CEOInterviews.AI#WallStreet23: Spotkanie z Adamem Kicińskim, prezesem CD Projektu

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Interviewer0:00

Good afternoon. There is no need to introduce Adam Kiciński, who runs one of the hottest companies on the Warsaw Stock Exchange. He is more a representative than a manager. Our meeting will last about an hour, then 15 minutes for your questions. I am a science journalist, so I'll get straight to the point: when is the premiere of Cyberpunk 2077?

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Adam Kiciński1:03

Every day we are closer, but we haven't announced a date yet. At E3 we will only show another gameplay fragment. We said it's the most important fair in our history. What will be there will be known around the fair days. But I'd like to return to the beginning: some talk about pluralism, the 'we' language. It's a kind of corporate DNA. CD Projekt was founded by two people: my brother and Marcin Iwiński. From the beginning, they each had 50%, so there was no single decision-maker. The management group grew and always managed collectively. It's sometimes difficult but very effective. Marcin and I have the position of co-CEO abroad. In Poland, the commercial code requires a president, so I am the president. Usually in successful companies, a natural leader emerges, but here it didn't happen. Why? There can be conflicts in collective management, but perhaps that's one reason for our success. We rarely argue, we have different opinions but we have worked out methods. For very important decisions, we discuss until everyone is convinced. Smaller decisions are made in groups. We have managed to arrange cooperation smoothly. We help each other rather than push. It's unusual; I don't know another collective like ours. It started with the founders, then Piotr Nielubowicz joined. I was there from the beginning as an employee. Now we have several people in the board. This collective works, we don't argue. If someone blocks a decision, we call it 'shooting Rejtan' – a veto. But we are six people, we work closely, understand our goals, share values, and are friends. This supports the company because if someone has a bad time, others take over. Several brains are better than one.

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Interviewer6:01

Let's go back to the beginnings of CD Projekt. The 'CD' in the name comes from compact discs and distribution center. Before 1994, there was no copyright law, so everything could be copied and sold legally. In 1994, the copyright law came into effect, and the founders decided not to break the law. That was a big problem because many sellers continued copying. Competing with them while paying for licenses was very difficult. At that time, CDs started appearing, which could hold 700 MB, allowing for much larger games that couldn't fit on floppy disks. Piracy wasn't yet widespread, so the founders set up CD Projekt to sell only legal games on floppy disks to avoid competing with illegal copies. From small quantities, we grew. I joined in the summer of '94 to help my brother. We ordered 5-10 copies of each game from the West, had 33-25 titles in our offer. That was show business. Now you have record capitalization and sales at a different level. The distance is huge. The business model is different: then we were intermediaries, now we are creators. The lesson from distribution times: we learned which games sell and which don't. We developed intuition about sales and marketing. When we started making games, that was a big difference from other developers. We had sales experience. You said the business model is different, we look ahead. We try to be innovative and find unoccupied niches. That's how GOG was created, initially under the Jagged Alliance brand – there was no service for older games on modern systems. We have to look ahead because our production process takes years. When we make something today, we have to think at least 4-5 years ahead. We make big games that have sequels. I'd like to end this historical thread. Imagine a fireplace in the Karkonosze mountains, evening atmosphere, maybe something stronger than water. Tell an anecdote from those times that seems absurd from a business perspective or funny given where you are now. Honestly, I don't have any, I'm not a master of anecdotes. There were many funny and scary elements, but no brilliant anecdotes right now. Well, since we are at an investor conference, let's talk about your time on the stock market. It's been 10 years since CD Projekt's debut on the Warsaw Stock Exchange. A week ago, you had the highest share price and capitalization over 22 billion zlotys. How do you look at these records?

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Adam Kiciński13:08

I've gotten used to it. It's a fact that over the last 9 years, since our formal debut in May 2010, the share price has risen from around 2.20 zlotys to much higher. We try not to think about it too much, we focus on our business. The idea for the stock exchange came a long time ago. We thought it would give us capital opportunities and allow for good incentive programs. We believe in sharing financial success and capital with employees because they create the company. When the team feels they participate in the success, we have a better chance. The timing of our debut was unfortunate – just before the crisis. We had a growing business, mainly distribution, and suddenly sales dropped. We had to cut costs, it was a difficult time. We found an investor, Mr. Jakub, who provided capital. It was a positive experience. We learned about capital markets, the difference between private equity and venture capital. We didn't go with VC because they want control, and we want independence. We have full independence now. That difficult moment taught us to be more cautious about costs, to have crisis plans, and to ensure we have multiple plans. We learned that we need to have control over the most important things. Now our projects are independent of external factors. If a crisis happens, we can react flexibly. We learned to act quickly, like reducing staff immediately to always have money for salaries. It depends on the crisis. A global crisis shouldn't affect us much; an internal crisis we have to overcome. We are not super diversified, but we do several things. Currently, the main topic is Cyberpunk, but we have other activities.

