Metropolis Software in 1997 and a playable version of the first chapter was made, but then left abandoned.[17] CD Projekt acquired the rights to the Wiedźmin franchise in 2002. According to Iwiński, he and Kiciński had no idea how to develop a video game at that time.[12]

CD Projekt Red created a demo in a year. "It was a piece of crap," chuckles Adam Badowski. "We tried to convince Marcin and Michal not to go on the first business trip with the demo, but they decided..." to show it to a dozen publishers all around Europe on the most expensive and powerful laptop money could buy, Iwiński fills in. After two weeks of meetings we get two emails saying, in a very nice British way, "It's not so good". So pretty much: "Boys, go home". We were shattered. We were like, "Oh my god we suck".

— CD Projekt co-founder Marcin Iwiński, on publisher rejection of the Witcher demo[12]

To develop the game, the company formed a video-game development studio (CD Projekt Red Sp. z o.o., headed by Sebastian Zieliński) in Łódź in 2002. The studio made a demonstration game, which Adam Badowski called "a piece of crap" in retrospect. The demo was a role-playing game with a top-down perspective, similar to Dark Alliance and Diablo, and used the game engine which powered Mortyr.[18] Iwiński and Kiciński pitched the demo to a number of publishers, without success. The Łódź office closed and the staff, except for Zieliński, moved to the Warsaw headquarters.[12]

Zieliński left the company, and Kiciński headed the project. Although the game's development continued, the demo was abandoned. According to CD Projekt, the development team had different ideas for the game and lacked overall direction; as a result, it was returned to the drawing board in 2003.[19][20] The team, unfamiliar with video-game development, spent nearly two years organising production.[13] They received assistance from BioWare, who helped promote the game at the 2004 Electronic Entertainment Expo by offering CD Projekt space in their booth next to Jade Empire. BioWare also licensed their Aurora game engine to the company.[21]

The game's budget exceeded expectations. The original 15-person development team expanded to about 100, at a cost of 20 million złoty. According to Iwiński, content was removed from the game for budgetary reasons but the characters' personalities were retained; however, there was difficulty in translating the game's Polish text into English.[22] Atari agreed to publish the game.[23] After five years of development,[13] the game brought Wiedźmin to an international audience, and so the company adopted the English name, The Witcher, coined by Adrian Chmielarz.[17] The Witcher was released in 2007 to generally positive reviews.[24]

Sales were satisfactory, and the development of sequels began almost immediately after The Witcher's release. The team began the design work for The Witcher 2: Assassins of Kings, and experimented with consoles to develop a new engine for The Witcher 3. Their development was halted when the team began work on The Witcher: White Wolf, a console version of The Witcher.[12] Although they collaborated with French studio Widescreen Games for the console port, it entered development limbo. Widescreen demanded more manpower, money and time to develop the title, complaining that they were not being paid;[25] according to Iwiński, CD Projekt paid them more than their own staff members. The team cancelled the project, suspending its development.[26] Unhappy with the decision, Atari demanded that CD Projekt repay them for funding the console port development and Iwiński agreed that Atari would be the North American publisher of the sequel of The Witcher 2.[12] CD Projekt acquired Metropolis Software in 2008.[27]

CD Projekt Red receiving the European Games Award for The Witcher 2 at gamescom 2012

The dispute over White Wolf was costly; the company faced bankruptcy,[28] with the financial crisis of 2007–08 as a contributing factor.[12] To stay afloat, the team decided to focus on The Witcher 2 with the Witcher 3 engine. When the engine (known as Red Engine) was finished, the game could be ported to other consoles.[29] To develop The Witcher 2, the company suspended development of Metropolis' first-person shooter, titled They.[30] After three-and-a-half years of development, The Witcher 2: Assassins of Kings was released in 2011 to critical praise[12] and sales of more than 1.7 million copies.[31]

After The Witcher 2, CD Projekt wanted to develop an open-world game of a quality similar to their other games, and the company wanted to add features to avoid criticism that it was Witcher 2.5. They wanted to push the game's graphics boundaries, releasing it only for the PC and eighth-generation consoles. This triggered debate on the team, some of whom wanted to release the game for older consoles to maximise profit.[12] The Witcher 3: Wild Hunt took three-and-a-half years to develop[13] and cost over $81 million.[12][32] After multiple delays, it was released in May 2015 to critical praise.[33] Wild Hunt was commercially successful, selling six million copies in its first six weeks and giving the studio a profit of 236 million złoty ($62.5 million) in the first half of 2015.[34][35] The team released 16 free content downloads and two paid expansions, Hearts of Stone and Blood and Wine.[36] CD Projekt released two other The Witcher games: The Witcher Adventure (a board game for PC, iOS and Android)[37] and The Witcher: Battle Arena, a multiplayer online battle arena game for iOS and Android.[38]

