CD Projekt is 46% above the lows despite a troubled year for gaming CD Projekt is 46% above the lows despite a troubled year for gaming CD Projekt is 46% above the lows despite a troubled year for gaming

CD Projekt is 46% above the lows despite a troubled year for gaming

Equities 7 minutes to read
Peter Garnry

Head of Equity Strategy

Summary:  The gaming industry has for years been a strong and high growth industry driven by the adoption of mobile gaming significantly increasing engagement. CD Projekt is one of the older gaming developers in Europe and has predominantly stayed with games on desktop and consoles, and been through tough 18 months with revenue declining rapidly. The company has recently stabilised its business and presented yesterday its new long-term vision for the company which investors seem to be buying into. We take a look at the company and also the overall gaming industry.

CD Projekt sets sail for a new long-term strategy

CD Projekt is one of the leading European gaming developers and has risen 46% since early September despite first-half year result disappointed against estimates but delivered net income growth of 8% y/y. The gaming developer said it would deliver a long-term strategy vision for the company and this new vision came yesterday. It includes working on two AAA gaming projects which are Witcher and a new title. In addition, the deputy CEO is stepping down and joining the supervisory board instead and a new share buyback programme of PLN 100mn has been initiated. The company also says that it will add multiplayer elements to its video gaming pipeline, which has a lot of potential due to higher engagement in multiplayer, and the gaming developer has said that it will not sell new shares to finance the new gaming projects.

The market has been betting on good news from CD Projekt and with the stock price up 5% today extending on yesterday’s move it seems investors are buying into the long-term strategy. The past 18 months have been tough for the company as revenue has declined from PLN 2.1bn in 2020 to just PLN 796mn in the past 12 months. The equity valuation, measured on 12-month forward EV/EBITDA, is still 150% above the MSCI World Index suggesting high expectations for growth in the future.

CD Projekt share price | Source: Saxo Group
Gaming theme basket vs MSCI World | Source: Bloomberg

The gaming industry was one of the biggest winners during the pandemic as people sought online entertainment during their lockdowns which was reflected in the 2020 performance of our gaming theme basket (see 5-year chart below). But since the reopening engagement has fallen and gaming developers such as Sony and Microsoft have experienced declining revenue. The median 12-month revenue growth in our gaming basket has fallen to 5.4% and margins have down but still are strong at around 22.2% for the industry. Analysts have maintained their high price targets with the average stock being 41% below the price targets.

As PwC’s Global Entertainment & Media Outlook suggests gaming revenue will continue to grow healthy over the next 4-5 years. We remain bullish on the industry longer term as the gaming industry has a more compelling business model than video streaming which is the biggest competitor on the consumer’s time for leisure. Short-term risks for the industry are the high electricity making gaming more expensive, cost-of-living crisis lower available income for gaming, and higher interest rates compressing valuations even more.

Gaming basket
Gaming revenue outlook | Source: weforum

5-year price chart on Saxo’s gaming theme basket and MSCI World

Gaming basket vs MSCI World | Source: Bloomberg

Saxo Capital Markets (Australia) Limited prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments.Saxo Capital Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Please read our disclaimers:
- Full Disclaimer (
- Analysis Disclaimer (
- Notification on Non-Independent Investment Research (

Saxo Capital Markets (Australia) Limited
Suite 1, Level 14, 9 Castlereagh St
Sydney NSW 2000

Contact Saxo

Select region


The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

Saxo Capital Markets (Australia) Limited ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms, Financial Services Guide, Product Disclosure Statement and Target Market Determination to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation. The Target Market Determination should assist you in determining whether any of the products or services we offer are likely to be consistent with your objectives, financial situation and needs.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.

Please click here to view our full disclaimer.