MANAGEMENT BOARD REPORT ON
THE ACTIVITIES OF THE CD PROJEKT GROUP
FOR THE PERIOD BETWEEN
1 JANUARY AND 30 JUNE 2023
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
2 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Disclaimer
This English language translation has been prepared solely for the convenience of English-speaking readers.
Despite all the eorts devoted to this translation, certain discrepancies, omissions or approximations may
exist. In case of any dierences between the Polish and the English versions, the Polish version shall prevail.
CD PROJEKT, its representatives and employees decline all responsibility in this regard.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
3 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Table of contents
5 Brief outline of the CD PROJEKT Group
6 Activity profile
10 CD PROJEKT Group growth prospects
11 CD PROJEKT S.A. on the securities market
13 CD PROJEKT Group activity profile
14 Organizational structure of the CD PROJEKT Group
16 Disclosure of business segments, products and services, outlets, suppliers and clients
31 Disclosure of external and internal factors aecting further growth of the CD PROJEKT Group
33 Factors which, in the issuer’s opinion, will have a significant eect on its earnings in the scope of at least
the coming quarter
33 Disclosure of significant agreements
34 Basic threats and risks pertaining to the remaining months of the financial year
35 Results of operation of the CD PROJEKT Group
36 Discussion of the key economic and financial figures disclosed in the consolidated financial statements
55 Corporate governance
56 Entity contracted to audit financial statements
56 Shareholders controlling at least 5% of the vote at the General Meeting
57 Agreements which may result in changes in the proportions of shares held by shareholders and bondholders
59 Information regarding the control system of employee share programs
60 Disclosure of the purchase of own shares
60 Company shares held by members of the Management Board and the Supervisory Board
60 Management structure
61 Composition of the Management Board of CD PROJEKT S.A.
62 Changes in the composition of the Management Board of CD PROJEKT S.A.
63 Composition of the Supervisory Board of CD PROJEKT S.A.
63 Changes in the composition of the Supervisory Board of CD PROJEKT S.A.
64 Disclosure of retirement benefits and similar compensation payable to former members of the Issuer’s
executive, supervisory or administrative bodies, and of any liabilities associated with such benefits, specifying
the aggregate amounts for each category of recipients
64 Agreements between the Issuer and members of its managing and supervisory bodies
concerning compensation in the event of their resignation or dismissal
64 Changes in basic management practices at the Company and its Group
64 Corporate governance policies
65 Disclosure of significant legal proceedings
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
4 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Key highlights of the first half of 2023
■ On 29 May the Company announced that sales of games from
The Witcher trilogy had topped 75 million units, with The Witcher 3:
Wild Hunt accounting for more than 50 million units
■ At Summer Game Fest: Play Days in Los Angeles, on 9–10
June 2023, invited journalists and content creators had the
first opportunity to try their own hand at Phantom Liberty – the
Cyberpunk 2077 expansion
■ On 11 June at Xbox Games Showcase CD PROJEKT RED
announced that Phantom Liberty would be released on
26 September 2023
■ On 11 June gamers received their first opportunity to per-
sonally experience the expansion – at Xbox FanFest events
held in Warsaw, Los Angeles and Sao Paulo in Brazil. In
parallel, the global gaming media published their first impres-
sions of Phantom Liberty, based on earlier closed showcases
of the game
CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
01
BRIEF OUTLINE OF
THE CD PROJEKT GROUP
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
6 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Activity profile
CD PROJEKT S.A. (also referred to as CD PROJEKT or the Company), headquartered in Warsaw, conducts
business activities in the dynamically growing global digital entertainment segment. These activities have been
ongoing on the domestic market for nearly 30 years under the CD PROJEKT brand name, and began by distrib-
uting foreign games in Poland. Pivotal moments in the Group’s history came in 2002 with the establishment of
the CD PROJEKT RED studio, which initiated work on the Company’s first major RPG – The Witcher – as well
as in 2008, with the launch of GOG.COM.
The CD PROJEKT Group currently conducts operating activities in two key segments: CD PROJEKT RED and
GOG.COM.
1 Role Playing Game – a storyline-driven game based on a consistent narrative.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
7 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
CD PROJEKT RED
Developing and publishing videogames and tie-in products which exploit the commercial appeal of brands
owned by the Company.
GOG.COM
Digital distribution of videogames via the Company’s proprietary GOG.COM platform and the GOG GALAXY
application.
During the reporting periods 95.7% of the CD PROJEKT Group’s sales revenues were generated by exports.
Throughout the first half of 2023 North America and Europe accounted for 64.8% and 21.8% of the Group’s
sales respectively.
Map 1 The CD PROJEKT Group around the world
● Headquarters (CD PROJEKT RED, GOG.COM and Spokko)
● CD PROJEKT RED dev studio
● Branch oces
● Media and community managers
● Publishing team representatives
● CD PROJEKT RED Inc. and The Molasses Flood
São Paulo
Perugia
Dubai
Wrocław
Kraków
Warszawa
Berlin
Los Angeles
Boston
Shanghai
Tokyo
Seoul
Paris
Vancouver
GROWTH STRATEGY
Strategic directions related to talent acquisition, expansion and support for the team, as well as transformation
of the game development process, are presented in the CD PROJEKT Group Strategy Update published in
2021 (including in the accompanying video presentation).
On 4 October 2022 the CD PROJEKT Group published another Strategy Update, which builds upon the plans
unveiled in 2021 and focuses on long-term development of key products.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
8 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
In the coming years the studio intends to release a number of games within The Witcher and Cyberpunk 2077
franchises, as well as to carry out internal development work on its third proprietary IP codenamed Hadar.
The CD PROJEKT Group also announced the launch of a new hub in Boston (distinct from The Molasses Flood),
which, together with the Vancouver team, will comprise a new studio – CD PROJEKT RED North America, ena-
bling the Group to tap into the North American talent pool.
CD PROJEKT announced that it intends to carry on with the franchise flywheel concept, expanding the ecosys-
tem of mutually supporting products based on the commercial potential of the Group’s franchises. The Group
declared openness to cooperation with external teams in the scope of creating new, exciting ways to experience
the Group’s brands while enabling its internal team to focus on developing groundbreaking role-playing games,
eventually, expanding its ecosystem with games oering multiplayer capabilities.
Chart 1 Videogame development business model at CD PROJEKT RED
Own IP and full
control over the
creation process.
Focus on two widely
recognizable
franchises and limited
number of products.
International team of
experienced
developers who
constantly prioritize
quality.
Three development
studios: CD PROJEKT
RED Europe, CD
PROJEKT RED North
America* and The
Molasses Flood.
Own toolset and
know-how required in the
process of developing
captivating open-world
role-playing experiences.
Strategic partnership with
Epic Games enabling us
to base our games on
Unreal Engine.
Gamers-first business
philosophy enabled by
independent publishing
activities.
Direct digital distribution
of games.
Global reach –
collaboration with
handpicked distributors
of box editions of
videogames.
Honest and direct
communication with
gamers.
Full control over
message.
BACK OFFICE, INCLUDING HR, ACCOUNTING, FINANCES, LEGAL DEPT.,
ADMINISTRATION, TAXES, INVESTOR RELATIONS, IT
DEVELOPMENTCREATION TECHNOLOGY PUBLISHING DISTRIBUTION PRIORITY: GAMERS
* CD PROJEKT RED North America is expected to begin operating in 2023
In future years the Group perceives the following directions of strategic growth:
■
further ramp-up of production capabilities in order to deliver more content to gamers without sacrificing quality;
■ enriching experiences provided by CD PROJEKT RED games by adding multiplayer features;
■ further development of franchises.
A thorough presentation of the assumptions underpinning the CD PROJEKT Group’s Strategy can be found
on the Company website.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
9 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
EMPLOYMENT
The Group considers its team to be its greatest asset. We employ people who are passionate about developing
world-class products and services. Their talent, involvement and motivation represent the human capital of the
CD PROJEKT Group. They, along with their creative ideas, are the force behind the Group’s success.
CD PROJEKT embraces diversity and inclusion in the belief that a workplace based upon acceptance, openness
and trust unlocks the creative potential of our teams, and promotes innovation and imaginative endeavors.
This belief is enshrined in the CD PROJEKT S.A. Diversity Policy – an expression of basic values which apply to
the Company and guide relations among its team members, key managers and members of the Management
Board and Supervisory Board.
CD PROJEKT is also a signatory to the Diversity Charter – an international initiative organized under the auspices
of the European Commission, which obligates us to institute non-discrimination policies at the workplace, take
action to promote diversity and involve team members and business partners in these activities.
Chart 1 Employment structure at the CD PROJEKT Group at the end of 2022 and at the end of H1 2023
Total employee count
as of 30.06.2023
1297
Women (31%)
Men (69%)
Total employee count
as of 31.12.2022
1292
Women (31%)
Men (69%)
226
229
837
47
43
146
1056
225
244
828
32
9
155
1101
30.06.2023
31.12.2022
GOG.com
CD PROJEKT RED
Spokko*
The Molasses Flood**
Developers
Back o
ce
Publishing***
* The change in employment figures is due to phase-out of The Witcher: Monster Slayer and transfer of part of the dev team to other projects underway at the
Group. On 31 July 2023 Spokko sp. z o.o. was taken over by CD PROJEKT S.A.
** The change in employment at The Molasses Flood is associated with the reformulation of the framework of Project Sirius, carried out by this studio, and the
resulting adjustment of the team size to match the requirements of the project’s current development stage.
*** The Publishing branch comprises, among others, Marketing, PR, Business Development, Customer Relations and Game Releases teams.
At the close of the first half of 2023 the CD PROJEKT Group employed 1 297 persons.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
10 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
CD PROJEKT Group growth prospects
The CD PROJEKT Group conducts its business in the global videogame market which is among the most
dynamic branches of the global economy. Newzoo – respected analysts of the videogame and e-sports mar-
kets – estimate that by 2025 the global videogame market will have expanded to 206.4 billion USD, which
implies a cumulative annual growth rate (CAGR) of 4.1% for the 2020–2025 period. According to PWC’s “Global
Entertainment & Media Outlook 2023–2027” report, the videogame and e-sports markets is expected to grow
by 7.9% annually during this period.
The global gaming community continues to grow with each passing year – both with regard to headcount and
involvement (time spent playing games). Newzoo estimates that in 2022 the number of gamers worldwide
reached 3.2 billion, including 2.7 billion consumers of mobile games, with PC and console games accounting
for 1.0 billion and 0.6 billion users respectively. In 2025 the total figure is expected to surpass 3.5 billion. Con-
sidering that in 2020 there were fewer than 2.9 billion gamers, the CAGR rate for the 2020–2025 period is
projected at 4.2%.
The growth outlook of the Group is aected by the increasing popularity of this form of entertainment as an
approachable and attractive mass market oering, and also by the increasing sophistication and realism of
products oered, along with further development of digital means of reaching potential gamers and new game
distribution channels.
2 Video games market size estimates and forecasts for 2022, Newzoo, 17 May 2023, accessed on 1 August 2023, newzoo.com/resourc-
es/blog/the-latest-games-market-size-estimates-and-forecasts
3 Perspectives from the Global Entertainment & Media Outlook 2023–2027, PwC, 21 June 2023, accessed on 1 August 2023, pwc.com/
gx/en/industries/tmt/media/outlook/insights-and-perspectives.html
4 The Games Market Will Show Strong Resilience in 2022, Growing by 2.1% to Reach $196.8 Billion, Newzoo, 26 July 2022, accessed
on 1 August 2023, newzoo.com/insights/articles/the-games-market-will-show-strong-resilence-in-2022
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
11 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
CD PROJEKT S.A. on the securities market
The CD PROJEKT brand has been present on the Warsaw stock exchange since 2010. 99 910 510 Company
shares are traded on the Main Market of the Warsaw Stock Exchange under the continuous trading system.
Key shareholders of CD PROJEKT S.A. are its co-founders – Marcin Iwiński and Michał Kiciński. Other major
shareholders who are also members of the Company’s Management Board are Adam Kiciński – President and
CEO, and Piotr Nielubowicz – Vice President and CFO.
Chart 2 Company shareholding structure as of the publication date of this report
Remaining shares
65.8%
Adam Kiciński
4.0%
Piotr Nielubowicz
6.9%
Michał Kiciński*
10.4%
Marcin Iwiński
12.9%
Founders and
Management Board
members
*According to a notice filled on 26 May 2021
70
80
90
100
110
120
130
140
CD PROJEKT WIG20
01.2023 02.2023 03.2023 04.2023 05.2023 06.2023
Free float accounts for 65.8% of CD PROJEKT S.A. shares.
Chart 3 CD PROJEKT S.A. stock price and the WIG20 index between 1 January and 30 June 2023
Between 1 January and 30 June 2023 the Company stock price fluctuated between 105.64 PLN (11 April 2023)
and 170.00 PLN (16 June 2023). During this period the stock price increased by 19.7%, to 154.85 PLN at the
end of trading on 30 June 2023. Over the same period the WIG20 index gained 15.0% while the main WIG
index gained 16.6%.
On 30 June 2023 the Company’s market capitalization was 15.5 billion PLN.
*According to a notice filled on 26 May 2021
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
12 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Chart 4 Average daily value of trade in CD PROJEKT S.A. shares (by month) between 1 January and 30
June 2023 (PLN millions)
In the first half of 2023 the aggregate value of trade in Company stock was 6.6 billion PLN, which is 22% less
than during the corresponding period in 2022. The average daily value of trade was 53.2 million PLN, com-
pared to 68.5 million PLN during the reference period. A decrease was also observed in the average number
of transactions per trading day – from 7 005 to 6 017.
Table 1 Key indicators of CD PROJEKT S.A. stock
H1 2023 H1 2022 Change
Consolidated net earnings per share (PLN) . . -.%
Quantity of shares in trading (in thousands) at end of period -.%
Highest closing price (PLN) . . -.%
Lowest closing price (PLN) . . .%
Price at beginning of period (PLN) . . -.%
Price at end of period (PLN) . . .%
Average price during period (PLN) . . -.%
Market capitalization at end of period (PLN thousands) .%
Average number of transactions per trading day -.%
Average daily value of trade (PLN thousands) -.%
Average daily trading volume (shares) -.%
As of the publication date of this report 22 brokerage houses, both foreign and domestic, issue recommen-
dations concerning Company stock. The full list of analysts and brokerage houses which issue recommenda-
tions concerning Company stock can be found on the CD PROJEKT website at https://www.cdprojekt.com/en/
investors/analysts/.
