CD Projekt allocated $53 million for Cyberpunk 2077 refunds/returns

CD Projekt has set aside up to 194 million PLN ($51 million) total for Cyberpunk 2077 refunds, new earnings documents reveal.

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CD Projekt Group recently said it has only refunded roughly 8.2 million PLN ($2.27 million) in Cyberpunk 2077 refunds, but this value is only for its Help Me refund campaign that offered money back to consumers with no questions asked. The reality is that CD Projekt expects total refunds to reach around $53 million.

The info was outlined in the company's recent 2020 earnings report, which separates its refunds into short-term and long-term provisions. All companies set aside cash for various provisions especially for product returns. It's important to account for consumer refunds on your balance sheets. That's what CD Projekt has done here. Think of this money as "spent" because it's being reserved for a specific purpose.

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CD Projekt Group Consolidated Financial Statement, page 73

CD Projekt's short-term provisions account for the Q4 launch period of Cyberpunk 2077, and total up to 48.9 million PLN ($13.07 million). CD Projekt's Help Me refunds only accounted for 20% of total short-term provisions.

Long-term return provisions are much higher and cover a period outside of the Q4 launch window. CD Projekt has set aside 145.61 million PLN for long-term refunds, or about $40.23 million.

So what does this mean? Basically that CD Projekt Group is setting aside money for potential refunds based on estimations from retailers and other storefronts. This goes on CDPR's balance sheets as a particular business cost.

Even with this refunds, CD Projekt is doing very well. The company made more money in 2020 than it ever has before, and Cyberpunk 2077's Q4 launch period made more money than any other year's earnings combined.

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CD Projekt Group Consolidated Financial Statement, page 73

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CD Projekt Group Consolidated Financial Statement, page 40