CD Projekt Red investors make good on Cyberpunk 2077 class-action lawsuit threat

    
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Someone thinks that's neat, probably.

No matter how well Cyberpunk 2077 appears to be working for you because you’re playing on a newly-launched console or a beefy PC, the fact remains that the game has not done well on other released hardware, which as was reported last week had caused some investors of developer/publisher CD Projekt Red to consider class-action litigation. That consideration has now transformed into a full-on legal filing, with the suit officially being filed this past Thursday. Merry Christmas, indeed.

The filing claims that CDPR made “materially false and misleading statements” regarding Cyberpunk 2077’s performance on PS4 and Xbox One, pointing to a number of conference call and financial report statements touting the game would be fully playable on the consoles as evidence. The suit further states that the game was instead “virtually unplayable” to the point that Sony pulled the game from its digital shelves, which resulted in “significant losses and damages” to the affected investors as a result of an inflated market share price which dropped shortly after the game’s release. The suit seeks an unspecified amount for these damages.

This suit could spell the beginning of a legal shellacking for CDPR: Investors in Poland are considering their own class-action suit, while another law firm is investigating “potential securities claims.”

source: Polygon. Cheers, Peter!
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traja

This is an example of why investor calls are a such good source of information. Laws unfortunately protect investors far better than customers when it comes to deception.

What I find interesting is that I can’t recall a single case of this happening before. I’m sure that it has but you would think that it would be more common that investors feel deceived in this industry.

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rk70534

Seems like a malicious law-suit by gold-digging investors…

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Rndomuser

I see some people blaming investors in rushing the game. I don’t see any actual examples of investors forcing CDPR to release this game in such unfinished state. It’s not in the interest of any investor to rush the release of the game in such state, provided that they were aware of issues with the game by developer instead of being lied to. Until some of you will have such evidence of investors rushing CDPR to release the game in a virtually unplayable (to most console users) state with investors knowing about the game being virtually unplayable (for most console users at the time of the release) before the game’s official release – please don’t make false and irrational assumptions about who is to blame.

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Peregrine Falcon

Have we learned to NEVER PRE-ORDER ANYTHING yet?

:D

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dreamer

CDPR walked into this mess when they came out and admitted, in one of their yellow tweets, that they knew the game wasn’t ready but released it anyway.

I have no sympathy for management, who consistently created unrealistic deadlines and bungled their projects (according to anonymous developers). Nor do I have sympathy for investors, who should know that investment requires a bit of patience. Though, in the case of the latter, CPDR has consistently stated that there was no internal or external pressure to release early. Make of that what you will.

In addition to the issues with it not running on last-gen consoles, the game is plagued with quest-ending and showstopping bugs, glitches, and incomplete features. Not to mention there is a laundry list of features and gameplay touted in the 48-minute gameplay demo and subsequent Night City Wire specials that did not make it into the live release–including things which have become standard (and therefore with some expectation) in open-world games like CP2077.

The intentionally misled for financial gain, and that is a crime. But no matter the outcome of the suit(s), the damage to CDPR’s reputation is real.

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Raikira

You do realize that an investor can be anyone who owns shares in a company? Most people who work and have some money to save invest those money into shares or funds (and funds can very well include shares from a company like CD Project). Those people, be it your neighbor “Bob” who manages his own portfolio or a broker who handles a defined “product” fund for this banks customers, they all read up on the company they are investing their money into and read up on stock (as well as interviews, game demos etc) and from that they base an assumption that its a good stock to invest in.

If the company, in this case CD Project, lies about the product (i.e. that it has features X,Y,Z when it in fact doesn’t have those features) they can be held accountable to anyone who owns shares, since its fraudulent behavior, if done on purpose and to inflate the value of the product/company.)

In this case, a law firm has seen that there is ground for a class action lawsuit, and reached out to anyone who owns shares in said company and want compensation.

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Tee Parsley

It’s foolish to expect these sprawling games to be stable on release. They take six months to a year to get proper. Folks who don’t like that should just wait. It’ll be cheaper too.