0
10
20
30
40
50
60
70
80
90
100
January
February
March
April
May
June
2022 2023
Average daily value of
trade; H1 2022
- 68 million PLN
Average daily value of
trade; H1 2023
- 53 million PLN
CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
02
CD PROJEKT GROUP ACTIVITY PROFILE
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
14 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Organizational structure of the CD PROJEKT Group
As of 30 June 2023 the CD PROJEKT Group consists of the parent entity – CD PROJEKT S.A. – and six subsidiaries:
GOG sp. z o.o., CD PROJEKT Inc. (currently operating under the name CD PROJEKT RED Inc.), CD PROJEKT RED
Vancouver Studio Ltd., The Molasses Flood LLC, CD PROJEKT SILVER Inc. and Spokko sp. z o.o.
Scheme 1 CD PROJEKT Group at the end of H1 2023 (capital and voting share)
CD PROJEKT S.A.
GOG sp. z o.o.*
CD PROJEKT RED Vancouver Studio Ltd.
Spokko sp. z o.o.
CD PROJEKT Inc.*
100%
100%
100%
100%
CD PROJEKT SILVER Inc.
The Molasses Flood LLC
71%
100%
*Consolidated companies
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
15 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Table 2 Basic activity profile of each member company of the CD PROJEKT Group as of 30 June 2023
Company Scope of activity
CD PROJEKT S.A.
The principal scope of activity of the company, carried out through its
CD PROJEKT RED studio, involves development and publishing of videogames,
selling the associated distribution rights, as well as manufacturing, selling
or licensing tie-in products which exploit the popularity of brands owned
by the Group. CD PROJEKT S.A. also serves as the holding company of
the CD PROJEKT Group, and coordinates the activities of subsidiaries
which comprise the Group.
GOG sp. z o.o.
The company distributes videogames through online channels to customers
from around the world. The company also owns the GOG.COM proprietary
global digital distribution platform and the GOG GALAXY application.
CD PROJEKT Inc.
The company coordinates publishing and promotional activities related
to CD PROJEKT RED products. In July this company changed its name to
CD PROJEKT RED Inc. and relocated from Los Angeles to Boston.
CD PROJEKT RED
Vancouver Studio Ltd.
This gamedev studio, based in Vancouver, develops videogames within the
framework of CD PROJEKT RED.
Spokko sp. z o.o.
This gamedev studio specialized in mobile releases and was responsible for the
development of The Witcher: Monster Slayer. It is currently undergoing merger
with CD PROJEKT S.A.
The Molasses Flood LLC
This gamedev studio, based in Boston, is working on the project codenamed
Sirius.
CD PROJEKT SILVER Inc.
A company established to participate in development of entertainment products
tied to CD PROJEKT brands.
The above member companies of the CD PROJEKT Group, with exception of Spokko sp. z o.o., CD PROJEKT RED
Vancouver Studio Ltd., The Molasses Flood LLC and CD PROJEKT SILVER Inc., were subject to full consolida-
tion as of 30 June 2023. Detailed information can be found in the Consolidated Financial Statement of the
CD PROJEKT Group for the first half of 2023.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
16 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Disclosure of business segments, products and
services, outlets, suppliers and clients
In the first half of 2023 the Group conducted business activities in two segments:
■ CD PROJEKT RED,
■ GOG.COM.
CD PROJEKT RED
Target and scope of business activities
Videogame development is the main area of activity of the CD PROJEKT RED studio. It is based on two brands
owned by the Company: The Witcher and Cyberpunk.
The segment concerns itself with creation and publication of videogames, licensing the associated distribution
rights as well as manufacturing, distributing or licensing tie-in products which exploit the commercial appeal
of brands owned by the Company.
In the scope of its publishing activities the Company also assumes responsibility for its promotional and adver-
tising campaigns, and maintains direct relations with the player base via electronic and social media channels
(see the Communication section) as well as through participation in trade fairs.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
17 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Key products
Videogame development commenced in 2002 and initially focused on the studio’s RPG debut: The Witcher.
This game, set in Andrzej Sapkowski’s fantasy world, was released in 2007 to global acclaim, garnering over
100 awards and accolades.
As of the publication date of this report, key releases in the Company’s portfolio include The Witcher, The Witcher 2:
Assassins of Kings, The Witcher 3: Wild Hunt, two expansion packs for the latter (Hearts of Stone and Blood
and Wine) as well as Cyberpunk 2077 released on 10 December 2020.
In 2018 the Company released GWENT: The Witcher Card Game (PC, macOS, iOS, Android) – an online game –
as well as a single-player game – Thronebreaker: The Witcher Tales (PC, iOS, Nintendo Switch, Xbox One,
PlayStation 4, Android), built around similar gameplay mechanics.
Scheme 2 CD PROJEKT RED releases; 2007–2023
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
17.05.2011
The Witcher 2: Assassins of Kings (PC)
30.10.2007
The Witcher (PC)
17.04.2012
The Witcher 2: Assassins of Kings (X360)
19.05.2015
The Witcher 3: Wild Hunt (PC, Xbox One, PS4)
13.10.2015
The Witcher 3: Wild Hunt – Hearts of Stone
(PC, Xbox One, PS4)
31.05.2016
The Witcher 3: Wild Hunt – expansion pack: Blood and Wine
(PC, Xbox One, PS4)
15.10.2019
The Witcher 3: Wild Hunt Complete Edition (Nintendo Switch)
23.10.2018
Thronebreaker: The Witcher Tales (PC)
GWENT: The Witcher Card Game (PC)
29.10.2019
GWENT: The Witcher Card Game (iOS)
4.12.2018
Thronebreaker: The Witcher Tales (Xbox One, PS4)
GWENT: The Witcher Card Game (Xbox One, PS4)
24.03.2020
GWENT: The Witcher Card Game (Android)
10.12.2020
Cyberpunk 2077 (PC, Xbox One, PS4, Stadia)
15.02.2022
Cyberpunk 2077 (Xbox Series X|S, PS5)
28.01.2020
Thronebreaker: The Witcher Tales (Nintendo Switch)
9.07.2020
Thronebreaker: The Witcher Tales (iOS)
17.06.2021
Thronebreaker: The Witcher Tales (Android)
2022
15.02.2022
7.07.2022
GWENT: Rogue Mage (PC, iOS, Android)
14.12.2022
The Witcher 3: Wild Hunt Complete Edition
(Xbox Series X|S, PS5)
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
18 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Key sources of revenue
Sales of CD PROJEKT RED games are carried out under the following core business models:
■ sales of territorial distribution rights (for box and digital editions), settled post factum on the basis of monthly or
quarterly sales reports / licensing reports submitted by the Company’s business partners;
■ supplies of physical box editions (boxed games) to the Company’s business partners for retail resale;
■ supplies of batches of activation codes which permit games to be downloaded and installed;
■ sales carried out through optional microtransactions in GWENT: The Witcher Card Game.
Digital distribution agreements concluded by the Company are typically settled in monthly cycles, while distri-
bution of physical videogame editions follows quarterly reporting cycles. Depending on the specific partner or
contract, the Company also collects licensing reports – these are submitted 30, 45 or 60 days following the
end of each reporting period (typically each month or quarter).
In the first half of 2023 the most important CD PROJEKT RED products from the point of view of revenues were:
■ Cyberpunk 2077,
■ The Witcher 3: Wild Hunt, together with its expansions – Hearts of Stone and Blood and Wine.
Revenues were also generated – to a lesser degree – by micropayments in GWENT: The Witcher Card Game
and Thronebreaker: The Witcher Tales. Additionally, the Company oered earlier instalments in The Witcher
franchise, including The Witcher and The Witcher 2: Assassins of Kings, both of which continue to attract players
and generate revenues.
Key suppliers and clients
Within the CD PROJEKT RED activity segment, the Group carries out active distribution of its games for various
hardware platforms, through leading digital distribution platforms (e.g. Steam, PlayStation Store, Xbox Games Store,
Epic Games Store, Nintendo, Apple App Store, Google Play and Humble Bundle, along with its own proprietary
GOG.COM platform) as well as traditional distribution channels, in cooperation with leading global distributors
(such as BANDAI NAMCO Entertainment Europe S.A.S., Warner Bros. Home Entertainment, Epicsoft Asia PTE
LTD, Bandai Namco Entertainment Australia PTY LTD, Cenega S.A., Spike Chunsoft Co., Ltd., Soft Club LLC).
In the first half of 2023 sales to two clients exceeded 10% of the Group’s consolidated sales revenues and totaled
76 474 thousand PLN and 47 374 thousand PLN respectively (23.5% and 14.6% of the Group’s sales revenues
respectively). These clients are not aliated with CD PROJEKT S.A. or any of its subsidiaries. No other client
accounted for more than 10% of the Group’s consolidated sales revenues.
The videogame development process relies on certain bought-in tools and technical solutions; however, these
do not result in significant concentration of supply. No CD PROJEKT RED supplier accounted for more than 10%
of the consolidated revenues of the Group in the first half of 2023.
Communication
CD PROJEKT RED prides itself on direct and honest communication with the global gaming community under the
“Gamers first” policy. Player relations are carried out primarily through social media channels. CD PROJEKT RED
actively manages over 90 social media profiles in over a dozen languages, both global and local (such as the
BILIBILI and Weibo platforms in China, and the Naver Cafe platform in Korea).
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
19 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Scheme 3 Followers and subscribers of CD PROJEKT RED social media profiles as of 1 August 2023
bilibili
890 thousand followers
YouTube
265 thousand followers
Instagram
815 thousand followers
Twitch
463 thousand followers
Weibo
269 thousand followers
TikTok
222 thousand followers
X (Twitter)
2 million
followers
Facebook
519 thousand followers
LinkedIn
331 thousand followers
Key product and marketing events
Cyberpunk 2077
On 4 January 2023 Steam published its annual Steam Awards, with Cyberpunk 2077
carrying the “Labor of Love” category. In a popular poll Cyberpunk 2077 was
recognized by the gaming community for its ongoing support and development.
On 11 April Patch 1.62 was released for Cyberpunk 2077, introducing a “tech
preview” of a new display mode: Ray Tracing: Overdrive. The patch was co-de-
veloped with NVIDIA, and targeted at owners of advanced NVIDIA RTX 40 Series
graphic adapters. The new mode is based on Path Tracing – an innovative ren-
dering technology, which further increases the realism of in-game visuals, making
Cyberpunk 2077 one of the most technologically advanced games available.
On 15 May 2023, at the Digital Dragons Awards gala ceremony, Cyberpunk 2077
was presented with the Best Ongoing Polish Game award.
On 5 and 6 June the first hands-on presentations of Phantom Liberty were held
in Warsaw for media representatives. Over a period of two days, guests from
nine regions (including Germany, France, MENA countries, Brazil, China and the
United Kingdom) visited the CD PROJEKT RED headquarters for pre-release
showcases of the Cyberpunk 2077 expansion. Similar presentations were held
in Tokio between 7 and 9 June, targeting Japanese media outlets.
On 9 and 10 June 2023, as a partner of Summer Game Fest: Play Days held in Los Angeles, CD PROJEKT RED
hosted journalists from around the world in its media zone. Guests were provided with the ability to try out
Phantom Liberty on all supported platforms, i.e. PC, XSX|S and PS5.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
20 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
On 11 June, at Xbox Games Showcase, CD PROJEKT RED announced that Phantom Liberty – the storyline
expansion for Cyberpunk 2077 – will be released on 26 September 2023. Keanu Reeves himself introduced
the game’s Ocial trailer.
On the same day fans of the Cyberpunk 2077 franchise had the first opportunity to personally play the upcom-
ing expansion at a set of Xbox FanFest events held in Warsaw, Los Angeles and Sao Paulo in Brazil. In parallel,
global gaming media outlets posted their initial impressions based on earlier hands-on presentations. Altogether,
Phantom Liberty was covered by over 350 media outlets from around the world, with an overwhelming majority
of impressions being strongly positive.
The release date announcement was paired with the launch of the expansion’s preorder campaign. Gamers
who preorder Phantom Liberty will receive access to one of the new cars introduced in the expansion – Quadra
Sport R-7 “Vigilante”. CD PROJEKT RED also announced that on the expansion’s release day both the base
game and the expansion will receive Ukrainian subtitles.
The focus of the Xbox Showcase Extended stream, held on 13 June 2023, was on releases announced during
the main Xbox Games Showcase event. The stream featured, among others, Phantom Liberty – viewers could
enjoy a walk around Dogtown along with a commentary provided by the CD PROJEKT RED Quest Director,
as well as an interview with Keanu Reeves who spoke not only about the new location, but also about new
characters and the spy-thriller storyline of the Cyberpunk 2077 expansion.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
21 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
On 20 June 2023 the Company released Patch 1.63, introducing further improvements and bugfixes to
Cyberpunk 2077.
On 6 July 2023 CD PROJEKT RED announced the first locations and dates for the upcoming community Phan-
tom Liberty Tour. Altogether, eight events are planned, oering fans the opportunity to play the expansion
ahead of release and meet with CD PROJEKT RED developers.
On 14 July 2023 Cyberpunk 2077 crossed the “Very Positive” review score threshold on Steam: this means
that at least 80% of the more than 550 thousand reviews of the game are positive.
On 19 and 20 July hands-on presentations of Phantom Liberty were held at the CD PROJEKT RED Warsaw
campus for representatives of Chinese media who were not able to visit the studio in June.
On 8–10 August Cyberpunk 2077: No Coincidence, a novel by the popular Polish sci-fi writer Rafał Kosik, was
published worldwide, with successive launces held in the United Kingdom, Poland and the United States. The
book is available in paperback, e-book and audiobook editions, and will eventually appear in 10 language versions.
On 22 August, at the Opening Night Live gala of the gamescom fair in Cologne, CD PROJEKT RED presented New
Ways of Play – a visual introduction to the new content which will be added to Cyberpunk 2077 and Phantom
Liberty in Update 2.0 – the largest update yet, to be released free of charge for the PC and next-gen consoles.
On the same day NVIDIA, a close partner of CD PROJEKT RED, presented a trailer which announces and show-
cases the innovative DLSS 3.5 technology. Cyberpunk 2077: Phantom Liberty will be among the first releases
to oer support for this technology.