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Interviewer20:22

What did that difficult moment in your history teach you? You met with a bank, what vision did you have? What did the situation teach you?

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Adam Kiciński20:39

We are more cautious in some areas, very sensitive about costs. We always have plans for a very bad scenario in a drawer. Problems can ruin a business, we felt that. Independence and cash reserves are something we want to maintain. That situation taught us to have more than one plan, especially when the success of the best plan doesn't depend only on us. We entered the stock market path before the crisis without another plan, and when the IPO became impossible, we were in trouble. Now we think more about guarantees and ensure the most important things are 100% under our control. Our projects are very independent. If a crisis occurs, we can react flexibly. We learned to act quickly, like reducing staff immediately to always have money for salaries. It depends on the crisis. A global crisis shouldn't affect us much; an internal crisis we have to overcome. We are not super diversified, but we do several things. Currently, the main topic is Cyberpunk, but we have other activities.

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Interviewer24:05

Let's talk about the future from the perspective of your experiences. I understand you want to have control not only financially but also over what you do. So the model of collecting good ideas from small studios and incorporating them under your wing probably won't happen for CD Projekt. It has to be your own things, made by you with your know-how and corporate DNA, right?

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Adam Kiciński24:38

Yes, definitely. Of course, one can imagine a situation where CD Projekt invests in someone many years from now, but we have no such plans. That would be a different company. For our productions, we have to realize them ourselves. Acquisitions can happen, like last year with the Wrocław studio. We bought a small company there because they could help speed up creative processes. They have a similar culture and fit well. But that's more like hiring people than acquiring. The Wrocław studio works on the project in the same way.

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Interviewer25:55

You mentioned the second horizon of business plans. Games take several years to make. Do you think, like in the automotive industry where manufacturers accelerate new model releases to maintain brand interest, a similar thing will happen in the gaming industry? Will you need to make good games faster and more often to meet competition?

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Adam Kiciński26:25

Probably not. There are producers who release games from a series every year. But we do something different. For us, the most important thing is that the game is innovative and outstanding in certain areas. Our games sell for a very long time. The first Witcher, released 12 years ago, still sells. The second sells even more. So adding new games to our portfolio stabilizes our results because previous titles are in our catalog. We value quality over frequency. We would like to release more games, that's the plan, but we need to reach a stage where we can develop two big games in parallel. We have two teams now, so it's possible. In our strategy, we aim for two big AAA games. But it will take time. Additionally, we will want to deliver new content to players between releases, which will fill the time between premieres.

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Interviewer28:54

Are you currently struggling with the problem of a tight labor market, skyrocketing salary demands, and high employee turnover?

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Adam Kiciński29:07

We have always competed globally. The situation on the Polish labor market is secondary for us. We compete with studios in California, so we have to be very competitive. We hire people at the highest world level, and they could work anywhere. So the Polish market is secondary. Our challenge is to compete with big players. We have many foreign employees, about a quarter of the team. Communication is in English. We hire people from all over the world. Are we a global company? We are a Polish company because most employees are Polish, management is Polish, founders are Polish. But we operate globally. Our customers are global; only a few percent of sales are in Poland. Most sales are in North America and Western Europe. We invoice in dollars and euros, so we don't worry about currency much. We convert to zlotys quickly to avoid risk. We report in zlotys, most costs are in zlotys, so our operational currency is the zloty. Revenues are in foreign currencies, which we convert.

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Interviewer31:52

Let's stay with trends in the gaming market. As a global company, what do you think about the mobile trend? Will it continue to grow?

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Adam Kiciński32:08

Mobile is huge and growing, but phones have small screens. Some game types like Cyberpunk or The Witcher won't fit on a small screen without simplification. It doesn't make sense for us to make those games for mobile. We make big games for big screens. However, the mobile market is developing fantastically. We announced Gwent on iPhone this year. Our subsidiary Spokko also makes a game exclusively for mobile devices. So we want to be there, but our main productions are for big screens.

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Interviewer33:41

Looking at the next steps CD Projekt wants to take, you develop based on your own capital and resources. Do you plan to grow through acquisitions? I heard you are not dogmatic about it.

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Adam Kiciński34:00

We are not dogmatic about anything except the principles we follow in business. But regarding business decisions, we try to be rational. Acquisitions are unlikely because for it to make sense, the acquired company would have to become part of CD Projekt, meaning it must have a very similar culture. That worked with Wrocław because they had a similar culture and we knew each other. But we are open to growing abroad, like in Vancouver, through hiring employees or possibly opening new branches. But we are not planning any listings on other exchanges.

