The “magic” of The Witcher: no title in Europe promises more than the video game

MILAN – Forget the new fintech players, the pharmaceutical powerhouses, or the giants of traditional industry. On European markets, the most expensive stock of all involves monsters and fantasy characters. As Bloomberg reports, the Polish company CD Projekt SA is currently at the top of Europe's financial markets. The Witcher video game studio is trading at stellar multiples, with a market capitalization 29 times this year's expected revenue. Essentially, the market already values ​​it far above its current fundamentals, imagining a surge in revenue.

Investors are attracted by the potential sales boost associated with the new installment of the medieval fantasy role-playing game, the fourth in the series, which analysts estimate could triple sales by 2027. "Investing in video game publishers means betting on future releases, and given the popularity of The Witcher saga, it seems the hype isn't over yet," said Piotr Poniatowski, an analyst at mBank SA, quoted by Bloomberg. However, just this week, Poniatowski lowered his rating on the stock from "buy" to "sell," citing the strong stock market rally and the appreciation of the zloty against the dollar. "We still consider CD Projekt to be the highest-quality stock in the Polish gaming landscape," he wrote in a note to clients.

The rave reviews for the trailer released six months ago seem to justify the stock market euphoria. But CD Projekt investors have been burned before: in 2020, the stock tripled in value in anticipation of Cyberpunk 2077 , but then plummeted after its release, plagued by bugs and technical issues.

The success of The Witcher IV – Bloomberg writes – is crucial for CD Projekt: the previous installment was the studio's biggest hit, with 60 million copies sold since 2015, also helped by the Netflix series. "We've seen this kind of euphoria before," said Valavanis of Forte. "There were also high expectations for Cyberpunk , which grew over a very long development cycle."