On 23–27 August 2023 participants of gamescom in Cologne had the opportunity to play Phantom Liberty
ahead of release, thanks to cooperation with Xbox.
On 24 August a new episode from the REDstreams series appeared on CD PROJEKT RED’s ocial Twitch chan-
nel. In a live feed, game developers working for the Studio discussed the new content coming to Cyberpunk,
revealed at gamescom. The stream also featured Kacper Niepokólczycki, lead environment artist, and Gabe
Amatangelo, game director, who showcased changes coming to Cyberpunk 2077 with Update 2.0 and the
Phantom Liberty expansion.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
22 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Scheme 4 Followers and subscribers of Cyberpunk 2077 social media profiles as of 1 August 2023
Instagram
778 thousand followers
Steam Community
1.4 million followers
Reddit
1.1 million followers
Facebook
1.1 million followers
YouTube
1.6 million followers
Discord
165 thousand followers
X (Twitter)
1.8 million followers
Events related to The Witcher videogame series
The highlight of the initial part of 2023 was the announcement, on 18 January, of
CD PROJEKT RED’s collaboration with Amazon Games. Lost Ark players from Europe
and the Americas received the ability to play as Geralt of Rivia and engage in a series of
Witcher-inspired quests in the land of Arkesia.
The box version of The Witcher 3: Wild Hunt – Complete Edition for next-gen consoles
was released on 26 January 2023.
On 7 February 2023, thanks to collaboration between CD PROJEKT RED and Epic Games,
Geralt of Rivia appeared in Fortnite. Gamers could unlock his character along with a unique
quest, events and items inspired by The Witcher videogame series.
On 24 May 2023 CD PROJEKT RED published information regarding the future of
GWENTFINITY – an initiative which aims to turn GWENT: The Witcher Card Game over
to the community. This will happen in 2024, following the release of the last patch for the
game, scheduled for the coming December.
The Witcher: Old World – a board game – launched on 22 June 2023. The story of the
game, which was developed by Go On Board in collaboration with CD PROJEKT RED
and funded by a Kickstarter campaign, takes place before the time of Geralt of Rivia. The
game retails in two versions; Standard and Deluxe, and has three expansions: Skellige,
Mages and Legendary Hunt.
On 23 June 2023, in the framework of CD PROJEKT RED’s collaboration with Epic Games,
Ciri and Yennefer – two well-known characters from The Witcher universe – joined the
Fortnite cast. In addition to access to both characters, gamers were given access to emoti-
cons, new apparel and other cosmetic items, as well as maps inspired by their storylines.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
23 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Scheme 5 Number of followers and subscribers of The Witcher social media profiles as of 1 August 2023
YouTube
406 thousand followers
Facebook
1.6 million
followers
X (Twitter)
1.5 million followers
Other events
On 23 January 2023 the Company announced the RED Playtesting Program – a new initiative which encourages
gamers and community members to engage in the development process of the studio’s games. At playtesting
sessions organized at CD PROJEKT RED’s Warsaw campus invited participants can review elements of games
which are currently in production, and share their impressions and comments with the dev team. This will help
us further adapt our games to the expectations of the gaming community.
On 20–24 March 2023 San Francisco hosted the Game Developer Conference – one of the keystone global
events which focus on the gamedev industry. CD PROJEKT RED was represented by over thirty specialists who
delivered talks and participated in panel discussions, sharing their knowledge and experience gained during
development of Cyberpunk 2077.
On 28 April 2023 Forbes Polska named CD PROJEKT RED Poland’s best employer in the IT industry, and the
second best employer overall.
On 15–16 May the CD PROJEKT RED team participated in the most important gaming event in Poland – the
Digital Dragons conference. Studio representatives took this opportunity to share their knowledge and expe-
rience gained in the development of The Witcher and Cyberpunk 2077.
On 18 May 2023 the studio announced the date of this year’s edition of the Promised Land Art Festival – a unique
meetup for representatives of the creative industries (including motion pictures, videogames and digital art).
The event will be held on 3–6 September at the EC1 complex in Łódź.
On 19 June 2023 CD PROJEKT And Futuregames Warsaw announced a strategic partnership to promote edu-
cational activities in the framework of the gamedev industry. Futuregames Warsaw – a Swedish school which
organizes courses for gamedev adepts at CD PROJEKT’s Warsaw campus – will hold educational activities
for programmers, designers and artists. Enrollment at the Warsaw branch will be available to EU citizens and
holders of valid student visas. The curriculum will include onsite sessions held in English, enabling participants
to develop four separate games with the use of professional software and equipment. Thanks to CD PROJEKT
support, organizers will provide a 50% discount on first-year tuition, scholarships for up to nine top students,
and 30-day internships for selected course participants.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
24 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
The summer internship program at CD PROJEKT RED began on 3 July 2023. Over a three-month period selected
participants will be oered the opportunity to familiarize themselves with behind-the-scenes activities at the
studio, and participate in the final phase of preparations for the launch of Phantom Liberty.
CD PROJEKT RED GEAR Store – an online outlet which markets gadgets to fans of The Witcher and Cyberpunk
games – reopened on 18 July 2023. The store is currently managed by an external partner – DPI Merchandising.
GOG.COM
Target and scope of business activity
The GOG.COM platform was launched in August 2008. Its initial mission was to revitalize major PC cult classics and
oer them for sale to international customers with particular focus on English-speaking countries, i.e. United States,
Canada, United Kingdom and Australia. In 2023 the platform was oered in English, French, German, Chinese, Polish
and Russian – this includes full game localizations as well as – with exception of the Russian edition – dedicated
customer support, localized marketing activities and integration with locally popular payment channels, accepting
payments in twelve currencies. GOG.COM also carries releases for the macOS and Linux operating systems.
Activities carried out in the GOG.COM segment focus on digital distribution of videogames via the Compa-
ny’s proprietary GOG.COM distribution platform and the GOG GALAXY application. The platform enables
customers to purchase games, remit payment and download game files to their personal devices, while the
GOG GALAXY application provides – among others – automatic updates, cloud saves, online and cross-play
features. It is also responsible for the online features of GWENT, as well as for processing in-game sales and
payments within the PC edition of the game.
Payments collected by GOG sp. z o.o. from customers are split with the Company’s suppliers as agreed upon in
distribution contracts. Typical contracts require the Company to submit sales reports to its suppliers in monthly or
quarterly cycles, not later than 30 days following the close of the given reporting period. With regard to certain
older products the company may be contractually permitted to adapt them to the requirements of modern oper-
ating systems, or to enable multiplayer gameplay if such features were originally provided by the given game.
Scheme 6 Number of followers and subscribers of GOG.COM social media profiles as of 1 August 2023
Other
112 thousand followers
Facebook
444 thousand
followers
Twitch
72 thousand followers
YouTube
69 thousand followers
X (Twitter)
449 thousand
followers
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
25 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Key products
As of the publication date of this report, the GOG.COM digital distribution platform oers over 8000 products
from more than 1200 partners. This includes both timeless classics and fresh releases from such well-known
brands as Bethesda, Disney, Electronic Arts, Ubisoft, Konami and Warner Bros.
The key dierence between GOG.COM and its competition is its strong customer focus and the “gamers first”
approach. This is evidenced, among others, by supporting the concept of ownership by striving to ensure that
single-player gamers are distributed in the DRM-free model, free of restrictions which might otherwise prevent
customers from enjoying their purchases. Products oered on GOG.COM are also richly featured and usually
include bonus content such as soundtracks, maps and wallpapers. All games bought on GOG.COM can be
returned within 30 days of purchase – the GOG.COM returns policy is among the most customer-friendly on
the digital distribution market.
In addition to the above, GOG.COM ensures compatibility of its games with current versions of MS Windows,
macOS and popular distributions of Linux, which is a particular advantage in the case of classic games and
contributes to preservation of videogame history.
The Group uses GOG.COM to market its own products directly to end users – this includes games set in
The Witcher universe, as well as Cyberpunk 2077.
Key sources of revenue
Revenues obtained in the GOG.COM segment are directly dependent on the popularity of the oered games
and their respective sales volumes. The Company continuously expands the scope of its cooperation with
suppliers and seeks access to new, attractive products. GOG.COM is also home to seasonal and one-o sales
campaigns, including summer, fall and Christmas bargain packages as well as other events which introduce
new means of attracting gamers.
Key product and marketing events
Digital distribution of videogames
In the first half of 2023 the catalogue was expanded, among others, with such releases as Cyberpunk 2077:
Phantom Liberty (preorder), Yakuza Complete Series, System Shock, Age of Wonders 4: Premium Edition,
Pharaoh: A New Era, Wartales, Age of Wonders 4, Warhammer 40,000: Dawn of War – Master Collection,
SpellForce: Conquest of Eo and DREDGE.
Sales support
With regard to digital distribution sales support focuses primarily on securing distribution rights to new, appealing
videogames, and on seasonal sales campaigns.
The first half of 2023 was marked by GOG.COM’s traditional periodic sales. The new year kicked o with the
Winter Sale, followed by New Year Sale at the end of January. In February GOG.COM held the We Love Games
sale, celebrating Valentine’s Day, while the highlight of March was the GOG Spring Sale. The Summer Sale, held
in June, was the biggest such event yet, with over 6 thousand games oered at bargain prices.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
26 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Cyberpunk 2077: Phantom Liberty
In business terms, the first half of 2023 culminated on 11 June, when GOG.COM launched the Cyberpunk 2077:
Phantom Liberty preorder campaign. Having preordered the game, GOG.COM account holders could unlock
a selection of items dedicated to CD PROJEKT RED fans – including apparel and equipment for V, including
a Witcher sword.
Key suppliers and clients
GOG sp. z o.o. markets games via online channels directly to millions of individual users worldwide. As such,
the segment does not have key clients in the usual sense of the term.
Chart 5 Sales of products and goods by GOG.COM in the first half of 2022 and 2023 (by territory)
In terms of territorial breakdown, sales in H1 2023 followed the pattern established in the preceding years. In
H1 2023 the largest group of GOG.COM customers came from the United States (32%), followed by Germany
(14%), Poland (9%) and the United Kingdom (6%).
As of 30 June 2023 no single supplier in the GOG.COM segment accounted for more than 10% of the Group’s
consolidated revenues.
KEY CORPORATE EVENTS
On 31 January 2023, having concluded a share purchase agreement with the remaining shareholders of its
subsidiary, Spokko sp. z o.o., the Company purchased from them a total of 135 shares of Spokko sp. z o.o. with
a nominal value of 50.00 PLN each, as a result of which the Company became the owner of 100% (i.e. 1 089)
of shares of this subsidiary.
On 28 February 2023 the District Court for the City of Warsaw in Warsaw registered the merger between the
Company and its subsidiary – CD PROJEKT RED STORE sp. z o.o. with its registered seat in Warsaw – in the
Other territories
25%
Sweden
1%
Netherlands
2%
Australia
3%
Canada
4%
France
5%
United Kingdom
6%
Poland
9%
Germany
14%
USA
32%
Other territories
27%
Sweden
1%
Australia
3%
Canada
4%
France
4%
United Kingdom
6%
Poland
7%
Germany
13%
USA
35%
H1 2022 H1 2023
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
27 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
register of entrepreneurs. The goal of the merger was to simplify the CD PROJEKT Group’s structure in connec-
tion with plans to contract a specialized third party to continue the existing operations of the Target Company
in line with the Long-Term Strategic Growth Outlook of CD PROJEKT Group.
On 20 March 2023 the Management Board of the Company announced its decision concerning recognition,
in its accounts, of an impairment allowance on to-date development expenditures related to Project Sirius,
which is developed by The Molasses Flood. This decision was based on the outcome of evaluation of the
scope and commercial potential of the Project in its original shape. The Company also announced that work
was underway to define a new framework for the Project. Total development expenditures incurred by Project
Sirius by the end of 2022 were 33.4 million PLN, and this amount burdened the financial result of the Company
and the CD PROJEKT Group for 2022.
An Extraordinary General Meeting of the Company took place on 18 April 2023. Shareholders voted, among
others, to approve the new incentive programs A and B for the 2023–2027 period, conditionally increase the
share capital and issue subscription warrants with exclusion of pre-emption rights for existing shareholders. The
EGM also voted to lower the share capital by redeeming 860 290 shares previously purchased by the Company
on 5–24 October 2022. The full text of resolutions adopted by the EGM is available on the Company website.
On 20 April 2023 the Management Board of the Company announced that a merger plan had been agreed
upon and signed by the Company, acting as the acquirer, and Spokko sp. z o.o., acting as the acquiree. The
Merger Plan (together with the required annexes) is appended to Current Report no. 14/2023, and also posted
on the Company website and on the website of the target company. The merger will become eective on the
day it is entered in the registry of entrepreneurs. According to the strategy adopted by the Company in October
2022, the Company intends to focus on its core activities while carrying out mobile projects in collaboration
with external partners.
On 8 May 2023 the Management Board of the Company recommended that 99 910 thousand PLN from the
profit obtained in 2022 be allocated towards a dividend (at 1 PLN per Company share participating in the divi-
dend), with the remaining portion of the net profit, at 241 162 thousand PLN, reassigned to reserve capital. The
Supervisory Board of the Company subsequently endorsed this recommendation. On 6 June 2023 the Ordinary
General Meeting of the Company decided to allocate profit in line with the presented recommendations, setting
the dividend date of record to 13 June 2023 and the dividend payment date to 20 June 2023.
On 11 May 2023, in reference to Current Report no. 8/2023 of 20 March 2023, the Management Board of the
Company announced that work on defining a new framework for Project Sirius underway at The Molasses
Flood had concluded, as a result of which the following changes were entered in the Company’s accounts:
■
the impairment allowance on 2022 development expenditures related to the Project, originally amounting
to 33.4 million PLN and burdening the financial result of the Company and its Group for 2022, was partially
reversed, in the amount of 21.5 million PLN;
■ a portion of the development expenditures related to the Project incurred in the first quarter of 2023, in the
amount of 2.7 million PLN, was written o.
