CD Projekt, a Polish computer game developer best known for the Witcher series, has overtaken Poland’s largest bank PKO BP to become the highest valued company on the Warsaw Stock Exchange (GPW).
The gaming company’s valuation hit 27.6 billion zloty (€6 billion) on Thursday, reported Gazeta.pl, surpassing three state-controlled firms: PKO BP, worth 27.3 billion zloty, as well as insurer PZU and oil refiner Orlen.
Last month, financial news website Bankier.pl reported that CD Projekt had already become the company with the greatest weight in the WIG20 index of the 20 largest companies on the GPW, which depends on both stock value and volume. CD Projekt now accounts for 13.88% of the index, while PKO BP for only 13%.
The changing valuations come down largely to the resilience of the gaming sector during the current coronavirus fallout. WIG-Games was the only industry index on the GPW to not fall in the first quarter of 2020, while the WIG20 lost 30% of its value.
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As more people stay home, many are turning to online games. Video game distribution platform Steam recorded its highest ever number of users last weekend, with 23 million simultaneous players. CD Projekt’s Witcher 3, released in 2015, was amongst the 100 most popular games, reported Bankier.pl.
The three games in the Witcher series, which are based on fantasy novels by Polish writer Andrzej Sapkowski, are already one of the best-selling video game franchises in history, with at least 40 million copies sold worldwide. The recent Netflix Witcher TV adaptation has also revived interest in both the games and original books.
CD project currently faces a crunch period as it prepares for its first new release in five years, the much-anticipated Cyberpunk 2077 game. The company has recently assured fans and investors that they are working remotely to keep to the 17 September release date, which has already once been postponed from the original target of April 2020.
Over the past decade, the company’s stocks have risen by 21,000%, marking the highest increase of any European company in the Stoxx Europe 600 index.
In recent days there has been a reshuffle on the list of largest companies, as stocks rebounded after last month’s spectacular falls set off by fears of economic fallout due to the coronavirus.
In late February, Poland’s stock market had its worst week in twelve years. The WIG20 fell by 15.64%. That came close to matching the worst week in its 26-year history, in April 1994, when stocks fell 15.9%, reported Business Insider.
Banks such as PKO BP have been especially struggling, with the WIG-Banki index falling by 36% over the past month. Despite the government’s recent assurances as part of a multi-billion economic support package, banks are bracing for repayment delays and defaults.
“Banks may soon have to face worsening credit portfolios [with more defaults], lower sales and decreased revenue from interest. Banks will end up bruised by the current crisis,” said Andrzej Powierża, analyst at Citi Handlowy brokerage house, as reported by PAP.
Another company which has taken a beating is CCC, the largest footwear firm in central Europe, whose market value has slumped by 75% in the past three months, as it faced disruptions in supply chains and worries about future sales.
The company has announced that it will be scaling back on investments, while refocusing its efforts on developing online sales, reported Bankier.pl.