CD Projekt
History :
CD Projekt, founded in 1994 by Marcin Iwiński and Michał Kiciński is a video game distribution company in Poland. The company would distribute localized CD based software imported from publishers like Acclaim, Blizzard, Blue Byte, Interplay and Psygnosis, offering localized Polish manuals and boxes. In 1999 they released the Polish edition of the popular Baldur's Gate, using polish voice talent. The company grew in size and distribution rights until they started to offer series of affordable classic games.
In 2002 they founded a studio called CD PROJEKT REDSp. z o.o that would develop a new role playing game set in the world of the very popular series of books called “The Witcher”. After five years in development with a staff of 100 the first Witcher game went gold in 2007. It gained critical acclaim with over 100 awards, it was considered one of the greatest RPGs of the year.
A year later, GOG.com short for “Good Old Games” was created as a digital distribution service. It was created as a way to distribute games without DRM protection and in October 21st a Declaration of Intent was signed by the representatives of Optimus S.A aquiring 100% of the company's stock in a friendly takeover making the CDP, the holding company of CD Projekt, CD Projekt Red, and GOG Ltd, the core of its buisness. Becuase Optimus was originally a manufacture of computer hardware, they changed their name to CD Projekt RED S.A acquiring CD Projekt Red Sp. Z o.o subsidiary in early October 2011. A year later the CD Projekt changed its name to match CDP.pl, a widespread media distribution service for Poland with over 100 titles. But in November 2012 the General Meeting of Shareholders decided to return its name to CD Projekt.
Current Products:
CD Projekt, founded in 1994 by Marcin Iwiński and Michał Kiciński is a video game distribution company in Poland. The company would distribute localized CD based software imported from publishers like Acclaim, Blizzard, Blue Byte, Interplay and Psygnosis, offering localized Polish manuals and boxes. In 1999 they released the Polish edition of the popular Baldur's Gate, using polish voice talent. The company grew in size and distribution rights until they started to offer series of affordable classic games.
In 2002 they founded a studio called CD PROJEKT REDSp. z o.o that would develop a new role playing game set in the world of the very popular series of books called “The Witcher”. After five years in development with a staff of 100 the first Witcher game went gold in 2007. It gained critical acclaim with over 100 awards, it was considered one of the greatest RPGs of the year.
A year later, GOG.com short for “Good Old Games” was created as a digital distribution service. It was created as a way to distribute games without DRM protection and in October 21st a Declaration of Intent was signed by the representatives of Optimus S.A aquiring 100% of the company's stock in a friendly takeover making the CDP, the holding company of CD Projekt, CD Projekt Red, and GOG Ltd, the core of its buisness. Becuase Optimus was originally a manufacture of computer hardware, they changed their name to CD Projekt RED S.A acquiring CD Projekt Red Sp. Z o.o subsidiary in early October 2011. A year later the CD Projekt changed its name to match CDP.pl, a widespread media distribution service for Poland with over 100 titles. But in November 2012 the General Meeting of Shareholders decided to return its name to CD Projekt.
Current Products:
CDP Projekt currently contains :
CD Projekt Capital group – Is the main holding company
CD Projekt RED Studio – Is a game development studio, active since 2001. Creators of the Witcher franchise and currently in development of Cyberpunk 2077.
CDP.pl Sp. Z o.o. - the leading Polish publisher of video games, books, and movies active since 1994. It is stocked by over 2,000 retailers throughout poland and distributes propietary software digitally through CDP .pl.
GOG Ltd.- one of the foremost digital videogame distribution platforms, unique in its ultramodern business model banning the sale of any game containing DRM.
Location:
CD Projekt is an International company that has its roots in Poland. It is the biggest publisher of media within Poland. It's offices are located at ul. Jagiellońska 74 03-301 Warszawa.
In 2012 CD Projekt has made a total retained earning of 76,459,000 Polish Zloty, which equates to 24,430995.75 USD. In assests by the first half of 2013 they have 200,819,000 PLN in assets. The customers are primarlly located in western markets for their digital Distribution and game development, and their publishing company is contained entirely in Poland.
