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Home / Technology / CD Projekt Red investors are suing the company over Cyberpunk 2077 debacle

CD Projekt Red investors are suing the company over Cyberpunk 2077 debacle



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Enlarge / People complain about situations like this in Cyberpunk 2077.

On the day of release, Cyberpunk 2077 immediately turned from one of the holiday̵

7;s most anticipated new games to one of the biggest outbursts of the year, as both comic and game-breaking proved to be so productive on consoles that Sony even removed the title completely from its digital store at the moment. Developer and publisher CD Projekt Red has had its hands full in recent weeks juggling wide-ranging mockery and unhappy customers, and now there is a new woe on their pile: shareholder suits.

Two different law firms announced last week that they were suing CD Projekt, claiming that the company violated the Securities Act by misleading investors (and everyone else) about the condition of Cyberpunk 2077 and whether it can be played on current-generation consoles, PlayStation 4 and XBox One.

Statements CD Projekt Red made about Cyberpunk throughout 2020 was “substantially false and misleading,” the complaint claims (PDF), because the company did not mention that the game “could hardly be played on the current generation of Xbox or Playstation systems due to a huge number of errors.”

These bugs were not widely known before the game’s release, because the company did not make console copies of the game available for review. Each outlet that had a preview of Cyberpunk (including Ars) played it on PC. CD Projekt apologized after the release for not making the console version available “and consequently did not allow you to make a more informed decision about your purchase.”

The suit cites the many release delays the game faced, first from April 2020 to September 2020, then from September to November, and finally from November to December. Each time the studio announced a delay, executives publicly promised that the game was on the right track, but only needed a little more polishing and started a period of sustained crunch to make it happen.

However, in the wake of the game’s release, CDPR’s CEO Adam Kiciński admitted that the company focused too hard on the three – time delayed deadline instead of the actual problems with the game.

“We underestimated the scale and complexity of the problems, ignoring the signals of the need for extra time to refine the game on the latest generation consoles,” Kiciński said in a conference call.

“We updated the game on the latest generation consoles until the last minute, and we thought we would make it in time,” said CEO Marcin Iwiński in the same conversation. “Unfortunately, this resulted in giving it to reviewers just a day before the release, which was definitely too late, and the media did not get the chance to review it properly. That was not the intention. We only fixed the game until the very last minute.”

CD Projekt Red said in an archive over the weekend that it would defend itself “strongly” against the shareholders’ claims.

Meet expectations

Given the ongoing debacle of Cyberpunk 2077 launch, an investor suit seemed anything but inevitable. This type of legal action is incredibly common when a company takes a big PR hit.

Under US law, listed companies have a duty to join their shareholders. In principle, officers in a company have a legal obligation to act in the best interests of the company and its investors. Shareholders and group leaders tend to interpret this as a legal obligation to maximize the company’s profits, even if that is not exactly what the law says.

The December peak in CDPR's stock price came on Dec. 4. Outlets (<a href=including Ars) started publishing reviews on December 7 (first drop), the game was released on December 10 (in the middle of the big downhill), and Sony listed played December 17 (the tiny little tip just before the second fall).
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Enlarge / The December peak in CDPR’s share price came on 4 December. Outlets (including Ars) started publishing reviews on December 7 (first fall), the game was released on December 10 (in the middle of the big downhill), and Sony canceled the game on December 17 (the tiny little tip just before the second fall) .

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The argument in this type of shareholder case basically says: The company did something it should not have – lied about something, downplayed a risk, made a colossal mistake in the judgment, and so on – and as a result damaged the company’s public image and in turn damaged investors .

For example, Pinterest shareholders filed a lawsuit against that company earlier this month, claiming that the board failed in its duty to comply, as allegations of violent racial and gender-based discrimination in the company damaged its image with its largely female user base. Google settled a similar shareholder case in September, over the handling of harassment claims in the company. And back in April, Zoom investors sued the sensational video conference overnight, arguing that the company should have known the product did not meet specifications before the pandemic hit.


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