Partial reversal of the impairment charge for 2022 and partial writeo of Q1 2023 development expenditures
results from the decision to carry on with the project within its reformulated framework, and therefore reuse
a significant portion of to-date results in further development work underway at The Molasses Flood.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
28 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
On 31 May 2023, as a result of decisions undertaken by the Board of Directors of CD PROJEKT Inc. (currently
operating under the name CD PROJEKT RED Inc.) and CD PROJEKT S.A. (its sole shareholder) the share cap-
ital of the former company was increased by 720 thousand USD, to 6 020 thousand USD. On the same day
CD PROJEKT Inc. entered into an agreement with The Molasses Flood LLC and one of that company’s existing
members, becoming the holder of 70.91% (i.e. 390 000) of its units.
On 6 June 2023 an Ordinary General Meeting of CD PROJEKT was held. The OGM voted, among others, to
amend the Company Articles so as to enable the Board to pay out advance dividends to shareholders, as well
as to approve the Company’s merger with Spokko sp. z o.o. The Management Board was also empowered to
carry out future buy-backs of Company shares for an amount not exceeding 500 million PLN. The full text of
resolutions adopted by the EGM is available on the Company website.
On 26 June 2023 the District Court for the City of Warsaw registered changes comprising, among others,
a reduction in the Company share capital by 850 290 PLN and the corresponding redemption of 860 290 of
the Company’s own shares (i.e. shares previously bought back by the Company for redemption in the course
of a buy-back program carried out between 5 and 24 October 2022). As a result, as of the publication date of
this report, the Company share capital amounts to 99 910 510 PLN and consists of 99 910 510 ordinary bearer
shares with a nominal value of 1.00 each, arranged into series bearing labels from A to M. The total number of
votes aorded by all Company shares outstanding is 99 910 510.
EVENTS FOLLOWING THE BALANCE SHEET DATE
On 10 July 2023, as a result of decisions undertaken by the Board of Directors of CD PROJEKT Inc. (currently
operating under the name CD PROJEKT RED Inc.) and CD PROJEKT S.A. (its sole shareholder), the former com-
pany changed its name from “CD PROJEKT Inc.” to “CD PROJEKT RED Inc.” and relocated its principal place
of business to Boston (Waltham), MA.
On 26 July 2023 the Management Board of the Company announced its decision to adjust the scale and structure
of the Company team to match its operating requirements and development/publishing plans carried out in the
framework of the CD PROJEKT RED Group strategy. As a result, a sta reduction will be carried out, aecting
approximately 9% of CD PROJEKT RED personnel, including its development, publishing and back-oce teams.
The process is expected to conclude in the first quarter of 2024.
The decision is related to the continuing transformation as part of which the CD PROJEKT RED studio has
managed to – among others – incorporate Agile methodologies, while reshaping development processes and
optimizing working arrangements. This change in approach, along with eorts to build more eective project
teams, represents a continuation of an ongoing transformation which the Company regards as key to making
top-quality games, published on schedule and developed without undue crunch.
The Company also announced that the estimated value of provision for costs related to dissolution of contracts
with personnel (including the costs of severance payments) was approximately 4.5 million PLN. This provision
will burden the financial results of the CD PROJEKT Group in the third quarter of 2023.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
29 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
EFFECT OF THE POLITICAL AND ECONOMIC SITUATION IN UKRAINE
ON THE ACTIVITIES OF THE CD PROJEKT GROUP
Eect on earnings
In response to the Russian armed invasion of Ukraine, on 3 March 2022 the Management Board of CD PROJEKT
decided to suspend sales of CD PROJEKT Group products as well as games distributed on the GOG.COM plat-
form on the territory of Russia and Belarus.
The Company estimated that throughout the 12-month period between March 2021 and February 2022 the
aggregate share of Russia and Belarus in revenues from sales of products in the CD PROJEKT RED segment
and in GOG.COM sales revenues amounted to 5.4% and 3.7% respectively.
Risks associated with the current political and economic situation in Ukraine
The Company continually monitors the eects of the current political and economic situation in Ukraine, Russia
and Belarus upon the activities of the CD PROJEKT Group.
The Company has terminated collaboration with Russian and Belarussian suppliers. At the present time the
Company does not intend to initiate any further collaboration with such entities.
As of the publication date of this report the Group’s operating activities proceed unhindered, and the eect of
the Russian armed invasion of Ukraine do not have a significant negative impact on the Group’s operations.
In the Management Board’s opinion the current political and economic situation in Ukraine does not aect
the quantitative data contained in the financial statement, does not provide a reason to suspect impairment of
assets, should not have a significant negative eect on the Group’s earnings in 2023, and does not jeopardize
continuation of the Company’s activities within 12 months of the conclusion of the reporting period. Given the
unprecedented character of current events and significant uncertainty associated therewith – particularly the
lack of reliable knowledge concerning the duration of the Russian invasion – as of the publication date of this
report it is impossible to accurately predict the long-term eects of the invasion upon the condition and earnings
of the Company and its Group. Any assessments and forecasts in this regard are fraught with uncertainty, and
will be subject to further monitoring and analysis by the Group.
Insofar as possible, the above assessment reflects the Company’s knowledge as of the publication date of
this report.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
30 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
DISCLOSURE OF SEASONAL OR CYCLICAL ACTIVITIES
CD PROJEKT RED
The revenues and financial result of the CD PROJEKT RED segment are strongly aected by the videogame
release schedule. CD PROJEKT RED usually takes between 2 and 5 years to produce a game. Initial develop-
ment work occurs before the previous game in the series is complete and ready to be released.
Chart 6 Eect of new releases on the quarterly revenues from sales of products, goods and materials by
CD PROJEKT RED in 2011–2023 (PLN thousands)
CD PROJEKT RED also engages in smaller-scale projects – such as add-ons for its own games or adapting
existing products to work on new gaming platforms. Such projects may be carried out directly by the Company
or by its external partners, and their implementation usually takes several months (up to about a dozen).
With regard to games which have already been released, their yearly sales breakdown is dependent on the
schedule of periodic sale campaigns. In most cases, strong sales are reported in the second and fourth quarter,
while the first and the third quarter (the latter of which overlaps with the summer vacation season) see weaker
sales.
In addition to pure development activities, the Company also actively manages its franchises in other fields,
working to continually expand its target audience, and exploring new media types and platforms.
GOG.COM
The digital videogame distribution market, which is the main area of activity of GOG.COM, is characterized
by seasonal fluctuations in revenues. On an annual basis, the highest revenues are typically obtained in the
fourth quarter while the lowest revenues correspond to the third quarter. Sales in Q2 and Q4 are boosted by
promotional activities organized in these periods.
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
Q1/2011
"The Witcher 2" (PC) Q2/2011
Q3/2011
Q4/2011
Q1/2012
"The Witcher 2" (X360) Q2/2012
Q3/2012
Q4/2012
Q1/2013
Q2/2013
Q3/2013
Q4/2013
Q1/2014
Q2/2014
Q3/2014
Q4/2014
Q1/2015
"The Witcher 3" Q2/2015
Q3/2015
Expansion: "Hearts of Stone". Q4/2015
Q1/2016
Expansion: "Blood and Wine" Q2/2016
Q3/2016
Q4/2016
Q1/2017
Q2/2017
Q3/2017
Q4/2017
Q1/2018
Q2/2018
Q3/2018
"GWENT", "Thronebreaker" Q4/2018
Q1/2019
Q2/2019
Q3/2019
"The Witcher 3" (Nintendo Switch) Q4/2019
Q1/2020
Q2/2020
Q3/2020
"Cyberpunk 2077" Q4/2020
Q1/2021
Q2/2021
Q3/2021
Q4/2021
Q1/2022
Q2/2022
Q3/2022
Q4/2022
Q1/2023
Q2/2023
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
31 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
The sales volume is also strongly dependent on the timing of new releases in each reporting period.
Chart 7 Sales of goods and materials in the GOG.COM segment in 2019–2023 (PLN thousands)
Strong revenues reported by the GOG.COM segment in 2020 and 2021 were associated with the COVID-19
pandemic and the corresponding rise in popularity of video games during that period.
Disclosure of external and internal factors affecting
further growth of the CD PROJEKT Group
Future growth of the Company and its Group is critically dependent on the ability to retain world-class creative
professionals and experts, and to attract a growing number of specialists, both Polish and foreign, to work on
the Group’s future releases. Strategic directions related to talent acquisition, team development and support
were presented in 2021 in the CD PROJEKT Group Strategy Update (including the attached video commentary)
and in the CD PROJEKT Group Sustainability Report for 2022.
Another important factor which may support the Group’s growth is eective implementation of CD PROJEKT RED’s
development plans announced in October 2022 as part of the Group’s Strategy Update, along with further
broadening of the recognizability and popularity of the Group’s franchises (including via cooperation with
external entities), and enriching games based on the Group’s proprietary IP with multiplayer gameplay elements.
In addition to the above, the activities of CD PROJEKT Group member companies are aected by external
factors such as the macroeconomic outlook, legal reforms and changes in taxation. In this sense, CD PROJEKT
is in a similar position to many other companies conducting business on domestic and international markets.
0
40000
80000
120000
160000
200000
Q1
Q2
Q3
Q4
2019 2020 2021 2022 2023
Cyberpunk 2077
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
32 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
In the second half of 2023 the CD PROJEKT Group intends to carry on expanding its activities in an organic
manner.
CD PROJEKT RED
Key factors which determine the growth of the CD PROJEKT RED segment include ongoing projects, the scale
of development work associated with those projects and their perceived popularity among gamers. In this
context, the most significant factors shaping the current results of the CD PROJEKT Group include the popu-
larity of previously published games set in The Witcher and Cyberpunk universe. In future periods the growth
prospects and earnings posted by the Group will depend on the progress and market reception of new devel-
opment projects, as well as on the Company’s ability to publish top-quality products supporting its franchises
and increasing the recognition of the Company’s brands.
Notable events aecting CD PROJEKT RED in the coming quarters will include the launch of the big expansion for
Cyberpunk 2077. Phantom Liberty is set to come out on Xbox Series X|S, Playstation 5 and PC on 26 September
2023. Before the launch date, the Company intends to engage in a wide range of events and activities com-
prising the expansion’s marketing campaign. In addition to this release, CD PROJEKT RED will also focus on
further organic growth of its business activities, including in the framework of the nascent CD PROJEKT RED
North America studio.
Another notable process at CD PROJEKT RED – in the context of the studio’s development – is the ongoing
deployment of Unreal Engine 5, which will continue in the coming quarters, based on the licensing and partner-
ship agreement with Epic Games signed in March 2022. Use of this engine should significantly streamline the
game development process. The Company’s strategic partnership with Epic Games involves further work on
UE5 in the scope of support for open-world games, and adaptation and optimization of its elements to match
the conceptual framework of future projects. In addition, Epic Games has also committed itself to providing
dedicated technical support for CD PROJEKT RED games. Working with UE5 significantly broadens the Studio’s
recruitment opportunities given that Unreal Engine is familiar to many game developers.
Maintaining the observed growth dynamics of the CD PROJEKT RED segment will depend on further enhance-
ment of its world-class videogame development skillset and on the capacity for eective communication with
the global gaming community. Both aspects are crucial for Studio’s ongoing transformation – labeled RED 2.0 –
which aims, among others, to apply the agile methodology in the videogame development process, thereby
improving product quality. Migration to a dual franchise model supported by several independent, parallel projects
paves the way for potential optimization of manufacturing and financial activities, increases the frequency of
releases along with the associated revenues, mitigates important risk factors and makes it easier for Company
employees to seek professional fulfillment.
GOG.COM
Sales in the GOG.COM segment sales have, in the recent years, benefitted from customers’ increasing tendency
to turn to online channels for purchases.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
33 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
GOG.COM growth also depends on raising awareness of the platform among gamers and on seeking additional
brand-new products to add to its lineup. Accordingly, GOG sp. z o.o. actively communicates with leading global
developers and publishers of videogames, continually expanding its list of business partners and products
oered. Each new release on GOG.COM contributes to the platform’s popularity and drives up sales. In addition
to adding new products GOG sp. z o.o. also seeks to expand its user base by attracting new gamers – those
who have not yet set up a GOG.COM account. During the recent years the Company has been successful in
this regard, owing to its PR activities and synergies resulting from cooperation with CD PROJEKT S.A. The
GOG.COM customer pool continues to grow at a steady pace.
Further growth of activities in the GOG.COM segment, including the potential to acquire unique know-how and
experience, and to fully leverage the Company’s technological expertise, will be influenced by development
of features which support sales on the platform, including better integration of GOG GALAXY monetization
mechanisms with the GOG.COM storefront, as well as increased focus on expanding the GOG.COM catalogue
with classic games.
OTHER FACTORS
The growth of the CD PROJEKT Group will also be aected by development work carried out by its subsidiary –
The Molasses Flood.
Factors which, in the issuer’s opinion, will have a significant effect
on its earnings in the scope of at least the coming quarter
On 26 September 2023, at the end of Q3 2023, the Company plans to release a large expansion for Cyberpunk 2077.
Phantom Liberty will appear on Xbox Series X|S, Playstation 5 and PC. The expansion’s marketing campaign
and its market reception may also significantly aect sales of the base game. Moreover, the Company plans to
release Update 2.0 – the biggest-yet update for Cyberpunk 2077, geared for the PC and next-gen consoles.
Disclosure of significant agreements
No significant agreements were entered into by CD PROJEKT in the reporting period.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
34 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Basic threats and risks pertaining to the
remaining months of the financial year
The CD PROJEKT Group is exposed to a range of risks, both financial and otherwise, associated with its busi-
ness activities. The risk management process in place at the Company aims to identify, assess, analyze and
manage each risk.
In the scope of the remaining months of the current financial year, a particularly notable event for CD PROJEKT RED
will be the release of Phantom Liberty – a large expansion for Cyberpunk 2077. The release will aect the
Group’s earnings, depending on its commercial success and reception among gamers. The risk of non-attain-
ment of production goals related to product quality and gameplay attractiveness may result, among others, in
additional expenses, reduced sales revenues or damage to the Studio’s reputation. The market reception of the
Cyberpunk expansion may also aect long-term popularity and sales of the base edition of Cyberpunk 2077. To
achieve its production goals, the Company makes every eort to ensure that games are published on schedule,
and with the highest possible quality. The Company also monitors and analyzes its processes on an ongoing
basis, and – insofar as possible – introduces changes which may benefit product quality, the development
process or distribution of video games.
Persistent external and internal risk factors which the Management Board regards as material and which may
aect the activities and growth prospects of the Group are described in the risk assessment section of the
Management Board report on CD PROJEKT Group activities in 2022, while a description of financial risks can
be found in the Consolidated Financial Statement of the CD PROJEKT Group for 2022. The Company regards
risk factors described therein as relevant in the scope of the remaining months of the current financial year.
CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
03
RESULTS OF OPERATION
OF THE CD PROJEKT GROUP
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
36 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Discussion of the key economic and financial figures
disclosed in the consolidated financial statements
CONSOLIDATED INCOME STATEMENT
Table 3 Consolidated income statement of the CD PROJEKT Group (in PLN thousand)
01.01.2023 –
30.06.2023
01.01.2022 –
30.06.2022* change change %
Sales revenue - -.%
Sales of products - -.%
Sales of services - -.%
Sales of goods for resale and materials - -.%
Cost of sales of products, services, goods
for resale and materials
.%
Costs of products and services sold .%
Cost of goods for resale and materials sold .%
Gross profit/(loss) on sales - -.%
Selling expenses - -.%
Administrative expenses .%
Other operating income .%
Other operating expenses .%
(Impairment)/reversal of impairment of
financial instruments
- -.%
Operating profit/(loss) - -.%
Finance income .%
Finance costs .%
Profit/(loss) before tax - -.%
Income tax - -.%
Net profit/(loss) - -.%
*restated data
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
37 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
DESCRIPTION AND ASSESSMENT OF THE FACTORS AND UNUSUAL EVENTS AFFECTING
THE RESULTS OF OPERATIONS OF THE CD PROJEKT GROUP IN THE FIRST HALF OF 2023
The following unusual events had a material impact on the results, assets, equity & liabilities and cash flows of
the CD PROJEKT Group in the reporting period (which was not observed in the comparative period):
■ In the CD PROJEKT RED segment, in connection with the determination of the new framework for the Sirius
project developed by The Molasses Flood studio, a write-down of expenditure incurred on development
work until the end of 2022 was partially reversed (an increase in the balance of Other operating income
of PLN 21 531 thousand) and a part of the expenditure incurred on the project in the first quarter of 2023 was
written o (an increase in the balance of Other operating expenses of PLN 2 745 thousand). This materially
aected the Group’s net profit or loss and the relevant items of the Statement of financial position and the
Statement of cash flows presented in this Report,
■ In connection with the fact that CD PROJEKT S.A. is taking advantage of the innovative employee tax relief, the
CD PROJEKT RED segment reduced current personal income tax liabilities under PIT4 and PIT8A and recog-
nized income in this respect (an increase in the balance of Other operating income of PLN 7 718 thousand); at
the same time, the deferred tax asset relating to the R&D relief available in subsequent periods was reduced
accordingly, resulting in an increase in the balance of Income tax in the Income statement,
■
In the second quarter of the current year, Incentive Plan A and Incentive Plan B were introduced in the CD PROJEKT
Group, replacing the existing incentive program operated since 2020. The cost of rights awarded as part of
the said incentive plans determined by an actuarial valuation were accounted for partly as modifications. The
settlement of costs of this modification, taking into account earlier periods of the former incentive plan, resulted
in a one-o increase in the cost associated with the functioning of the incentive plans in the reporting period.
The total amount of the Group’s costs relating to the functioning of the incentive plans in the first half of 2023
was PLN 10 392 thousand.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
38 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
DISCUSSION OF THE CONSOLIDATED INCOME STATEMENT OF
THE CD PROJEKT GROUP BY OPERATING SEGMENT
CD PROJEKT RED segment
Table 4 Income statement of the CD PROJEKT RED segment (in PLN thousand)
01.01.2023 –
30.06.2023
01.01.2022 –
30.06.2022* change change %
Sales revenue - -.%
Sales of products - -.%
Sales of services - -.%
Sales of goods for resale and materials - -.%
Cost of sales of products, services, goods
for resale and materials
.%
Costs of products and services sold .%
Cost of goods for resale and materials sold .%
Gross profit/(loss) on sales - -.%
Selling expenses - -.%
Administrative expenses .%
Other operating income .%
Other operating expenses .%
(Impairment)/reversal of impairment of
financial instruments
- -.%
Operating profit/(loss) - -.%
Finance income .%
Finance costs .%
Profit/(loss) before tax - -.%
Income tax - -.%
Net profit/(loss) - -.%
*restated data
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
39 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
In the first half of 2023, Sales of products of this segment comprised:
■ revenue relating to Cyberpunk 2077;
■ revenue relating to Witcher 3: Wild Hunt and expansions: Hearts of Stone and Blood and Wine;
■ licence revenue from franchises;
■ revenue relating to the games of the CD PROJEKT RED segment (GWENT: The Witcher Card Game, Witcher
2, and Thronebreaker: The Witcher Tales and other).
In the first half of 2023, Sales revenue was lower compared with the corresponding period of the prior year, due
to the release of Cyberpunk 2077 for new generation consoles in the first quarter of the prior year, among other
things. The release made the first quarter of 2022 the best first quarter in the Group’s history. At the same time,
a decrease in revenue given an unchanged portfolio of games of the CD PROJEKT RED segment and absence
of material sales-boosting events is a natural trend (from the marketing perspective, the Company focused of
preparing for the release of the Phantom Liberty expansion planned for the end of the third quarter of 2023).
In the first half of 2023, Sales of services comprised mainly revenue relating to services provided to related
entities. A decrease in this item in relation to the comparative period is due to extinguishing operations and
merging with CD PROJEKT S.A. its subsidiaries Spokko Sp. z o.o. and CD PROJEKT RED STORE sp. z o.o.
Sales of goods for resale and materials of the CD PROJEKT RED segment at the end of June 2023 comprised
mainly revenue from the sale of ready-made physical sets and elements of physical sets of own titles (media,
boxes, figurines, gadgets), mainly The Witcher 3, to distributors as well as sales of physical products relating to the
segment’s franchise. A decrease in this item in relation to the comparative period was mainly due to extinguish-
ing the operation of the mail-order shop CD PROJEKT RED GEAR and reorganizing the mode of its functioning.
The most significant component of the Cost of sales of products, services, goods for resale and materials
of the CD PROJEKT RED segment was the Cost of products and services sold, where mainly the cost of
amortization of expenditure on development projects – own games manufactured is presented. In the first
half of 2023, this item comprised mainly amortization of expenditure on Cyberpunk 2077, which, following the
recognition in costs of 40% of the expenditure in the quarter when the game premièred (the fourth quarter of
2020) is recognized in subsequent quarterly periods at 3% of the initial value of the asset, and amortization of
The Witcher 3 edition of the game for consoles of a new generation, Xbox Series X|S and Playstation 5, issued
in December 2022, which materially increased the value of this item compared with the comparative period.
In the first half of 2023, the Cost of sales of goods for resale and materials contained the cost of manufacture
of ready-made physical sets of own titles, their elements and franchise products sold to distributors.
The Cost of sales of the CD PROJEKT RED segment in the period discussed comprised:
■
costs of promotion and sales support relating to the approaching première of the expansion of Cyberpunk 2077
titled Phantom Liberty;
■ cost of promotion and sales support relating to other products of the CD PROJEKT RED studio, mainly those
relating to the development of own franchises and the edition of The Witcher 3 for new generation consoles
Xbox Series X|S and Playstation 5;
■ cost of maintenance and updating of the CD PROJEKT RED studio games being sold, mainly Cyberpunk 2077
and The Witcher 3;
■ maintenance costs relating to GWENT: The Witcher Card Game.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
40 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Compared with the first half of 2022, the segment maintained the costs of promotion and sales support at a
similar level, while at the same time reducing the costs of servicing and maintaining the games issued.
Administrative expenses of the CD PROJEKT RED segment in the first half of 2023 comprised, in particular:
■ fixed remuneration of the administrative teams and the external costs of third party services classified in this
category which, in step with an increase in the employment levels and the scale of operations of the seg-
ment’s companies, are growing gradually;
■ performance-based remuneration of the management;
■
the cost associated with the functioning of the existing incentive plan and the implementation of the new Incentive
Plans A and B, including the costs of accounting for the modification of entitlements in the existing incentive plan
in connection with its replacement with entitlements in the new Incentive Plans – see the description above in
section Description and assessment of the factors and unusual events aecting the results of operations of
the CD PROJEKT Group in the first half of 2023;
■ costs of work on the future games incurred at an initial stage (research phase) preceding the execution of the
projects (development phase) and the start of their capitalization as part of Expenditure on development projects
forming part of Non-current assets, which comprise mainly costs of the projects which are at an initial stage of
production: Hadar (a new franchise) and Orion (another title in the Cyberpunk universe);
■ the fixed part of the remuneration of the management boards of the companies.
As regards Other operating income and expenses, as a rule, the Group recognizes mainly the revenue gen-
erated by CD PROJEKT RED from the lease of oce space (and the accompanying maintenance costs) in the
real estate complex located at ul. Jagiellońska 74 and 76 in Warsaw, and subsidies received. However, in the
period under discussion, the following factors had a material impact on that item:
■ a partial reversal of the impairment write-down of expenditure incurred until the end of 2022 on development
work (of PLN 21 531 thousand and a write-o of a part of the project expenditure incurred in the first quarter of
2023 (PLN 2 745 thousand) in connection with the determination of the new framework for the Sirius project
developed by The Molasses Flood studio;
■ recognizing a positive eect of the utilization of the tax relief for innovative employees by CD PROJEKT S.A.
In the first half of 2023, the CD PROJEKT RED segment showed an excess of Finance income over Finance
costs higher than the one reported in the comparative period. This is mainly due to an increase in interest
income on bank deposits.
Income tax, in addition to the current tax and the change in the deferred tax, included a charge relating to a
portion of the tax collected in other jurisdictions on the licence fees paid to the Company (withholding tax).
Following collection of the documents confirming the amounts and the fact of payment of withholding tax
abroad, the Company deducted the foreign withholding tax from the domestic corporate income tax amount,
a significant portion of which was calculated using a preferential IP Box tax rate (5%) and charged the excess
to the income statement.
Moreover, due to utilization by CD PROJEKT S.A. of the tax relief for innovative employees, the CD PROJEKT RED
segment reported an increase in deferred tax, as a result of, among other things, a decrease in the deferred
tax asset relating to the R&D tax relief available to the Company (at the same time, Other operating income
increased due to utilization of the tax relief for innovative employees).
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
41 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
The consolidated Net profit of the CD PROJEKT RED segment for 2023 amounted to PLN 91 420 thousand
and was PLN 22 055 thousand (19.4%) higher than in the comparative period.
GOG.COM segment
Table 5 Income statement of the GOG.COM segment (in PLN thousand)
01.01.2023 –
30.06.2023
01.01.2022 –
30.06.2022* change change %
Sales revenue - -.%
Sales of products - - - -
Sales of services .%
Sales of goods for resale and materials - -.%
Cost of sales of products, services, goods
for resale and materials
- -.%
Costs of products and services sold - -.%
Cost of goods for resale and materials sold - -.%
Gross profit/(loss) on sales - -.%
Selling expenses - -.%
Administrative expenses .%
Other operating income - -.%
Other operating expenses - -.%
(Impairment)/reversal of impairment of
financial instruments
- - - -
Operating profit/(loss) - -.%
Finance income - -.%
Finance costs - -.%
Profit/(loss) before tax - - -.%
Income tax - -.%
Net profit/(loss) - - -,%
*restated data
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
42 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
The total Sales revenue of the GOG.COM segment comprises mainly Sales of goods for resale and materials
related to the digital distribution of games from GOG.COM’s external suppliers to final customers, carried out
via the GOG.COM platform and the GOG GALAXY application.
Sales of goods for resale and materials for the first half of 2023 was 5.1% lower compared with the correspond-
ing period of 2022. At the same time, a part of realized sales relating to pre-selling of the Cyberpunk 2077
expansion Phantom Liberty, was classified as deferred income and will be recognized as sales of goods for
resale and materials when the expansion has been released.
Moreover, during the reporting period, a number of first releases appeared on oer in the shop, such as new
editions of the classical versions of System Shock and Pharaoh: A New Era, as well as Warhammer 40,000:
Dawn of War, Age of Wonders 4: Premium Edition or SpellForce: Conquest of Eo. In the first half of 2023, seven
titles from a very popular action game series Yakuza, created by a legendary Japanese company SEGA, were
added to the GOG platform. The series is famous for its engaging storyline and unique combat mechanics,
which have been winning the hearts of gamers for more than a decade.
In addition, starting from March 2022, in response to the invasion of Ukraine by the Russian armed forces, the
Company continued its policy of not selling the games available on the platform in Russia and Belarus, which
had a negative impact on the level of revenue earned year-on-year.
The Cost of sales of goods for resale and materials, which accompany sales directly, dropped compared with
the comparative period in line with lower revenue.
In the period discussed, Selling expenses of the GOG.COM segment slightly decreased compared with 2022.
Among the Selling expenses shown in the GOG.COM segment, the following items have the most significant share:
■
the remuneration of the team responsible for operating, development and promotion of the GOG.COM platform,
as well as maintenance and further development of the GOG GALAXY application;
■ transaction costs related to the processing of payments on the GOG.COM platform;
■ the costs of the ICT infrastructure related to making sales;
■ the costs of the marketing activities concerning the GOG.COM website and the GOG GALAXY application – in
the analysed period, these were primarily the costs of a promotion related to the digital distribution of games
on the GOG.COM platform;
■ the amortization/depreciation expense, including the amortization of completed development projects.
The main components of the Administrative expenses of the GOG.COM segment are the remuneration of
the administrative teams, fixed remuneration of the Company’s Management Board, as well as the costs of
other external services classified in this category. An increase in Administrative expenses in the period dis-
cussed compared with the comparative period by almost one fourth was mainly due to an increase in current
costs associated with the functioning of the incentive plans (see information contained in section Description
and assessment of the factors and unusual events aecting the results of operations of the CD PROJEKT
Group in the first half of 2023) and one-o expenses relating to post-implementation analyses associated with
the planned optimization and expansion of the systems supporting financial processes.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
43 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
In the first half of 2023, the GOG.COM segment showed an excess of Finance costs over Finance income.
This is primarily an excess of foreign exchange losses over foreign exchange gains. The increase in foreign
exchange losses in the GOG.COM segment is mainly the result of the translation of liabilities to suppliers as at
the balance sheet date.
The Income tax for the first half of the current year consisted mainly of the change in deferred tax.