We have various topics regarding our foreign branches—small offices in the US, China, Japan, Berlin, ranging from a few people to two. These offices exist to promote our interests in key territories and stay in touch with players in their native language. For now, we need to strongly develop Kraków and Wrocław; Kraków is already nearly 90 people, Wrocław around 30, and we want those teams to grow. As for capital presence elsewhere, we ask ourselves why—investors worldwide can access us easily, so there's no need to move.

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Interviewer37:04

Let's start from zero. Looking at CD Projekt's success story, there was a lot of learning by doing, on-the-job training, and it worked. I suspect many managers don't know: do you draw inspiration from figures, life mottos, books, coaching sessions? You show that it's possible without that—or do you read books?

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Adam Kiciński37:54

I occasionally read management books, but they can be boring. The problem isn't knowing how to run a business well, but actually doing it—it's frustrating because you know how it should be but daily reality is different. I never had a coach. Our company was founded by two young guys right after high school who learned on the job. We're all different but have similar methods: we support each other, never give up, and consistently pursue our goals. That's more personality than methodology. We were lucky to meet and want to do this together. On an operational level, we have excellent specialists in every field, so we're well supported.

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Interviewer41:54

How long will you stay on top? We hear superlatives about you—how do you ignore that? Doesn't it impose a burden? The spotlight, global interest, pressure to keep delivering, the stress of building expectations—especially when you've built huge anticipation for your next game. You have to meet or exceed those expectations. How do you handle that?

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Adam Kiciński43:02

It is stressful, but we've lived like this from the start. When we went public, we worried about being a listed company; now we don't even think about it. Each new challenge is bigger than the last, and we've gotten used to it. We have no fundamental fear that something is impossible—we believe everything is possible, but we do stress along the way.

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Interviewer43:53

Do you also plan spontaneously? Do you have a very long-term goal that could be described as such?

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Adam Kiciński44:05

We plan goals, not spontaneously. The process is spontaneous but takes time—discussions can last too long. We typically define big goals, like what our next game should be, trying not to be limited by our current capabilities. We first say 'we want to be there' and then figure out how to realize it. That's stressful when you don't know how to deliver what you promised. For long-term goals, we want to keep growing at the same pace. We aim to make more games, just as good, and ensure our franchises—like Witcher and Cyberpunk—become eternal, like some American brands that have lasted across generations. That's our ambition.

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Interviewer46:46

Is most of your future thinking product-focused? Or are there other aspects, like expanding into China?

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Adam Kiciński46:58

We need to grow—our ambition is to have 10,000 people at CD Projekt, not as an end in itself, but because that many will be needed to achieve certain things. People are most important, but team size is a function of creative and business goals. As for competitors, they are inspiring in a way—we have to watch them, but we have our own fresh ideas. In our previous strategy, we wanted to be the most important, largest, most respected RPG developer. I think we're already there. Now we also aim to be in the top tier of all game developers, competing across categories. We'll expand into other game types, but always with our core focus on RPGs. Cyberpunk already goes beyond the genre, like Gwent is a card game. We'll keep expanding but never neglect RPGs.

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Interviewer50:27

You often say that gamers are very inspiring and the community around your titles gives you fuel to improve your products. How do you measure their appetite and satisfaction from a business perspective?

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Adam Kiciński50:59

It's relatively simple nowadays because of social media and direct feedback on forums. We get immediate responses from players through various channels. We don't use opinion polling institutions—we rely on direct feedback from gamers, not so much reviews. Reviews are different; they come out before the game and shape initial perception, but the players' direct reactions tell us if what we're doing is okay.

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Interviewer52:46

You mentioned that sharing financial success with employees motivates them and binds them emotionally to the company. You also shared with shareholders. Will CD Projekt continue that? And a final—

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Adam Kiciński53:15

We've shared dividends in a thoughtful way. The first dividend came two years after the release of The Witcher 3, even though 2015 was phenomenal. We waited until 2016, which was also good, then decided to share. The next dividend was based more on future visibility—we had contracts signed with distributors guaranteeing marketing contributions, which gave us confidence to share again. So it's always a one-time decision based on our assessment.

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Interviewer55:03

Now we'll open the floor to investors and attendees. Please use the microphone and introduce yourself.

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Audience Member55:22

Hello, my name is... I'm from Białystok. I have one question: if you had one bullet to aim at a competitor, who would it be and why?

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Adam Kiciński55:36

If we had one bullet... (laughter) I think no one. We have our own path.

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Audience Member55:53

Hello. I prepared a question. Suppose I'm the CEO of a company much higher on the global market, a big competitor. You have The Witcher, we have, say, Conan the Barbarian. I propose combining forces into one project—a game with both icons. What would you say?

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Adam Kiciński56:57

That's a very theoretical example, unlikely in real life. I think no—we have our own road and know what we want to do. Combining forces with someone else isn't our idea. If we can't reach the scale of big players now, we'll make a game that achieves it on its own.

