CD Projekt Soars on Plan to Work With Epic on New Witcher
(Bloomberg) -- Shares in CD Projekt SA surged as much as 9.2% as Poland’s biggest video game maker switched to Epic Games Inc.’s technology for the development of the next phase of its popular medieval series The Witcher.
Warsaw-based CD Projekt said late Monday it would switch from its in-house platform REDengine to Epic’s widely-used graphics system in the next Witcher game it’s already working on. Analysts expect the studio to deliver the new title in 2025 or 2026.
The Polish company earned global acclaim in 2015 for its sword-and-sorcery fantasy production The Witcher 3: Wild Hunt, which it followed in 2020 with a futuristic dystopia Cyberpunk 2077.
Both were built using the REDengine, but Cyberpunk suffered from a series of graphical and gameplay glitches that spoiled the experience for early players. It also raised questions whether the company’s proprietary engine may still handle vast open-world game sceneries prepared for new consoles.
CD Projekt’s Switch to Epic’s Engine for Witcher 4 Seen Positive
Epic’s Unreal Engine is one of the most widely-used game-making toolkits. Its latest version, UE5, was showcased on Sony Group Corp.’s PlayStation 5 and Sony bought a $250 million stake in the company in 2020.
“If anyone can push the limits of the malleable Unreal Engine in open-world games, it’s CD Projekt’s engineers,” said Bernstein analyst Matti Littunen.
The Witcher, originally a fantasy series written by Andrzej Sapkowski, was also adapted by Netflix Inc. in a successful live-action series starring Henry Cavill and recreating the look of its titular character from the game’s design.
CD Projekt picked the Unreal Engine to “have the technical direction of our next game decided from the earliest possible phase,” Chief Technology Officer Pawel Zawodny said by email. “It will elevate development predictability and efficiency, while simultaneously granting us access to cutting-edge game development tools.”
Analysts from Trigon Dom Maklerski SA and MBank SA expect the switch to external, broadly-known technology to help CD Projekt recruit new developers and restore confidence in its production capabilities.
After an initial jump early Tuesday, CD Projekt trades 1.6% higher at 174.1 zloty per share at 10:48 a.m. in Warsaw. That’s 57% below the level seen before the release of Cyberpunk in Dec. 2020.
“Even as picking Unreal Engine seems a good long-term decision, the development of the new Witcher is only at very early stage,” Michal Wojciechowski, an analyst at Warsaw-based Ipopema Securities SA said.
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