The Net loss of the GOG.COM segment in the first half of 2023 amounted to PLN 141 thousand compared with
a Net profit of PLN 353 thousand in the comparative period.
Table 6 Net profitability ratio – Alternative Performance Measure
01.01.2023 –
30.06.2023
01.01.2022 –
30.06.2022
01.01.2023 –
30.06.2023
01.01.2022 –
30.06.2022
01.01.2023 –
30.06.2023
01.01.2022 –
30.06.2022
GRUPA CD PROJEKT Segment CD PROJEKT RED Segment GOG.COM
Net profitability
(Net profit/Sales revenue
.% .% .% .% -.%
.%
The Net profitability ratio presents additional information, indicating what part of Sales revenue remains in the
enterprise in the form of a Net profit after covering all the costs and tax charges shown in the Income statement.
An increase in the value of this ratio means an increase in the eectiveness of the activities carried out, related
to the level of the Sales revenue earned. The ratio used is a standard and commonly used measure in financial
analysis, and its usefulness was analysed in terms of the information provided to investors on the eectiveness
of the activities of the CD PROJEKT Group and its segments.
In the first half of 2023, the Group’s Net profitability ratio was 28.1%.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
44 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
CONSOLIDATED STATEMENT OF FINANCIAL POSITION OF THE CD PROJEKT GROUP
Table 7 Consolidated statement of financial position of the CD PROJEKT Group (in PLN thousand)
30.06.2023 31.12.2022 change change %
NON-CURRENT ASSETS .%
Property, plant and equipment .%
Intangible assets .%
Expenditure on development projects .%
Investment properties - -.%
Goodwill .%
Shares in non-consolidated subordinated
entities
.%
Prepayments and deferred costs .%
Other financial assets .%
Deferred tax assets - -.%
Other receivables - -.%
CURRENT ASSETS - -.%
Inventories - -.%
Trade receivables - -.%
Current income tax receivable .%
Other receivables - -.%
Prepayments and deferred costs - -.%
Other financial assets - -.%
Bank deposits over months - -.%
Cash and cash equivalents - -.%
TOTAL ASSETS - -.%
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
45 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
30.06.2023 31.12.2022 change change %
EQUITY .%
Share capital - -.%
Supplementary capital .%
Share premium .%
Treasury shares - - - -.%
Other reserves .%
Foreign exchange dierences on
translation
- -.%
Retained earnings (Accumulated losses) - - -.%
Net profit (loss) for the period - -.%
NON-CURRENT LIABILITIES - -.%
Other financial liabilities - -.%
Other liabilities - -.%
Deferred tax provision - -.%
Deferred income - -.%
Provision for retirement and similar
benefits
.%
Other provisions - -.%
CURRENT LIABILITIES - -.%
Other financial liabilities - -.%
Trade payables - -.%
Current income tax liabilities - -.%
Other liabilities .%
Deferred income .%
Provision for retirement and similar
benefits
.%
Other provisions - -.%
TOTAL LIABILITIES AND EQUITY - -.%
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
46 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
DISCUSSION OF THE CONSOLIDATED STATEMENT OF
FINANCIAL POSITION OF THE CD PROJEKT GROUP
Assets
The item Expenditure on development projects, in which the Group recognizes expenditure on the development
of new products and technologies, incurred and deferred, had the largest share in the value of the Group’s
Non-current assets as at the end of the first half of 2023, as well as the greatest impact on the increase in the
balance thereof. An increase in the item discussed in the period discussed is mainly due to expenditure incurred
by the CD PROJEKT RED segment on the production of future games (Cyberpunk 2077: Phantom Liberty, Polaris
and Sirius) in the amount higher than the depreciation of the productions completed.
The balance of Property, plant and equipment consists primarily of:
■ the value of the real estate complex at ul. Jagiellońska 74 and 76, the recognized part thereof being the part
to be used by CD PROJEKT S.A. for its own purposes;
■
plant and machinery, where the Group recognizes, among other things, computers, servers and other electronic
devices used in its activities;
■ assets in respect of the right of use of leased oce space (with the adequate value of Other financial liabilities
in respect of concluded contracts on the lease of space being recognized on the Equity and liabilities side at
the same time).
An increase in Property, plant and equipment in the period discussed was mainly due to expenditure on net-
work infrastructure and workstations for developers (plant and machinery), expenditure on construction work
at the CD PROJEKT campus in Warsaw (assets under construction) and reclassification of a part of investment
properties to real properties intended for own use (buildings and structures).
The most significant items recognized in Intangible assets are mainly the value of the CD PROJEKT corporate
brand and the The Witcher trademark, as well as the value of the copyright and computer software held by the
Group. The value of the item did not change materially in 2023.
The CD PROJEKT Group’s Goodwill is composed of amounts resulting from accounting for the merger of the
parent company with the CDP Investment Group on 30 April 2010 and accounting for the acquisition of a
development studio located in Wrocław by CD PROJEKT S.A. from Strange New Things sp. z o.o. sp. k. on 18
May 2018. The Goodwill reported did not change over the discussed period.
The balance of Investment properties consists of the values of the properties at ul. Jagiellońska 74 and ul.
Jagiellońska 76, the parts thereof classified as earmarked for lease (both to related entities and external les-
sees). A decrease in this item is due to reclassification of a part of the buildings to those intended for own use,
and to depreciation.
The value of Shares in non-consolidated subordinated entities 2022 comprised the equity of Spokko Sp. z o.o.,
The Molasses Flood LLC in Boston, CD PROJEKT RED Vancouver Studio Ltd.
As at the end of the first half of 2023, Inventories comprised mainly of ready-made physical sets and elements
of physical sets of the editions of games of own production intended for external distributors and franchise
goods for resale relating to CD PROJEKT RED’s brands, and a decrease in inventories is due to the completion
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
47 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
of current orders and to extinguishing the operation of the mail-order shop CD PROJEKT RED GEAR and
changing the mode of its functioning.
The consolidated balance of Trade receivables decreased in the period discussed mainly due to the inflow of
royalties obtained in the CD PROJEKT RED segment in the fourth quarter of 2022.
A decrease in the Group’s Other receivables as at the end of June 2023 is primarily the result of a decrease in
receivables in respect of the withholding tax deducted by the foreign recipients of the licences granted by the
CD PROJEKT RED segment. Moreover, as at the end of June 2023 the Group companies recognize settlements
in respect of VAT and advances to suppliers and security deposits in the discussed item.
The consolidated value of the short-term and long-term Prepayments and deferred costs recognized as at
the end of the analysed period was mainly aected by the amount of the so-called minimum guarantees, i.e.
advances and prepayments made by GOG.COM to its suppliers towards fees for the distribution of games
oered on the GOG.COM platform, not recognized in the income statement by the balance sheet date. The
increase in the discussed item is mainly due to the conclusion of new contracts by GOG.COM for subsequent
products which will join the list of games available on GOG.COM. In addition, the item includes, among others,
deferred fees for software, licences and rights and prepayment related to marketing activities.
Current and non-current Other financial assets as at 30 June 2023 comprise:
■ the value of domestic and foreign Treasury bonds purchased by CD PROJEKT S.A. as part of the diversification
of credit risk, including the measurement of derivative financial instruments securing the value of bonds in
foreign currencies;
■ the value of loans granted to non-consolidated related entities, where an increase in the balance is due to
granting the financing for refurbishment of and equipment for an oce to The Molasses Flood LLC;
■ the value of investment in private equity funds.
The total value of financial reserves in the form of Cash and cash equivalents, Bank deposits over 3 months
and liquid financial assets in the form of purchased Treasury bonds (recognized in total in current and
non-current Other financial assets) held by the Group as at 30.06.2023 amounted to PLN 930 657 thousand,
i.e. PLN 160 348 thousand less than the balance as at the end of 2022.
Non-current assets accounted for 59.5%, and Current assets – 40.5% of the total assets of the CD PROJEKT
Group as at 30 June 2023.
Equity and liabilities
As at 30 June 2023, the value of the Equity of the CD PROJEKT Group was comparable with the balance as
at the end of 2022. A decrease in the balance resulting from the payment of dividend for 2022 was oset by
the net profit for the current period and an increase in equity resulting from accounting for the costs of incen-
tive plans during the reporting period.
In current and non-current Other financial liabilities, the Group recognizes liabilities in respect of the perpetual
usufruct of land at the Jagiellońska 74 and Jagiellońska 76 complexes in Warsaw and liabilities in respect of
payment of a part of the purchase price of the shares in The Molasses Flood with a deferred payment term.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
48 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
In the first half of 2023, the value of the Group’s Current liabilities decreased significantly, mainly in items
Other provisions and Trade payables.
The balance of the Group’s Trade payables as at the end of the first half of 2023 comprised mainly trade pay-
ables of the GOG.COM segment in respect of the so-called minimum guarantees concerning the new titles of
the GOG.COM platform, contracted in the reporting period. However, a decrease in the balance of the item
discussed is due to a decrease in trade payables in the CD PROJEKT RED segment.
Other liabilities include mainly the Group’s tax liabilities (VAT, PIT, withholding tax) and social security payables.
In Deferred income (current and non-current) as at the end of June 2023, the Group’s segments recognized mainly:
■ CD PROJEKT RED - prepayments received or due in respect of royalties related to pre-sale and sale in future
periods, including the so-called minimum guarantees from publishers and distribution partners;
■ GOG.COM – the value of pre-orders for games with a release date in future periods, placed by customers;
■
GOG.COM – deferred income settlements with the Company’s customers (including the Store credit and Wallet
granted);
■ CD PROJEKT RED and GOG.COM – deferred income concerning subsidies.
An increase in the balance of Deferred income compared with the end of 2022 is mainly due to starting, on 12
June 2023, to accept early orders for the Phantom Liberty expansion of Cyberpunk 2077 which is planned to
be released in September 2023.
A decrease in the balance of Other provisions (current and non-current) of the CD PROJEKT Group concerned
mainly the CD PROJEKT RED segment, where:
■ the balance of provisions for performance-based remuneration decreased due to the payment of bonuses for
2022 in the current period, combined with the introduction in the current year of a change to the remuneration
policy of CD PROJEKT RED which reduced the performance-based bonus in favour of fixed remuneration and
the introduction of share-based incentive plans;
■ there was an excess of provision for other costs utilized over the balance of newly created provisions.
In the Equity and liabilities of the CD PROJEKT Group as at 30 June 2023, Equity represented 93.3%, whereas
Current and Non-current liabilities represented 6.7%.
The consolidated statement of financial position by business segment of the Group is contained in the Interim
condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to 30
June 2023.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
49 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
DESCRIPTION OF THE STRUCTURE OF ASSETS AND EQUITY & LIABILITIES OF THE
CONSOLIDATED BALANCE SHEET, INCLUDING FROM THE PERSPECTIVE OF LIQUIDITY
As at the end of the first half of 2023, the CD PROJEKT Group had assets with a carrying amount of PLN
2 180 597 thousand. Within these assets, liquid financial reserves maintained in bank accounts, in the form of
bank deposits and government Treasury bonds (foreign and domestic) amounted to PLN 930 657 thousand and
represented 42.7% of total assets. Assets with limited liquidity (Property, plant and equipment, Expenditure on
development projects, Investment properties and Shares in non-consolidated subordinated entities) totalling PLN
838 490 thousand represented 38.5% of total assets. As at 30 June 2023, the total of Trade receivables, Other
current receivables and Inventories amounted to PLN 134 034 thousand, whereas the total value of current and
non-current liabilities amounted to PLN 146 800 thousand. As at the end of the first half of 2023, the Group did
not have any external liabilities in respect of loans or borrowings.
The accumulated cash and cash equivalents, deposits and Treasury bonds ensure the Group’s high liquidity
and may be used to secure the financing of the Group’s further development, including the financing of the
development of future products and technologies, promotional support for scheduled premières, securing future
investment opportunities and ensuring provisions for possible unplanned situations or emerging opportunities.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
50 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
CONSOLIDATED STATEMENT OF CASH FLOWS OF THE CD PROJEKT GROUP
Table 8 Consolidated statement of cash flows of the CD PROJEKT Group (in PLN thousand)
01.01.2023 –
30.06.2023
01.01.2022 –
30.06.2022
OPERATING ACTIVITIES
Net profit/(loss)
Total adjustments:
Depreciation and amortization of property, plant and equipment, intangible
assets, expenditure on development projects and investment properties
Amortization of development projects recognized as cost of goods sold
Foreign exchange (gains)/losses ( )
Interest and participation in profits ( ) ( )
(Gains)/losses on investing activities ( )
Increase/(Decrease) in provisions ( ) ( )
(Increase)/Decrease in inventories
(Increase)/Decrease in receivables
Increase/(Decrease) in liabilities, excluding loans and borrowings ( )
Change in other assets and liabilities ( ) ( )
Other adjustments
Cash from operating activities
Income tax expense
Withholding tax paid abroad
Income tax (paid)/refunded ( ) ( )
Net cash from operating activities
INVESTING ACTIVITIES
Inflows
Sale of intangible assets and property, plant and equipment
Repayment of loans granted -
Expiry of bank deposits over months
Redemption of bonds
Interest on bonds
Interest received on deposits
Inflows from execution of forward contracts -
Other cash inflows from investing activities
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
51 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
01.01.2023 –
30.06.2023
01.01.2022 –
30.06.2022
Outflows
Acquisition of intangible assets and property, plant and equipment
Expenditure on development projects
Expenditure on intangible assets -
Acquisition of investment properties and capitalization of expenditure
Loans granted
Purchase of shares in a subsidiary -
Contribution to the capital of a subsidiary -
Purchase of bonds and cost of their purchase
Placement of bank deposits over months -
Outflows from execution of forward contracts -
Other outflows on investing activities -
Net cash from investing activities ( )
FINANCING ACTIVITIES
Inflows
Payment of finance lease liabilities
Interest paid -
Outflows
Dividends and other distributions to shareholders -
Payment of lease liabilities
Interest paid
Net cash used in financing activities ( ) ( )
Net increase/(decrease) in cash and cash equivalents ( )
Change in cash and cash equivalents in the balance sheet ( )
Cash and cash equivalents as at the beginning of the period
Cash and cash equivalents as at the end of the period
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
52 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
DISCUSSION OF THE CONSOLIDATED STATEMENT OF CASH FLOWS OF THE CD PROJEKT GROUP
Under Operating activities in the first half of 2023, the CD PROJEKT Group showed net cash inflows
of PLN 121 599 thousand, i.e. PLN 21 057 thousand less than in the comparative period.