Of course, I’m a bit prejudiced on this specific topic; when I hear the words investors or venture capital, I spit.

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Bruno Brito

Honestly, there’s no good sides here. The investors are greedy morons with too much money on their pockets, and the management of CDPR and game companies in general are too easily corruptible by the glittering of dirty gold.

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Dug From The Earth

Its also naive for one to think that is the case. I work as a software developer for a major industry. We dont make games, but we do make software for a major industry. Software that is all encompassing, touching and managing a huge multitude of systems, processes, agencies, customers, and platforms. If companies like mine had the mindset of “its foolish to expect it to be stable on release” we (and many other companies) would be out of business.

Software CAN be stable on release. Sure, bugs always exist, but stable is NOT an unrealistic goal. Its only unrealistic when you release BEFORE ITS DONE.

If a game isnt expected to be stable for 6-12 months after release, then the game SHOULD NOT HAVE RELEASED for 6-12 months from when it did.

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Raikira

Same here, and I for one wouldn’t dream about stating that features X,Z and Y would be included in a release and then not delivering said features.

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Raikira

So you just keep your savings in the bank? You don’t invest them in anything? No shares or retirement funds or anything?

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Nathan Aldana

dude, if you think most of us on this website can even pretend we have the money to own stock or have bank savings you vastly overestimate our income.

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Bruno Brito

Vastly.

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Bryan Correll

You don’t have to have a video game journalist’s vast level of wealth to open up an e-trade account.

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Bruno Brito

No. But having game shares that are significant enough that you would incur the monetary penalty necessary for a lawsuit?

I wouldn’t lawyer up for a 5dollar share if i had 2 of them. If i had 5 thousand tho…

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Bryan Correll

If you own shares in a mutual fund (which is where most small investors should have most of their money) and that fund owns a significant position in company x you can benefit if the fund successfully sues company x. It won’t amount to much by the time it trickles down to you, but it’ll be there.

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Bruno Brito

Yeah but this is us arguing semantics at this point. Yeah, i’m an “investor”. I’m not someone with the power to lawyer up against one of the biggest games of 2020.

There ARE ways that poor people can make investiment money profitable, even here in Brazil, but stock shares are NOT for people with pennies. These specific investors are trying to recoup losses by investing time and money with litigation. We don’t have that luxury.

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Nathan Aldana

Sure but I’m a wage slave with a house payment. Stocks of any time strike me as a stupid investment because I sure as hell cant afford enough to ever make any real money off them.

MilitiaMasterV
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MilitiaMasterV

Most people don’t have any ‘savings’, much less ability to ‘invest’ or get shares or participate in funds. A lot of people are ‘just getting by’ paycheck to paycheck. Some of them are even riding the credit debt roller-coaster, or mortgaged to their eyeballs. There seems to be a huge disconnect where people who ‘are doing well’ don’t seem to understand/remotely even gather how other people in poverty are living…

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Dug From The Earth

Its bad that this is hitting the company as a whole when its the fault of such a small group of individuals. (IE: the management)

Its bad that this is such a hypocritical cluster %$#!, and that greed and $$$ ruined something that could have been amazing.

The irony (and hypocrisy) of this all is that the people suing are the same people who demanded and “bribed” CDPR to release sooner than later.

For examples:

Investors, “Its been 6 years and we havent seen a return on our investment!!
CDPR Management, “Its still not ready yet”
Investors, “If you release it by Dec 10th, you (management) will each get a hefty $$$ bonus!”
CDPR Management, “Oh wow, we will make sure its ready to go by Dec 10th!!”

Investors thinking that money can solve anything, and CDPR Management losing any standards, morals, and decency because enough money was dangled in front of them. Its just slimy any way you look at it.

And then, the very people who insisted it release (too) early, are now suing to get even MORE money.

This should ABSOLUTELY hit CDPR management in the financial gut, but if these lawsuits go through, the Investors walk away the winners here, when they were ultimately the little devil sitting on the shoulder.