CD Projekt Capital group – Is the main holding company
CD Projekt RED Studio – Is a game development studio, active since 2001. Creators of the Witcher franchise and currently in development of Cyberpunk 2077.
CDP.pl Sp. Z o.o. - the leading Polish publisher of video games, books, and movies active since 1994. It is stocked by over 2,000 retailers throughout poland and distributes propietary software digitally through CDP .pl.
GOG Ltd.- one of the foremost digital videogame distribution platforms, unique in its ultramodern business model banning the sale of any game containing DRM.
Location:
CD Projekt is an International company that has its roots in Poland. It is the biggest publisher of media within Poland. It's offices are located at ul. Jagiellońska 74 03-301 Warszawa.
In 2012 CD Projekt has made a total retained earning of 76,459,000 Polish Zloty, which equates to 24,430995.75 USD. In assests by the first half of 2013 they have 200,819,000 PLN in assets. The customers are primarlly located in western markets for their digital Distribution and game development, and their publishing company is contained entirely in Poland.
Culture of the Company: CD
Projekt is unique in its firm stance against DRM policies, and it's
ultra modern pricing policy defines them and their industry unique
brand trust with its consumers. DRM stands for Digital Rights Media,
copyright protection placed on software that limits what the user can
do with digital media. It is used as form to combat piracy, with far
reaching measure that include a constant internet connection to
access the content. CD Projekt has a firm stance against it,
promising consumers that not only their produced content of the
Witcher will never contain DRM, but there will be no DRM content sold
on their distribution site GOG.
Their belief is that the consumer
comes first, and that a company that respects their customers will
retain them for life. Directly on their website they state “The
mission of the CD PROJEKT Capital Group is to develop cutting-edge
innovative products and services sought after by gamers worldwide. In
doing so the Group emphasizes direct, open and honest communication
as a means of building trust and long-term relationships with
clients.” As proof, the company will often give out open letters to
the community, addressing concerns and answering questions. Within the development office of CD Projekt, there is a culture of a flat hierarchy. You can give constructive criticism or ideas to anyone. No one person is above anyone else, everyone gets a say in how something should be made. People who design the quests for the game get to do whats called “Stand Up”, where they talk about what they did the day before and their goals for that day. The company at every level is structured around open communication.
Ethical reasoning:
As a company, CD Projekt red will try to do what is in its best interest, but they do have a set of core pro consumer principles that make me believe they are operating on the sixth level of Kohlberg's Stages of Ethical Reasoning. The sixth stage describes making a decision based on principle, that someone operating on this level must have a strong sense of justice, willing to break law if they see it as unjust.
CD Projekt operates on an ethical level when it comes to their anti-DRM polices. They don't use it because not only they believe it doesn't work, but that they have a strong belief that the consumer owns the product they sell them. They are fully aware that by conventional reasoning, a product with no protection against pirates will logically have less sales, but they truly believe in customer rights. That combined with their position on completely free DLC, used as a “thank you” to the fanbase. It is unheard of in an industry that would restrict content, already on the disk that was paid for in full, to unlock as paid dlc later.
Human Resources:
CD Projekt keeps their human resource information internal in order to protect their employees.
Code of Ethics:
CD Projekt contains extensive code of conduct. It's corporate website contains Regulations of the Board, Terms of General Meetings, a code of conduct for GOG's policy on holding private information, National Court Register, Terms of the Supervisory Boards. They are PDFs (some in polish only) and GOG's website contains a webpage that explains in plain terms the code of conduct. When installing the client for GOG it gives a detailed CoC for the user.
The Private Policy on GOG assures the user that they will store information on the site that you are not forced to give out. They also tell you that while they use personal information, they do not share those details with third parties. The pdf containing the boards polices details the composition and appointment of the board. Translated from polish here are the polices:
1 The Board consists of two or more members. The Board may enter
Chairman of the Board .