The consolidated net profit was adjusted for:
I. Non-cash items (a decrease in total):
■ Depreciation/Amortization, mainly of Property, plant and equipment and Intangible assets;
■ Amortization of development projects, recognized as the cost of sales, corresponding primarily to
the amortization of expenditure on development projects related to Cyberpunk 2077 together with the
edition of The Witcher 3 for new generation consoles, Xbox Series X|S and Playstation 5;
■ Foreign exchange gains (losses), an increase resulting mainly from the translation of foreign Treasury
bonds;
■
Gains/(Losses) on investing activities, a decrease resulting from transactions with bonds and derivative
financial instruments, and a reversal of a write-down of the Sirius project asset.
■
Increase/(decrease) in provisions, a decrease resulting mainly from the payment of performance-based
remuneration for 2022 in the reporting period;
■ Other adjustments, an increase resulting mainly from the elimination of accounting for the costs of the
incentive plan and adjustments to the amortization/depreciation recognized in the cost of sales and
operating expenses.
II. Items related to changes in current assets and short-term liabilities (an increase in total):
■ (Increase)/decrease in inventories, an increase in the balance of cash flows as a result of a drop in
inventories;
■ (Increase)/decrease in receivables, an increase in the balance of cash flows resulting primarily from a
decrease in the balance of receivables as at the end of the first half of 2023 in the CD PROJEKT RED
segment, related to the inflow of royalties reported for the fourth quarter of 2022;
■ Increase/(decrease) in liabilities, excluding loans and borrowings, a decrease in the balance of cash
flows in consequence of a decrease in the balance of the Group’s liabilities;
■ Change in other assets and liabilities, a decrease in the balance of cash flows resulting mainly from
an increase in the balance of the so-called minimum guarantees contracted during the reporting period
by GOG.COM;
III. Item recognized in other sections of the statement of cash flows – Interest and shares in profits, resulting
in a decrease in the cash flows shown under operating activities;
IV.
Dierence between the corporate income tax recognized in the income statement (an increase) and the tax
actually paid during the first half of 2023, taking into account settlements related to withholding tax.
After excluding operations relating to inflows from maturing bank deposits and Treasury bonds and outflows
relating to placement of new bank deposits and purchase of new Treasury bonds, outflows relating to investment
in assets, primarily in Expenditure on development projects (i.e. work on the new games) and in Property, plant
and equipment had the largest eect on the negative balance of Net cash flows from investing activities in
the first half of 2023.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
53 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Negative Net cash from financing activities of the CD PROJEKT Group in the first half of 2023 were mainly
due to the payment of dividend (PLN 99 911 thousand) for 2022.
In total, in the first half of 2023, by investing, among other things, PLN 162 616 thousand in Expenditure on
development projects and by paying the dividend of PLN 99 911 thousand for 2022 to shareholders, the
CD PROJEKT Group generated negative Net cash flows of PLN 128 491 thousand.
INFORMATION ON LOANS AND BORROWINGS IN THE FIRST HALF OF 2023
In the reporting period, the CD PROJEKT Group did not have any external liabilities in respect of loans or
borrowings.
INFORMATION ON LOANS GRANTED IN THE FIRST HALF OF 2023
In the reporting period, none of the CD PROJEKT Group companies granted any loans to non-Group entities.
As at 30 June 2023, the debt resulting from a loan granted to The Molasses Flood LLC by CD PROJEKT S.A.
amounted to USD 1 150 thousand.
INFORMATION ON SURETIES AND GUARANTEES GRANTED IN THE FIRST
HALF OF 2023 AND OTHER MATERIAL OFFBALANCESHEET ITEMS
Information on sureties and guarantees and other material o-balance-sheet items is presented in the Interim
condensed consolidated financial statements of the CD PROJEKT Group for the period from 1 January to
30 June 2023.
TRANSACTIONS WITH RELATED ENTITIES
Within the activities of the CD PROJEKT Group in the first half of 2023, there were mainly the following types
of transactions between related entities:
■
sale of licences between CD PROJEKT S.A. and GOG sp. z o.o., The Molasses Flood LLC, as part of the activities
carried out by the individual entities;
■ provision of services such as: accounting, human resources and payroll management, legal, financial, adminis-
trative and management services rendered mainly by CD PROJEKT S.A. to related entities;
■
lease of oce space by CD PROJEKT S.A. to GOG sp. z o.o., Spokko sp. z o.o. and CD PROJEKT RED STORE sp. z o.o.;
■ sale of CD PROJEKT Inc.’s services to CD PROJEKT S.A. related to the coordination of publishing and promo-
tional activities in North America;
■ settlements relating to the loan granted to The Molasses Flood LLC by CD PROJEKT S.A.;
■ taking up shares in an increased share capital of CD PROJEKT Inc. by CD PROJEKT in order to capitalize the
subsidiary;
■ other immaterial ones, arising from current operating activities, e.g. reinvoicing jointly incurred costs.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
54 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Transactions between related entities are concluded on an arm’s length basis as part of the normal business
activities carried out by the CD PROJEKT Group entities. Detailed information about the terms and conditions of
transactions between related entities is contained in the Interim condensed consolidated financial statements
of the CD PROJEKT Group for the period from 1 January to 30 June 2023.
EXPLANATION OF THE DIFFERENCES BETWEEN THE FINANCIAL RESULTS SHOWN IN THE
SEMIANNUAL REPORT AND THE PREVIOUSLY PUBLISHED FORECASTS FOR A GIVEN YEAR
The CD PROJEKT Group has not published any financial forecasts for 2023, therefore, no explanations are
given for the dierences between the financial results shown in the report.
DESCRIPTION OF THE UTILIZATION OF ISSUE PROCEEDS BY THE
COMPANY BY THE DATE OF PUBLICATION OF THE REPORT
In the period from 1 January to 30 June 2023, the Company did not issue any new shares.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
55 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
04
CORPORATE GOVERNANCE
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
57 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Entity contracted to audit financial statements
On 9 March 2022 the Supervisory Board of CD PROJEKT S.A., acting on advice of the Audit Committee of the
Company’s Supervisory Board recommending extension of the Company’s contract with its licensed auditor,
decided to select Grant Thornton Polska sp. z o.o. sp. k. (now operating as Grant Thornton Polska PSA) with
a registered oce in Poznań as the entity contracted to conduct an audit and review of the separate and con-
solidated financial statements of the Company for 2022 and 2023.
Grant Thornton Polska PSA has also been contracted to audit the financial statement of GOG sp. z o.o.,
CD PROJEKT RED STORE sp. z o.o. and Spokko sp. z o.o.
Shareholders controlling at least 5% of the vote at the General Meeting
The Company’s share capital amounts to 99 910 510 PLN, divided into 99 910 510 shares with a nominal value of
1 PLN per share. The shareholding structure is determined on the basis of formal notices issued by shareholders
who control at least 5% of the total number of votes at the General Meeting of Shareholders.
Table 9 Shareholders controlling at least 5% of the vote at the General Meeting as of the publication date
of this report
Number
of shares
% share in
share capital
Number of votes
at the GM
% of total number of
votes at the GM
Marcin Iwiński .% .%
Michał Kiciński* .% .%
Piotr Nielubowicz .% .%
* As disclosed in the most recent declaration received by the Company – see Current report no. 33/2021 of 26 May 2021.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
58 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Agreements which may result in changes in the proportions
of shares held by shareholders and bondholders
INCENTIVE PROGRAM COVERING THE YEARS 20202025
Pursuant to General Meeting adopted on 28 July 2020 and 22 September 2020, a third edition of the Company
incentive program, covering the years 2020–2025, was formally instituted. In line with the adopted stipulations,
a total of 4 000 000 entitlements were to be granted under the program, defined as the conditional right to
take up subscription warrants incorporating the right to take up Company shares issued in the framework of
a conditional increase in the Company share capital, or, alternatively, to take advantage of an oer, extended
to entitled parties, to purchase Company shares which will have previously been bought back by the Company
on the open market. Acquisition and exercise of subscription warrants or the purchase of the parent Company’s
own shares by the entitled parties, as appropriate, was conditioned upon attaining certain goals and criteria
defined under the program. These included earnings goals (80% of entitlements), market goals (20% of enti-
tlements), individual goals (in selected cases) as well as – in all circumstances – fulfillment of a loyalty criterion
up until the day the attainment of the program’s goals and criteria is declared.
Further information regarding the incentive program for 2020–2025 can be found in the Management Board
report on CD PROJEKT Group activities in 2021.
Based on the earnings posted while the program was in force, along with projections covering subsequent
years covered by the program, the Management Board performed an analysis of the likelihood of meeting
earnings goals defined for the full duration of the program, and thereafter revised its assessment, declaring
that the goals of the program were unlikely to be fulfilled in the corresponding period.
On 20 December 2022 the General Meeting of the Company adopted resolution no. 5, canceling the imple-
mentation of the 2020–2025 incentive program. Given, however, that the entry into force of that resolution
was dependent on adoption of other resolutions instituting a new incentive program, the resolution concerning
cancelation of the 2020–2025 incentive program ultimately entered into force on 18 April 2023, with the eect
of fully canceling the program.
No new entitlements under the 2020–2025 Incentive Program were assigned during the reporting period. On
18 April 2023 there were 2 113 000 outstanding entitlements previously assigned under that program. In line
with the Terms and Conditions of the 2020–2025 incentive program, cancelation of the program also entails
cancelation of all entitlements assigned to entitled parties in its scope.
Incentive programs for 2023–2027
On 18 April 2023 the General Meeting of Company voted to institute two new incentive programs for the
financial years 2023–2027 replacing the 2020–2025 incentive program: Incentive Program A and Incentive
Program B respectively.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
59 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Incentive Program A
Incentive Program A is aimed at persons who are not members of the Company’s Management Board. According
to the adopted provisions, entitlements will be assigned under this program in each financial year belonging to
the 2023–2027 period (i.e. in five stages). The total number of entitlements assigned under Incentive Program
A may not exceed 1,500,000. Entitlements shall vest either by (i) extending an oer to participants to claim
subscription warrants which incorporate the right to take up the equivalent number of shares issued in the
framework of a conditional increase in the Company share capital, or (ii) extending an oer to participants to
purchase from the Company a certain number of own shares which the Company will have previously acquired
in the framework of a buy-back program instituted specifically for this purpose. The take-up and exercise of
subscription warrants or purchase of own shares from the Company, as appropriate, will require participants
to fulfill the loyalty condition, which is defined as the existence of a legal relationship between the participant
of Incentive Program A and the Company or an aliate thereof. The share take-up or purchase price in the
exercise of entitlements assigned under Incentive Program A will be equivalent to the nominal price of Company
shares. The vesting period is 3 years.
As of the publication date of this report a total of 100 444 entitlements have been assigned, 97 261 of which
remain outstanding.
Incentive Program B
Incentive Program B is aimed at persons who are members of the Company’s Management Board as well as at
persons who are not. According to the adopted provisions, entitlements will be assigned under this program
in each financial year belonging to the 2023–2027 period (i.e. in five stages). The total number of entitlements
assigned under Incentive Program B may not exceed 3,500,000. Entitlements shall vest either by (i) extending an
oer to participants to claim subscription warrants which incorporate the right to take up the equivalent number
of shares issued in the framework of a conditional increase in the Company share capital, or (ii) extending an
oer to participants to purchase from the Company a certain number of own shares which the Company will
have previously acquired in the framework of a buy-back program instituted specifically for this purpose. The
take-up and exercise of subscription warrants or purchase of own shares from the Company, as appropriate, will
depend on confirmation by the Company of the fulfillment of the earnings condition (for 70% of entitlements),
the market condition (for 30% of entitlements), certain individual conditions applied on a case-by-case basis, as
well as – in all cases – the loyalty condition, which is defined as the existence of a legal relationship between the
participant of Incentive Program B and the Company or an aliate thereof. The base share take-up or purchase
price in the exercise of entitlements assigned under Incentive Program B will be equivalent to the closing price
of Company stock on the last trading day preceding the adoption of a resolution enrolling the given participant
in the program. The program provides for a potential reduction in the take-up or purchase price coupled with
a proportional reduction in the number of entitlements exercisable by the given participant. The base vesting
period is equivalent to four consecutive financial years beginning with the year during which the given stage
of the program began (with an option to shorten the vesting period to 3 years for entitlements linked to the
earnings condition, should the four-year earnings target be met within the corresponding three-year period).
As of the publication date of this report a total of 662 000 entitlements have been assigned under Incentive
Program B, 662 000 of which remain outstanding.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
60 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Earnings condition – applicable to 70% of entitlements assigned
during each stage of Incentive Program B
The earnings condition is considered fulfilled if, during the given vesting period, the CD PROJEKT Group posts
sucient earnings, which are defined as the consolidated net profit from continuing activities aggregated with
the costs of estimating entitlements assigned during the given stage of Incentive Program B as entered in the
accounting records of CD PROJEKT Group member entities.
For entitlements assigned during the first stage of Incentive Program B (in the financial year 2023) the earnings
condition for the years 2023–2026 is 2 billion PLN.
For each subsequent stage of Incentive Program B, associated with the financial years 2024, 2025, 2026 and
2027 respectively, the corresponding four-year earnings condition will, in each case, be determined by the
General Meeting in the form of a resolution.
Market condition – applicable to 30% of entitlements assigned
during each stage of Incentive Program B
The market condition is defined as a as a change in the price of Company stock on the Warsaw Stock Exchange
in such a way that the percentage dierence between the closing price of Company stock on the final trading
session of the final year subject to verification in the context of the above-mentioned earnings condition com-
pared to the closing price of Company stock on the final trading session of the year preceding the year covered
by the given stage of Incentive Program B is equal to or greater than the corresponding percentage change in
the value of the WIG index increased by 10 percentage points over the same period.
Information regarding the control system of employee share programs
The share-based incentive programs in force as of the publication date of this report, i.e. Incentive Program
A and Incentive Program B for the years 2023–2027 were introduced by the General Meeting of the Company
on 18 April 2023. Detailed regulations applicable to these programs were adopted by the Management Board
of the Company on 21 May 2023 and subsequently approved by the Supervisory Board on 23 May 2023. The
full wording of these regulations is available on the Company’s corporate website.