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Audience Member57:32

Krzysztof Markowski. Regarding security: I'm not an IT expert, but your developers are connected to the internet and communicate globally. Is there a theoretical risk that, given your ambition to make the best game, powerful actors (e.g., from China or others) could steal it or inject a virus that kills the game? Also, did you finish computer science or other studies?

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Adam Kiciński57:51

I didn't finish my studies formally—I completed coursework but didn't defend my thesis because I started working at CD Projekt. As for security, I can't discuss that publicly. We are aware of the risks, but I don't want to provoke anything.

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Audience Member58:28

My question is about meditation, friendship, and education. I've spent over 5,000 zł on your products, and I plan to spend more. You mentioned applying a Blue Ocean Strategy. How do you deal with so many friends who support you? What role does meditation play?

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Adam Kiciński58:31

Meditation? I plan to start, but haven't yet. Science says it's healthy, but I don't have many true friends. I have a few close ones. As for the strategy, I think our perfectionism is key. Also, Michał went a different path—more spiritual—but he's no longer on the board.

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Audience Member1:01:27

Marta from Kraków. Will you ever publish games from other smaller developers?

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Adam Kiciński1:01:41

To some extent we already do through GOG, which sometimes acts as a publisher for small developers. But classic publishing—taking someone else's game under our wing with marketing and distribution—probably not, because we're very busy with our own games and have no plan for that.

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Audience Member1:02:19

Hello, Albert. Can we expect The Witcher on Nintendo Switch?

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Adam Kiciński1:02:29

Nintendo Switch is a console that has surprised the market and is doing very well. But I can't talk about unannounced things. If we decide to do something, we'll announce it.

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Audience Member1:03:05

Adam, my name is... You seem to be a specialist in impossible things. What personal qualities should a young person develop to succeed today? For example, a 5-year-old—what should they have to achieve impossible things? And is it possible to create games that have educational value for children?

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Adam Kiciński1:03:53

I'm not a specialist, but I have three children. The most important thing is family support, then school. Everyone has their own method. As for educational games, there are many good ones available—more education than game sometimes. You have to look, but they exist.

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Audience Member1:04:40

From Wrocław: What are your expectations for Cyberpunk compared to the success of The Witcher 3? Do you aim to surpass it, and how does the fact that it's not a direct continuation affect you?

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Adam Kiciński1:05:06

We aim much higher—we want it to be another big step in our development. That it's not a continuation is a challenge, but luckily in our industry there's a strong association between the creator and the product. Players know who made The Witcher 3, so they trust us. We announced Cyberpunk long before The Witcher 3's release, and it already had huge interest.

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Audience Member1:06:22

Grzegorz from Jastrzębie-Zdrój. Regarding GOG Galaxy 2.0: Have you already had talks with other platforms, or are you waiting for their response?

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Adam Kiciński1:06:37

It's a business kitchen; work on Galaxy 2.0 has been ongoing for a long time, not just three months. We cannot disclose details.

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Audience Member1:06:52

Hello, I'd like to ask about the Witcher world and its further monetization. With the Netflix series coming, new generations might discover it. What is your current team working on for further monetization of that universe? No Witcher 4, but what about other products?

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Adam Kiciński1:07:25

We still actively sell The Witcher 3—it doesn't sell itself; we support it with promotions. Gwent is another monetization path for the Witcher universe. Beyond that, I can't say.

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Audience Member1:08:07

What share of microtransactions do you plan in your games?

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Adam Kiciński1:08:22

We don't have precise plans in that area. We have full funding for several years ahead, but setting a specific percentage for microtransactions doesn't make sense. Currently, most of our revenue comes from game sales, and that won't change soon because Cyberpunk is a single-player game sold in the classic model.

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Audience Member1:09:10

How did you come up with the idea to reset the Cyberpunk Twitter account after years of inactivity?

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Adam Kiciński1:09:20

We wanted to signal to players to start waiting, because with surprises, it's important to hint that something might happen, so the surprise has an even bigger effect.

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Audience Member1:09:50

Arkadiusz Jakubowski: Are you present in the Chinese market? Any problems?

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Adam Kiciński1:09:55

We are present in China with both The Witcher (via Steam offshore) and Gwent (certified). No problems, but we are learning the market—it's demanding with strong local competition.

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Audience Member1:10:47

Would you like to see a multiplayer version of Cyberpunk one day?

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Adam Kiciński1:11:00

As we've said many times, there will be some online component at some point, but our primary focus is single-player. That's our next big event.

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Interviewer1:11:22

Thank you very much, Mr. Chairman. Adam Kiciński's presentation. Thank you on behalf of the organizers. We hope it wasn't too long.

#WallStreet23: Spotkanie z Adamem Kicińskim, prezesem CD Projektu | Bankier.pl