Maker of Panned Cyberpunk 2077 Game Hit with Class Action Lawsuit Over Stock Price Drop [UPDATE]
Last Updated on February 2, 2022
Trampe v. CD Projekt S.A. et al.
Filed: December 24, 2020 ◆§ 2:20-cv-11627
The developer behind Cyberpunk 2077 has faces a stock-drop class action after the "virtually unplayable" game was pulled from online stores.
Case Updates
February 2, 2022 – Cyberpunk 2077 Class Action Settled for $1.85 Million
The Polish developer behind the glitchy Cyberpunk 2077 first-person shooter game has agreed to settle the proposed class action detailed on this page for $1.85 million.
A 33-page motion for preliminary settlement approval describes the proposed deal as a “fair, reasonable, and adequate result” for investors considering the significant risks of continuing the litigation over the “virtually unplayable” game.
“Plaintiffs faced several obstacles if litigation were to continue including significant disputes over the amount of potentially recoverable damages, the availability of proof, Defendants’ potential defenses, the risks of prosecuting this litigation through trial, and the real danger that Plaintiffs would not be able to obtain a larger sum if litigation were to continue, as Defendants are located outside the United States and collection of any judgment would be burdensome,” the document, submitted on January 27, 2022, states.
If approved by the court, the deal would cover individuals who acquired CD Projekt-related equity securities publicly traded in domestic transactions from January 16, 2020 through December 17, 2020. Notices will be sent via email and regular mail to those covered by the deal should it get the initial OK from the judge.
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The Polish game developer behind Cyberpunk 2077 has been hit with a proposed class action lawsuit in California over allegedly false and misleading statements issued in the run-up to the open-world role-playing game’s December 10, 2020 release.
The 18-page securities case alleges CD Projekt shareholders were injured financially as a result of false and/or misleading statements and/or non-disclosures on the part of the company and its officers. Specifically, the lawsuit says the defendants were not forthcoming about the fact that Cyberpunk 2077 was “virtually unplayable” on current-generation Xbox and PlayStation systems due to “an enormous number of bugs,” and that as a result Sony would pull the game from the PlayStation store, and Sony, Microsoft and CD Projekt would be forced to offer buyers full refunds.
According to the complaint, the Warsaw-headquartered company, which boasts within its portfolio the game titles of The Witcher series and Hearts of Stones, among others, devoted substantially all of its resources to the development of Cyberpunk 2077 for several years. The game, originally slated for release on April 17, 2020, was set to appear on Sony’s PlayStation 5, Microsoft’s Xbox consoles, Google’s Stadia platform and Windows, the suit says.
Although CD Projekt announced on January 16, 2020 that Cyberpunk 2077 was “complete and playable,” the game’s release was delayed until September as the company “needed more time to finish playtesting, fixing and polishing,” a claim repeated in an April 8 disclosure for the 2019 fiscal year, the lawsuit states. When CD Projekt published its financial results for the first half of 2020, the company held on the same day a conference call in which it stated, in part, “. . . so we’re very close. Of course we’ll work on the title till the very end; that’s kind of normal. It’s a huge game, but as we said—everything is on track and we’re planning to launch it on 19 November,” the complaint says.
On an October 28, 2020 conference call, however, CD Projekt announced the release of Cyberpunk 2077 would be delayed three weeks to fix issues with current-generation console versions of the game, the case continues. During the call, one of CD Projekt’s officers stated, in part, that “there is optimization to be handled, also because of how we were approaching things from the get-go in terms of development; so—there is no problem with Xbox or PlayStation 4, to be honest,” the complaint reads. Positive statements continued to be disseminated by CD Projekt in a November earnings call, with an officer stating that “we believe that the game is performing great on every platform,” among other remarks painting a rosy picture of the much-anticipated project, the suit relays.
During the call, when asked about potential bugs in Cyberpunk 2077, CD Projekt’s CEO shared, in part:
“So, in terms of bugs, we are all aware of them. Of course, such a big game can’t be just bug free. That’s the kind of obvious, but we believe that the level will be as low as to let gamers not see them. And fortunately, some bugs extended previous were caused by some general -- I would say general features and many of them are already fixed. So, what gamers will get will be different from what -- and what we viewers will get in this final review is it’s better than what previewers, got.”
Upon Cyberpunk 2077’s release on December 10, 2020, however, current-generation console players found the game was “error-laden and difficult to play,” the lawsuit says. Video game publication IGN, the suit says, published a scathing review that highlighted the fact that the console versions of Cyberpunk 2077 “fail[] to hit even the lowest bar of technical quality one should expect even when playing on lower-end hardware,” and shared that the game “performs so poorly that it makes combat, driving, and what is otherwise a master craft of storytelling legitimately difficult to look at.”
In a subsequent conference call, CD Projekt’s CEO said the company and its management board “underestimated the scale and complexity of the issue, we ignored signals about the need for additional time to refine the game on the base last-gen consoles,” the lawsuit says, noting that the company, during the campaign prior to the game’s release, showed the product “mostly on PCs.”
Following Cyberpunk 2077’s release, CD Projekt’s American depository receipts (ADRs), or bank-issued certificates representing shares in a foreign company for trade in the U.S. financial markets, fell more than 25 percent over three trading days, according to the suit. Over that same period, CD Projekt’s common share price fell more than 20 percent, the case adds.
Upon news that Sony had decided to offer full refunds for those who bought Cyberpunk 2077 in the PlayStation store and remove the game until further notice, CD Projekt ADRs and common share prices sank again, by 15.8 percent and 10.45 percent, respectively, the suit says.
The lawsuit looks to represent those who bought or otherwise acquired publicly traded CD Projekt securities between January 16 and December 17, 2020.
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