2 Members of the Board , including the Chairman , are appointed and dismissed by the Supervisory Board.
3 Members of the Board , including the Chairman, are appointed for a joint term of office ,which is two years.
These documents focus primarily on the Senior and Executive management of the business. The Middle Management is not discussed outside of interviews that suggest a open and flat hierarchy within development.
Conflict of interest:
Conflict of interest is the term used to describe someone whose goals contradicts the role they are placed in, and abuses the relations and connection they have for self interest. In CD Projekt's Regulations of the Board and Terms of the Supervisory Board documents, they describe the actions taken to prevent a conflict of interest. A board member will not deal with competitive business or participate in a competitive company as a partner civil partnership or as a member of the body of a company without the consent of the Supervisory Board. A Member of the Board may also only appoint a single member to the board of directors if they have at least 10 percent shares. Also it is stated that they should inform the board of any conflict of interest. When a member of the Supervisory Board has connections to a non-group Company they will inform the other members of the Council and will refrain from taking part in the discussion or vote on a case.
It is my opinion that the company has no conflict of interest and currently holds documented procedure available to the public in which case one would arise. Both Adam Kicinski and Marcin Iwinski as President and Joint CEO of CD Projekt have no board or supervisory membership roles within the company. They both own a combined 26.23 share of the company. The other members of the Gernal Assembly hold a combined 29.54 percent hold of the company, therefore both join CEOs do not hold any power over the General Assembly.
Triple bottom line:
Triple bottom line is the three main interests that a company has. These interests are divided into environment, people, and profit. While the company does provide a lot of information about its companies and its practices, no where in all of its documents does it describe a triple bottom line. This may have to deal with the fact that the Triple bottom line does not extend to company who deals mostly in digital distribution.
Corporate social responsibility:
CD Projekt has a clearly defined company policy and sense of social conscience, and I believe that is the only digital distributor who is doing the right thing within its industry. I can easily define this company as being incredibly ethical towards its consumer, in fact one of the only ones in the whole industry. The norm of the gaming industry is to focus on test data and current trends, use systems that are considered “safe” to secure sales instead of focusing on delivering a good product.
For example at CD Projekt RED doesn't split its development studio into multiple smaller mobile gaming studio, effectively killing beloved franchises and cashing in on quick sale sub par games that are released quarterly like other giants in the industry. So far they have stuck to releasing one title and giving it all the time it needs to make sure it has quality assurance and free of bugs, where other companies rush to make a dead line and simply patch performance issues later. They offer free, completely free content, costing development time and money for nothing just to thank players where others would cut up a complete game, sell it as incomplete, and expect the customer to unlock the rest of the content already on the disc with additional payments.
CD Projekt has a community wish-list, a set of consumer voted products and site features that directly impact the corporate governance. They have charity events, where they ask consumers to pay what they want for a bundle of games and 100% of what they pay for goes to a charity of their choice.
Then there is their stance on anti-DRM. They have stated in multiple interviews and community letters what their thoughts are on DRM, why it doesn't work, why they say they will never use in their games, why it is unethical and why it is hurting the gaming society as a whole. If there is any doubt about how committed they are to anti-DRM just look at their latest lawsuit. The Witcher 2, the latest game from CD Projekt RED was distributed digitally through its distribution company GOG free of drm, but CD Projekt RED couldn't publish the game on its own for retail at the time. It had to sign a deal with Namco Bandai who required DRM on the product. However, they released a patch that would remove this DRM without the granted permission of Namco Bandai. This is level six ethics, the willingness to break rules in order to do whats right and in the best interest of the stakeholders.
For example at CD Projekt RED doesn't split its development studio into multiple smaller mobile gaming studio, effectively killing beloved franchises and cashing in on quick sale sub par games that are released quarterly like other giants in the industry. So far they have stuck to releasing one title and giving it all the time it needs to make sure it has quality assurance and free of bugs, where other companies rush to make a dead line and simply patch performance issues later. They offer free, completely free content, costing development time and money for nothing just to thank players where others would cut up a complete game, sell it as incomplete, and expect the customer to unlock the rest of the content already on the disc with additional payments.