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bobfish

That isn’t how it will be working with CDPR. The majority of the company is still owned by the founders, the shareholders who purchased shares at the IPO when they went public in 2009, don’t have enough shares to force the company to do anything.

This is entirely on the management and founders.

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Dug From The Earth

Your statement doesnt change anything with what I said.

The management/founders/board of directors for CDPR were influenced by the money the investors dangled in front of them.

Its still the managements fault, despite the investors being the little devil on their shoulder tempting them. The management made bad decisions because of money greed.

One should even ask, “With all the money they have made on the witcher series over the years, did they REALLY need additional investors to make CP2077? ”

While investors dont control CDPR, they do have a big influence over the management… Why? Because of MONEY. That doesnt excuse the bad decisions of the management, but it IS one more element that contributed the this dumpster fire.

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bobfish

They didn’t need investors. They didn’t go public to get money into the company, they went public so the founders could sell part of the company and personally cash in themselves.

This isn’t about investors, its purely about the greed of the management team. Because there will be a dividend now they are public, so a good launch in 2020, would result in a big payout to the founders (and other shareholders) in 2021, if their share price had held.

As you say, this is about money, but the shareholders who aren’t founders are not influencing any of this, because they are a really small minority, insignificant compared to the founders themselves.

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Dug From The Earth

What do you mean its not about investors?

You cannot factor them out of the chain here. It doesnt move the responsibility off the Managements shoulders, but they were a factoring element.

Also, investors do not have be shareholders. That may be the miscommunication here. Companies get investors for projects all the time, and these investors are often not people who own any portion of the companies shares.

Simply put: Had the investors not existed for this project, then it would not have been released on Dec 10th.

Why?

The investors pushed to have it released. The Management should have said “No”.

Why didnt the management say no to the investors?

As stated in my original post, it had to do with $$$

CDPR had already made TONS of money off preorder. Investors didnt see ANY of that money yet because the project was not “complete”. Often, investors will threaten to back out, or the opposite, will offer monetary incentives to rush things.

This is the classic case of that person standing on the sidelines (the investors) saying, “Come, on, do it… jump! jump! JUMP!” and then 5 minutes later saying, “You moron, why did you jump? Now you are hurt, and soon to be stuck in the hospital for the next few days!”

No one forced the person to jump, their actions are their own (management), but that doesnt mean there were elements goading them towards these bad decisions… and MOST of these elements were based around $$$.

The shareholders, the 66% that arent the founders, have a right to be pissed at management. Their “investment” is in the company, not the project itself. (although some may have independently also invested in the project as well)

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Ryuen

Anyone wishing a company bankrupcy and their employees unemployment over a failed video game launch needs to rethink their priorities. Your game not working is not a reason to wish for people to lose their jobs.

Just get your refund, move on and don’t support said company again if you are that disappointed.

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Sarah Cushaway

People can find other jobs in other studios. There is no excuse or reason for a company that blatantly lies and promotes false advertising to stay in business. None.

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Ryuen

You have your viewpoint, I have mine.
I’ll keep it at that.

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Arktouros

The level of vitriol out of some people over video games and entertainment products is wild sometimes.

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Bruno Brito

My bad. I didn’t knew i had the power to bankrupt an entire company.

Blizzard best beware.

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Lethality

Hypocritical as the investors were the ones pushing for premature release.

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Sarah Cushaway

Still the company’s decision to release it. It’s on them, no one else.

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Dug From The Earth

Not the company…. the management

Id be willing to be a good 95% of “the company” would have decided NOT to release it.

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Bruno Brito

Most of the rank and file are criticizing management.

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Dug From The Earth

IM mostly referring to people pointing to “the company” or wishing that all of CDPR get shut down. (such as the post from orson0402 below this)

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Bruno Brito

I’m aware. But it’s as it always is: We all hope the rank and file get good jobs and cheer for them, but as long as it works the way it does, the upper management keeps shoving their behinds with unearned moolah.

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Raikira

Out of curiosity, is there any truth to this? Which investor where pushing for premature release? Any source or links that back this up?