In December 2015, CD Projekt Red won the "Developer of the Year" award at The Game Awards 2015.[39] In March 2016, the company announced that they had another role-playing game in development, and that the title is scheduled to be released in the period of 2017 to 2021. They also announced plans for expansion, where the Red division will expand two-fold.[40] At E3 2016, the company announced Gwent: The Witcher Card Game, based on the popular card game known as Gwent from The Witcher 3.[41]

In March 2018, the opening of a new studio in Wrocław, supporting the development of Cyberpunk 2077, was announced. Acquired from a studio called Strange New Things, it is headed by former Techland COO Pawel Zawodny and composed of other ex-Techland, IO Interactive, and CD Projekt Red employees.[42] In August 2018, CD Projekt established Spokko, a development studio focused on mobile gaming.[43]

REDengine[edit]

REDengine is a game engine developed by CD Projekt Red exclusively for their nonlinear role-playing video games.[44] It is the replacement of the Aurora Engine CD Projekt Red had previously licensed from BioWare for the development of The Witcher.[citation needed]

REDengine is portable across 32- and 64-bit software platforms and runs under Microsoft Windows.[44] REDengine was first used in The Witcher 2: Assassins of Kings for Microsoft Windows.[45] REDengine 2, an updated version of REDengine used in The Witcher 2,[44] also runs under Xbox 360[46] and both OS X[47] and Linux, however these ports were made using a compatibility layer similar to Wine called eON. REDengine 3 was designed exclusively for a 64-bit software platform, and also runs under PlayStation 4,[48] Xbox One, and Nintendo Switch.

REDengine 2 utilized middleware such as Havok for physics, Scaleform GFx for the user interface, and FMOD for audio.[49] The engine was used for the Xbox 360 port of The Witcher 2.[50]

REDengine 3 was designed to run exclusively on a 64-bit software platform. CD Projekt Red created REDengine 3 for the purpose of developing open world[44] video game environments, such as those of The Witcher 3: Wild Hunt. It introduces improvements to facial and other animations.[44] Lighting effects no longer suffer from reduced contrast ratio.[44] REDengine 3 also supports volumetric effects enabling advanced rendering of clouds, mist, fog, smoke, and other particle effects. There is also support for high-resolution textures and mapping, as well as dynamic physics and an advanced dialogue lip-syncing system. However, due to limitations on texture streaming, the use of high-resolution textures may not always be the case.[citation needed]

REDengine 3 has a flexible renderer prepared for deferred or forward+ rendering pipelines.[44] The result is a wide array of cinematic effects, including bokeh depth-of-view, color grading and lens flares associated with multiple lighting.[44] The terrain system in REDengine 3 uses tessellation and layers varying material, which can then be easily blended.[44]

Cyberpunk 2077 will use REDengine 4, the next iteration of the REDengine.[51] It introduces support for ray-traced global illumination and other effects, and this technique will be available in Cyberpunk 2077.[52]

Game distribution[edit]

The words "GOG.com" appear in stylised lettering

In 2008, the company introduced Good Old Games, a distribution service with a digital rights management-free strategy.[14] The service aims to help players find "good old games", preserving old games. To do so, the team needed to unravel licensing issues for defunct developers or negotiate with publishers for distribution rights. To recover old code for conversion to modern platforms, they had to use retail versions or second-hand games.[53] CD Projekt partnered with small developers and large publishers, including Activision, Electronic Arts and Ubisoft, to broaden the service's portfolio of games to triple-A and independent video games.[54]

Despite suspicions that it was a "doomed project", according to managing director Guillaume Rambourg, it has expanded since its introduction.[55] Indeed, as of June 2015, GOG.com had seen 690,000 units[56] of CD Projekt Red's game The Witcher 3: Wild Hunt redeemed through the service, more than the second largest digital seller Steam (approx. 580,000 units[57]) and all other PC digital distribution services combined.[58] As of 8 July 2019, every third Cyberpunk 2077 digital pre-order was sold on GOG.com.[59] Income from GOG.com (known internally as CD Projekt Blue) accrues to CD Projekt Red.[12]

Games developed[edit]

