CD PROJEKT

In the framework of its strategy adopted in 2022 (see the Strategy Update), in the coming years the Studio intends to focus on:

1. Creating revolutionary role-playing games, by developing and publishing the following releases: ■ A new Witcher trilogy, the first installment of which is The Witcher 4 (previously codenamed Polaris); ■ Project Orion – the second game set in the Cyberpunk universe; ■ Project Sirius – a game with multiplayer features set in The Witcher universe; ■ The Witcher Remake – a retelling of the first part of The Witcher, developed with the use of modern technologies, in collaboration with Fool's Theory.

In addition, CD PROJEKT RED is carrying out conceptual work on the third proprietary IP codenamed Hadar.

1. Implementing the franchise flywheel concept, which involves developing an ecosystem of mutually supporting products, rooted in the potential of the Studio's franchises. The Group has announced its openness to collaboration with various external partners in order to create new ways to interact with its franchises. In the framework of the Cyberpunk universe, the Company is involved, among others, in animation and live action projects.

2. Further enrichment of our franchise ecosystem with games offering multiplayer features. In addition to flagship projects listed in the Strategy Update, the Studio also engages in work on other unannounced projects which augment the franchise flywheel concept. These include game projects, along with various initiatives which match the broad definition of digital entertainment and will be publicly revealed once the Company has verified its commercial potential or launched the corresponding information campaigns.

Achieving the Group's ambitious business goals depends, among others, on its commitment to increasing team engagement by shaping a robust, healthy organizational culture based on mutual respect and observance of legal and ethical standards while promoting continuous talent development. Our initiatives, rooted in the so-called five ambitions, support our plan to ensure sustainability at the CD PROJEKT Group and contribute to long-term increases in its value.

Key products and business model

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 October 2007.

The Studio's key product portfolio currently includes the following videogames: ■ The Witcher; ■ The Witcher 2: Assassins of Kings; ■ The Witcher 3: Wild Hunt with two expansion packs – Hearts of Stone and Blood and Wine; ■ Cyberpunk 2077 with its expansion pack – Phantom Liberty.

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 to the Company's business partners for retail resale; ■ sales of batches of activation codes which permit the game 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 distribution 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).

Key suppliers and clients in the value chain

Development of large-scale RPGs is a process which involves collaboration with dozens of companies – this includes typical B2B relationships as well as contractual arrangements with representatives of the creative industry and artists from around the world. Thus, our business partners include actors, musicians, graphic artists, writers and translators, as well as – among others – videogame distributors, manufacturers of gaming consoles and computer hardware, developers of software, technologies and game engines, external studios (e.g. audio and motion capture) or providers of streaming services.

In 2024 CD PROJEKT RED sales to two clients – Valve Corporation and Sony Interactive Entertainment – exceeded 10% of the Group's consolidated sales revenues and totaled 395 746 thousand PLN and 181 562 thousand PLN respectively (40.2% and 18.4% of the Group's sales revenues respectively). These clients are not affiliated with CD PROJEKT S.A. or any of its subsidiaries. No other client accounted for more than 10% of consolidated sales revenues of the CD PROJEKT Group.

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 segment's total revenues in 2024.