Joint Chairperson of the Supervisory Board (co-founder), CD PROJEKT S.A.
Adam Kiciński, Prezes Zarządu CD Projekt S.A., Lunch ze spółką
W tym odcinku gościem Tomka Jaroszka był Prezes Zarządu CD PROJEKT S.A.. Adam Kiciński odpowie na pytania dotyczące Spółki, dalszych planów rozwoju i strategii. Tematem rozmów były nie tylko inwestycje, ale także gry, a przede wszystkim Wiedźmin 3.
http://www.inwestortv.pl/film/adam-ki...
Transcript (23 segments)
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Interviewer0:11
If we look on foreign forums, it turns out that Poles are known for having John Paul II, Lech Wałęsa, and The Witcher – and not the book one. And with me is one of the fathers of this success, Adam Kiciński from CD Projekt. Good morning.
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Adam Kiciński0:25
Good morning. A quick correction: this is the book Witcher. Although the books are indeed a bit less popular in the West. But the Witcher is the same. There is one Witcher, both in the books and in the game.
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Interviewer0:36
There is one Witcher, but we must admit that the success of the computer game is truly impressive. I wonder, can you approach the gaming industry purely from a business perspective, or is someone in this industry also, at least to some extent, a gamer?
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Adam Kiciński0:49
Not everyone. I, for example, I hardly play – I regret not playing enough. But in the industry, like any industry, when you do serious business, you also have to take care of the money. There are people like me and some of my colleagues who play less and focus more on ensuring the business develops.
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Interviewer1:07
I wanted to ask, have you already played this phenomenon, GTA V, this business phenomenon actually, because neither any James Bond movie nor any book or film premiere has been such a success as, surprisingly, this computer game.
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Adam Kiciński1:20
That's true. I haven't played it, but I've seen a lot of trailers. The game is phenomenal, but I haven't played it. However, I know the opinions, and based on what I've read, I can only lean towards the mass opinion that it is a phenomenal product.
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Interviewer1:38
But you've been involved in the gaming industry for years, and in Poland, it's still an industry in its early or mid stage of development. It's not yet like GTA V and the US when we talk about the entire industry. How do you assess this? Has a lot changed in recent years in Poland?
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Adam Kiciński1:55
You have to distinguish two things: I've been involved since 1994, almost from the beginning of CD Projekt. The gaming industry in Poland in terms of development and sales are different. For sales, we are a fairly developed market, though Poland's share in the global game market is slightly smaller than its share in global GDP. For development, we started late; the first large commercial releases came in this century. We are 10-20 years behind the West but catching up. For example, our Witcher 2, announced this year, seems to compete effectively with the biggest global hits.
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Interviewer3:19
I've also seen covers of foreign magazines saying you must play this. But going back to game production, there's a theory that we are low-cost and cost-wise we are the 'China of Europe.' I wonder if in the computer game industry, this translates into results because it's cheaper to produce a game here in Poland, we have great people, but it's still cheap.
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Adam Kiciński3:45
There is no such phenomenon in the gaming industry. We are certainly not the China of Europe. Labor costs are lower in Poland, but roughly proportional to the cost of living, about 70% of Western averages. We employ many foreigners at the same salaries. We have developed efficient production methods over 10 years, making games cheaper than in the West, but budgets are still significant.
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Interviewer5:15
Yes, but in one interview you said the company's plans, aside from The Witcher, are to be in the top three RPG game producers in the world by 2015.
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Adam Kiciński5:26
What is that top three? Bethseda is on top with Skyrim, which sold 18 million copies in less than two years. BioWare is up there, but now part of EA. Blizzard makes different games. We focus on a few strong titles. Serious money comes only from the best titles. We concentrate our resources on a few projects to maximize success. We now have enough resources for two major titles simultaneously, Cyberpunk 2077 and The Witcher 3. We also support them with smaller projects and products like comics with Dark Horse Comics. These strengthen the brand, but the main business is video games.
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Interviewer10:26
And now about the release of The Witcher 3, can you say how much it will cost? Hard to predict sales. Probably those who loved the second part will buy the third, but hard to predict specific numbers. But regarding costs, can we know how much The Witcher 3 costs?
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Adam Kiciński10:46
We already said it. Direct production costs are less than 50 million złoty. But this is for analysts. This figure cannot be compared with budgets like 265 million for GTA 3, because we only include costs that accumulate on the balance sheet. We shot ourselves in the foot by mentioning it. There are two worlds: accounting and marketing. For analysts, that number remains unchanged.
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Interviewer12:32
Exactly. Looking at the stock price, CD Projekt has grown fantastically. My question is the old rule: buy the rumor, sell the news. Are we all buying the rumor that The Witcher 3 will be our Polish GTA 5?
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Adam Kiciński13:08
If it were GTA 5, the stock price would be scandalously low, because GTA 5 had a billion in revenue in three days. We are not aiming for that level. We would be satisfied with a significantly lower level. CD Projekt is not just The Witcher; we have GOG, which has been growing dynamically with 50-100% year-on-year growth. We also have cdp.pl expanding into movies and digital distribution. In the game production segment, we are profitable. The Witcher 1 and 2 still generate income. We are cash positive. Real profits will come with The Witcher 3. We have high expectations.
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Interviewer16:00
So about upcoming releases: there is another method of earning in games – product placement. In The Witcher it's difficult, but with new titles, does this come into play?
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Adam Kiciński16:21
Product placement is good if well done and natural. The Witcher is very poorly suited for it. We don't want to advertise alcohol. For Cyberpunk, set in a future world, we would like to exploit that area, but it's too early to say anything specific.
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Interviewer17:00
One more question from a fan: they lament that Polish dubbing icon Piotr Frączewski is not in The Witcher. Can we reassure? I can't reveal such things, and I don't have that knowledge.
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Adam Kiciński17:30
Piotr Frączewski has his fans, but we make choices. The Polish localization of The Witcher 2 was highly appreciated. We will put effort into the third part. Sapkowski's books being originally Polish allows extra linguistic twists. We hope to satisfy players with the Polish version of The Witcher 3.
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Interviewer18:32
One more question about the rising stock price. There's a theory that everyone wants the company because a big foreign player might buy it. Would you be tempted by a huge offer?
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Adam Kiciński19:04
As a shareholder and management, I can say this is not a topic now. We have money and a plan for years ahead. The company has amazing prospects. Selling would be pointless. We benefit from independence and want to be a global player, not be bought by one.
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Interviewer20:13
We as journalists, shareholders, and gamers look forward to The Witcher 3 and Cyberpunk. Thank you for visiting Investor TV. Adam Kiciński from CD Projekt. We look forward to successes for both the stock exchange and gamers, because as you have said, the player is more important than the investor.