CD Projekt Red developed three Witcher titles before deciding that The Witcher 3: Wild Hunt would be the final game in the series with Geralt.[31][60] Regarding the future of the Witcher series, Konrad Tomaszkiewicz, game director of The Witcher 3, stated in May 2016 that he hoped to continue working with the series sometime in the future, but had nothing planned at the time.[61] As of 2017, the series had sold over 33 million copies.[62]

The company's next project is Cyberpunk 2077, an open-world role-playing game based on the Cyberpunk 2020 tabletop system created by Mike Pondsmith. Introduced in May 2012 with an international development team,[63] it was described by CD Projekt as "far bigger" than The Witcher 3.[31] It was slated for release on 17 September 2020 [64]after the release being postponed from 16 April 2020.[65] Cyberpunk 2077 had been delayed again from 17 September to 19 November, CD Projekt Red had announced in a new statement.[66] Another CD Projekt office in Kraków, which had assisted the development of CD Projekt's previous games, is expected to develop their own games in the future.[40] CD Projekt Red is planning to release another AAA title by 2021.[67]

Year Title Platform(s) Notes
2007 The Witcher macOS, Microsoft Windows Enhanced Edition released in 2008
2011 The Witcher 2: Assassins of Kings Linux, macOS, Microsoft Windows, Xbox 360 Enhanced Edition released in 2012
2014 The Witcher Adventure Game Android, iOS, macOS, Microsoft Windows Co-developed with Can Explode[68]
2015 The Witcher Battle Arena Android, iOS Co-developed with Fuero Games[69]
The Witcher 3: Wild Hunt Microsoft Windows, PlayStation 4, Xbox One, Nintendo Switch Nintendo Switch version released in 2019
The Witcher 3: Wild Hunt – Hearts of Stone Expansion pack to The Witcher 3
2016 The Witcher 3: Wild Hunt – Blood and Wine
2018 Gwent: The Witcher Card Game Microsoft Windows, PlayStation 4, Xbox One, iOS, Android Spinoff of a card game featured in The Witcher 3. iOS version released in 2019, Android version released in 2020
Thronebreaker: The Witcher Tales Microsoft Windows, PlayStation 4, Xbox One, Nintendo Switch, iOS, Android Standalone single-player game originally planned to be included in Gwent as Gwent: Thronebreaker.[70] Nintendo Switch, iOS, and Android versions released in 2020
2020 Cyberpunk 2077 Microsoft Windows, PlayStation 4, PlayStation 5, Xbox One, Xbox Series X, Stadia PlayStation 5 and Xbox Series X versions launching in 2021

Company philosophy[edit]

The moment we start becoming conservative [and] stop taking creative risks and business risks, and stop being true to what we're doing, that's when we should worry. And I am not worried. Our values and our care for what we are doing and – hopefully what gamers would agree with – care for gamers is what drives this company forward. It's my personal horror to become a faceless behemoth of game development or publishing or whatnot. As long as I am here I will be fighting for this not to happen.

— CD Projekt Red founder Marcin Iwiński, on maintaining independence[71]

The company claims to focus on certain aspects and features of a game at a time, in order to ensure quality.[72] The company focuses on the development of role-playing games, with the team working on established franchises with a fan base and introducing lesser-known franchises to a wide audience.[73] The studio has been praised for prioritising quest design over the size of the game world in its open-world games. [74]

CD Projekt Red opposes the inclusion of digital-rights-management technology in video games and software. The company believes that DRM is ineffective in halting software piracy, based on data from sales of The Witcher 2: Assassins of Kings. CD Projekt Red found that their initial release (which included DRM technology) was pirated over 4.5 million times; their DRM-free re-release was pirated far less,[75] and The Witcher 3: Wild Hunt was released without DRM technology.[76] The team believes that free downloadable content should be an industry standard. The company demonstrated this by releasing several free DLC for Wild Hunt.[77]

According to Studio Head Adam Badowski, CD Projekt Red avoided becoming a subsidiary of another company in order to preserve their financial and creative freedom and ownership of their projects.[78] Electronic Arts was rumoured to be attempting to acquire CD Projekt. This was quickly denied by Iwiński, who said that maintaining the company's independence is something he "will be fighting for".[71] Financial details on development, marketing and release costs are freely published, citing being "open in communication" as one of the company's core values.[79]

The company aims to follow Rockstar Games' business model, where the company works on a single project with a large team, and avoids working on multiple projects at the same time.[80]

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