Implementation of both programs is overseen by the Supervisory Board and the Management Board of
CD PROJEKT S.A.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
61 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Disclosure of the purchase of own shares
The Company did not purchase any own shares during the reporting period.
Company shares held by members of the Management
Board and the Supervisory Board
Table 10 Shares held by members of the Management Board and Supervisory Board of the Company*
Name Position as of 30.08.2023 as of 30.06.2023 as of 31.12.2022
Adam Kiciński President of the Board
Piotr Nielubowicz
Vice President of the
Board
Adam Badowski Board Member
Michał Nowakowski Board Member
Piotr Karwowski Board Member
Paweł Zawodny Board Member
Marcin Iwiński
Chairperson of the
Supervisory Board
Katarzyna Szwarc
Deputy Chairperson of
the Supervisory Board
Maciej Nielubowicz
Supervisory Board
Member
* based on declarations and notifications filed with the Company.
Persons discharging managerial and executive responsibilities at CD PROJEKT S.A. do not directly hold any
shares of entities aliated with CD PROJEKT S.A.
Management structure
Pursuant to domestic regulations expressed in the Commercial Companies Code, in addition to the General Meeting
of Shareholders, the Company’s corporate bodies include the Management Board and the Supervisory Board.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
62 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Composition of the Management Board of CD PROJEKT S.A.
Adam Badowski – Board Member
Heads the CD PROJEKT RED development studio which is owned by the Company.
Co-develops the conceptual framework and artistic vision of projects carried out at
CD PROJEKT RED.
Michał Nowakowski – Board Member
Co-develops and coordinates the Company’s global publishing activities. Oversees
formulation and implementation of the Company’s sales policies.
Piotr Karwowski – Board Member
Supervises the Group’s activities related to online games and services, as well as cyber-
security. Also responsible for the activities and development of the GOG.COM.
Paweł Zawodny – Board Member
Serves as Chief Technology Ocer (CTO) and head of production at CD PROJEKT RED.
Oversees the technological and organizational transformation of CD PROJEKT RED.
Jeremiah Cohn – Board Member
Responsible for overseeing the marketing and communication departments as Chief
Marketing Ocer (CMO). Also manages the newly established franchise development team.
Adam Kiciński – President of the Board
Oversees formulation of the Company’s and its Capital Group’s business strategies and
supports their practical implementation. Coordinates Company activities in the scope of
investor relations.
Piotr Nielubowicz – Vice President of the Board; Chief Financial Ocer
Coordinates the Company’s financial and accounting branches; ensures that the
Company meets its financial reporting obligations. Participates in investor relations.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
63 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Management Board members represent the Company and its Management Board. Management Board mem-
bers cooperate with one another, share information regarding important matters aecting the Company, jointly
manage the Company and jointly bear the associated responsibility. The Management Board formulates the
Company’s strategies, develops its financial plans and manages the Company in such a way as to ensure
implementation of these strategies and plans.
Chart 8
Tenure of incumbent members of the Management Board as employees at the Group’s mem-
ber companies (in years)
Paweł Zawodny
Jeremiah Cohn
Piotr Karwowski
Michał Nowakowski
Adam Badowski
Piotr Nielubowicz
Adam Kiciński
29
24
20
18
16
9
5
Changes in the composition of the Management
Board of CD PROJEKT S.A.
On 4 October 2022 the Company received a notice of resignation of Marcin Iwiński from his duties as Vice
President of the Management Board for International Aairs and Member of the Management Board, eective
at end of day on 31 December 2022. Concurrently, Mr. Iwiński also notified the Company of his intent to seek
appointment as Chairperson of the Supervisory Board of the Company starting on the day immediately following
expiration of his membership of the Management Board. On 20 December 2022 the Extraordinary General
Meeting of the Company appointed Marcin Iwiński to the Supervisory Board for its current term of oce, eective
on 1 January 2023. On the same day the Supervisory Board of the Company decided to appoint Marcin Iwiński
as Chairperson of the Supervisory Board for its current term of oce, eective on 1 January 2023. Consequently,
since 1 January 2023 the Management Board of the Company has consisted of seven person, as listed above
in the section titled Composition of the Management Board of CD PROJEKT S.A.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
64 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Composition of the Supervisory Board of CD PROJEKT S.A.
The incumbent members of the Supervisory Board of CD PROJEKT S.A. are as follows:
■ Marcin Iwiński – Chairperson of the Supervisory Board
■ Katarzyna Szwarc – Deputy Chairperson of the Supervisory Board
■ Maciej Nielubowicz – Secretary of the Supervisory Board; Member of the Audit Committee
■ Michał Bień – Supervisory Board Member; Member and Chairperson of the Audit Committee meeting inde-
pendence criteria
■ Jan Łukasz Wejchert – Supervisory Board Member; Member of the Audit Committee meeting independence
criteria
Changes in the composition of the Supervisory
Board of CD PROJEKT S.A.
On 20 December 2022 the Extraordinary General Meeting of the Company appointed Marcin Iwiński to the
Supervisory Board for its current term of oce, eective on 1 January 2023.
On the same day the Supervisory Board adopted a resolution which: (i) dismissed Ms. Katarzyna Szwarc from her
duties as Chairperson of the Supervisory Board for its current term, eective on 1 January 2023; (ii) appointed
Mr. Marcin Iwiński as Chairperson of the Supervisory Board for its current term of oce, eective on 1 January
2023; (iii) appointed Ms. Katarzyna Szwarc as Deputy Chairperson of the Supervisory Board for its current term
of oce, eective on 1 January 2023.
Moreover, in light of the above-mentioned changes in its composition, the Supervisory Board decided that
starting on 1 January 2023 the composition of the Audit Committee for the current term of oce of the Super-
visory Board would be as follows:
i)
Michał Bień – Chairperson of the Audit Committee meeting independence criteria specified in Art. 129 sec-
tion 3 of the Act on Licensed Auditors, Audit Firms and Public Supervision; Member of the Audit Committee
meeting criteria specified in Art. 129 section 5 of the said Act,
ii) Maciej Nielubowicz – Member of the Audit Committee possessing knowledge and skills in the scope of
accounting or auditing financial statements; Member of the Audit Committee meeting criteria specified in
Art. 129 section 5 of the Act on Licensed Auditors, Audit Firms and Public Supervision,
iii) Jan Łukasz Wejchert – Member of the Audit Committee meeting independence criteria specified in Art.
129 section 3 of the Act on Licensed Auditors, Audit Firms and Public Supervision; Member of the Audit
Committee meeting criteria specified in Art. 129 section 5 of the said Act, possessing knowledge and skills
in the scope of accounting or auditing financial statements.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
65 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Disclosure of retirement benefits and similar compensation payable
to former members of the Issuer’s executive, supervisory or
administrative bodies, and of any liabilities associated with such benefits,
specifying the aggregate amounts for each category of recipients
As of 30 June 2023 the Company has no such liabilities.
Agreements between the Issuer and members of its
managing and supervisory bodies concerning compensation
in the event of their resignation or dismissal
As of 30 June 2023 and as of the preparation date of this report there were no provisions in force regulat-
ing compensation of members of the Company’s Management Board in the event of their resignation or dismissal.
Changes in basic management practices at the Company and its Group
No significant changes in basic management policies aecting the Company and its Group occurred in the
first half of 2023.
Corporate governance policies
CD PROJEKT S.A. follows the corporate governance policies listed in the “Best Practice for WSE Listed Com-
panies 2021” document, published as an attachment to Resolution no. 13/1834/2021 of the Supervisory Board
of the Warsaw Stock Exchange on 29 March 2021. Details concerning the implementation of specific corporate
governance policies at CD PROJEKT S.A. can be found on the Company website at https://www.cdprojekt.com/
en/investors/corporate-governance/.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
66 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
Disclosure of significant legal proceedings
The following legal proceedings took place during the reporting period (the presented status is valid for the
publication date of this report):
CRIMINAL PROCEEDINGS IN WHICH CD PROJEKT S.A. IS RECOGNIZED AS THE VICTIM
Case against natural persons (including former members of the Management Board of Optimus S.A.)
charged with acting against the Company’s interests
In case no. XVIII K 126/09, following indictment filed by the District Attorney in the District Court for the City of
Warsaw, on 27 October 2016 the District Court convicted Mr. Michał L., Mr. Piotr L. and Mr. Michał D. of violating
sections 296 §1, 296 §3 and others of the Penal Code. The Company acted as an auxiliary prosecutor in the
court of first instance and will retain this status until the trial has concluded. Having found the defendants guilty,
the Court awarded the Company 210 thousand PLN in damages under Art. 46 of the Penal Code. According
to the operative part of the judgement total losses sustained by the Company as a result of the defendants’
actions were estimated at not less than 16 million PLN (this figure follows from standard regulations applicable
to criminal trials). The Company subsequently filed an appeal against the judgment, contesting, among others,
the amount of damages awarded to the Company. An appeal against the full judgement was also filed by the
defendants’ attorneys. On 26 October 2017 the Appellate Court vacated the judgment of the court of first instance
and remanded the case to be retried in full. The District Court for the City of Warsaw subsequently filed the
case under no. XVIII K 316/17. The parent company continues to act in the capacity of an auxiliary prosecutor.
LITIGATION IN WHICH CD PROJEKT S.A. IS NAMED AS THE DEFENDANT
Class action lawsuit filed against CD PROJEKT S.A. concerning US securities
On 25 December 2020 and subsequently on 15 January 2021 the Management Board of the Company received
information concerning the filing of civil class action lawsuits in the US District Court for the Central District of
California, by law firms acting on behalf of groups of holders of securities traded in the USA under the ticker
symbols “OTGLY” and “OTGLF” and based on Company shares, whereby the plaintis call for the court to adju-
dicate whether the actions undertaken by the Company and members of its Management Board in connection
with the release of Cyberpunk 2077 constituted a violation of federal laws, i.a. by misleading investors and,
consequently, causing them to incur damages. In subsequent months the Company was notified of two further
lawsuits filed in the aforementioned court, both of which were materially consistent with the lawsuit described
above, and also named CD PROJEKT as the defendant. None of these complaints specified the quantity of
damages sought. On 18 May 2021 the Company was notified that the court had consolidated the aforementioned
lawsuit and named a lead plainti. Following consolidation, all four lawsuits were merged into a single case.
On 29 June 2021 the Company received a transcript of a lawsuit filed against the Company and members of
its Management Board by a law firm representing the lead plainti and other eligible holders of US securities
traded under the ticker symbols “OTGLY” and “OTGLF”. The lawsuit was not materially dierent from earlier
lawsuits filed in this matter, and likewise, did not specify the amount of damages sought.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
67 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
On 12 August 2021 the Company filed a responsive pleading, asking that the complaint be dismissed by the
court. Subsequently, on 5 October 2021 the Company was notified that the plaintis had responded with their
own pleading which objected against the complaint being dismissed, to which the Company responded on
17 November 2021, again asking for the complaint to be dismissed.
On 7 December 2021 the Company entered into settlement negotiations with the plaintis, as a result of which
on 16 December 2021 a Settlement Term Sheet was signed whereupon the Company agreed to pay a settle-
ment in the amount of 1 850 thousand USD in exchange for which the plaintis would relinquish any claims
against the Company. This settlement was subsequently endorsed by the Company’s insurer, i.e. Colonnade
Insurance S.A. (Polish division).
On 27 January 2022 the Company concluded a formal Stipulation Agreement which confirmed the provisions
of the Settlement Term Sheet. Similarly to the Settlement Term Sheet, the Stipulation Agreement expressly
rules out any admission of wrongdoing on the part of the Company or other defendants named in the case.
On 4 January 2023 the Company was notified that the District Court for the Central District of California had
issued an order concerning preliminary approval of the class action settlement. The order approves the con-
ditions of the settlement, including full relinquishing of any claims against the Company and members of its
Management Board on the part of the plaintis, and the remittance of a settlement in the amount of 1 850
thousand USD to the plainti class by the Company and its insurer, Colonnade Insurance S.A. (Polish division)
LITIGATION INVOLVING THE COMPANT’S SUBSIDIARIES
Case brought by GOG sp. z o.o. before the District Administrative Court in Kraków
As disclosed in the Management Board report on CD PROJEKT Group activities in the period between 1 January
and 30 June 2022 in the section titled Events following the balance sheet date, on 19 August 2022 the Head
of the Małopolska Customs and Tax Oce in Kraków issued a decision with regard to corporate tax liabilities
incurred by GOG sp. z o.o., a subsidiary of the Company, in 2016. The Management Board of GOG sp. z o.o.
discharged the liability arising under the aforementioned decision, which, as of the payment date, amounted to
2 638 thousand PLN. Nevertheless, given its disagreement with the assessment presented by the tax authority,
it appealed the decision on 5 September 2022.
On 22 May 2023 the Head of the Małopolska Customs and Tax Oce in Kraków, who also performs the func-
tion of the appeal body in this case, issued a decision upholding the contested decision. This decision was
delivered to GOG sp z o.o. on 5 June 2023.
On 4 July 2023, given its continuing disagreement with the position expressed by the tax authority, the Man-
agement Board of GOG sp z o.o. filed a complaint against the aforementioned decision in the District Admin-
istrative Court in Kraków.
Management Board report on the activities of the CD PROJEKT Group and CD PROJEKT S.A.
between 1 January and 30 June 2023 (all figures quoted in PLN thousands unless indicated otherwise)
68 CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
MANAGEMENT BOARD STATEMENT
Pursuant to the Finance Minister’s ordnance of 29 March 2018 concerning current and periodic information to
be published by issuers of securities, and conditions for regarding as equivalent the information required by
the laws of a non-member state the Management Board hereby declares that, to the best of its knowledge, this
semiannual report on activities of the CD PROJEKT Group presents an accurate description of the development,
achievements and condition of the CD PROJEKT Group, including basic threats and risks applicable thereto.
Adam Kiciński
President
of the Board
Piotr Nielubowicz
Vice President
of the Board
Adam Badowski
Board Member
Michał Nowakowski
Board Member
Piotr Karwowski
Board Member
Paweł Zawodny
Board Member
Jeremiah Cohn
Board Member
CD PROJEKT GROUP BUSINESS ACTIVITY FINANCIAL RESULTS CORPORATE GOVERNANCE
CONTACT FOR INVESTORS: IR@CDPROJEKT.COM
WWW.CDPROJEKT.COM
