Cyberpunk 2077 refunds barely dented CD Projekt Red’s bottom line

Back in December, CD Projekt Red made waves by offering full refunds to Cyberpunk 2077 players who were dissatisfied with the game’s poor performance, especially on older consoles. Days later, Sony delisted the game from PSN and made its own refund offer, followed by a similar refund off from Microsoft.

Today, with the release of the CDPR’s Consolidated Financial Statement for the 2020 fiscal year (which ended December 31), we know how much that refund program cost the company last year and how much CDPR expects those refunds and lost sales to cost in 2021. All told, the impact seems like it’s going to be a drop in the bucket in an otherwise record-setting financial year.

Buried in the “Other Provisions” section of the 90-page financial report, CDPR acknowledges about $51.2 million (194.5 million PLN) the company says it “has recognized [as] provisions for returns and expected adjustments of licensing reports related to sales of Cyberpunk 2077 in its release window, in Q4 2020.” Translated into plain English, that seems to include all digital and retail refunds for the game in 2020, as well as expectations for continued refunds and lost sales projected through 2021 (thanks to F-Squared’s Mike Futter for helping me parse the tortured language in the report).

Broken down, the $51.2 million in “provisions for returns” includes $10.65 million (40.4 million PLN) in refunds made through digital and physical retailers in 2020, as well as about $2.23 million (8.5 million PLN) in direct refunds made last year through CDPR’s “Help me Refund” campaign (including marketing costs for that campaign).

CDPR projects an additional $38.34 million (145.6 million PLN) in refunds and lost sales in 2021 “based on information obtained from distributors concerning sales to retail distribution networks, retail sales to end customers, number of copies present in various distribution channels and warehouses, as well as the distributors’ professional judgment concerning expected sales throughout 2021.” That seems to include the impact of the game’s continued absence from PSN, which CDPR says is close to ending now that the company has released a number of major patches.

A drop in the bucket

Losses of over $51 million due to Cyberpunk‘s botched launch might sound significant. But that number has to be taken against the rest of the company’s record-shattering performance last year. That included about $563 million in total sales revenue (~2.14 billion PLN) and net profit of just over $301 million (~1.15 billion PLN) in 2020 alone. Even adding in the Cyberpunk refunds/losses projected for 2021 (and not including any additional Cyberpunk sales projected for 2021), that $51 million “provision” represents just 9 percent of the company’s 2020 revenues.

You can also weigh the impact of the refund program against 13.7 million total unit sales of Cyberpunk 2077 before the end of December. Assuming 2020’s approximately $12.9 million in refunds averaged out to full $60 purchases, that means CDPR refunded just under 215,000 copies, or about 1.6 percent of all Cyberpunk units sold last year.

Despite the strong financial picture, the reputational damage CDPR is facing from Cyberpunk‘s poor rollout may continue. The company’s stock price peaked at $31 a share on December 4, just a week before it announced its refund program. Yesterday, that stock closed at $11.68, down over 62 percent in about 4.5 months.

Elsewhere in its financial presentation, CDPR shared additional statistics for Cyberpunk‘s absolutely massive launch, including:

• 73 percent of all sales were digital downloads; 23 percent retail discs.
• 56 percent of sales came on the PC/Stadia; 28 percent on PS4; 17 percent on Xbox One.
• 38 percent of sales in North America; 24 percent in Europe; 20 percent in mainland Asia.
• A total budget of $315 million (1.2 billion PLN) for the game.
• A team of 530 developers working on the game, plus 2,000 voice actors across 18 languages.

In addition to continued patches, CDPR continues to promise a number of free DLC offerings and optimized “new generation” editions of the game will be coming later in 2021.

Listing image by CD Projekt Red