CD Projekt has a community wish-list, a set of consumer voted products and site features that directly impact the corporate governance. They have charity events, where they ask consumers to pay what they want for a bundle of games and 100% of what they pay for goes to a charity of their choice.
Then there is their stance on anti-DRM. They have stated in multiple interviews and community letters what their thoughts are on DRM, why it doesn't work, why they say they will never use in their games, why it is unethical and why it is hurting the gaming society as a whole. If there is any doubt about how committed they are to anti-DRM just look at their latest lawsuit. The Witcher 2, the latest game from CD Projekt RED was distributed digitally through its distribution company GOG free of drm, but CD Projekt RED couldn't publish the game on its own for retail at the time. It had to sign a deal with Namco Bandai who required DRM on the product. However, they released a patch that would remove this DRM without the granted permission of Namco Bandai. This is level six ethics, the willingness to break rules in order to do whats right and in the best interest of the stakeholders.
Evolution of the company:
CD Projekt started out innocently enough; they joined the business because out of high school, both Iwinski and Kicinski imported games from wholesalers to sell in Poland. They literally went to the Tax Office and asked “Hey we want to start a company, what do you have to do?” In 1994 they had $2000 and a computer in assets.
A lot of how they started out defined their business practices as time went on. As a legitimate publisher in Poland their main competition were pirates. They devised a business plan to try to convince people to buy legitimate copies instead of pirated ones. They bet on a game Baldur’s Gate, they knew it was a good investment because they played it and though it was amazing, but also because of two strategic reasons. The game was very text heavy, and a lot of people in Poland at the time spoke either Russian or polish, so Russian speakers couldn't enjoy a pirated version. Secondly the game was huge in size at the time coming on 5 discs, more discs left pirates with less profit.
The risk was immense, it cost over $95,000 to license and get it localized, then the additional costs of hiring famous polish voice actors and marketing. It goes without saying that the entire business rode on the success of this one product. Pirates could sell this game at the cheapest for $25 dollars and CD Projekt offered it for twice that amount; however they offered the added value of a legitimate copy, an audio Cd a locally sourced D&D rulebook, and a parchment map sealed with wax. The company was hoping that people would pay twice as much for a quality product. It paid off in spades, the 3000 ordered units grew to 8000 months before release, and on day one they shipped 18,000 units. The company owes its current business practices to their early anti-piracy measures by offering a good product that extends into the digital age, offering free tech support, unique guides, cd tracks, and re-mastering the game for performance earning the respect of PC gamers worldwide.
A lot of how they started out defined their business practices as time went on. As a legitimate publisher in Poland their main competition were pirates. They devised a business plan to try to convince people to buy legitimate copies instead of pirated ones. They bet on a game Baldur’s Gate, they knew it was a good investment because they played it and though it was amazing, but also because of two strategic reasons. The game was very text heavy, and a lot of people in Poland at the time spoke either Russian or polish, so Russian speakers couldn't enjoy a pirated version. Secondly the game was huge in size at the time coming on 5 discs, more discs left pirates with less profit.
The risk was immense, it cost over $95,000 to license and get it localized, then the additional costs of hiring famous polish voice actors and marketing. It goes without saying that the entire business rode on the success of this one product. Pirates could sell this game at the cheapest for $25 dollars and CD Projekt offered it for twice that amount; however they offered the added value of a legitimate copy, an audio Cd a locally sourced D&D rulebook, and a parchment map sealed with wax. The company was hoping that people would pay twice as much for a quality product. It paid off in spades, the 3000 ordered units grew to 8000 months before release, and on day one they shipped 18,000 units. The company owes its current business practices to their early anti-piracy measures by offering a good product that extends into the digital age, offering free tech support, unique guides, cd tracks, and re-mastering the game for performance earning the respect of PC gamers worldwide.
Corporate governance:
CD Projekt is a unique company. They were born from humble beginnings distributing games in Poland as a way to earn cash. The people who are in charge are the people who are legitimately passionate about the industry itself, they as much of a consumer as their customers are. Michal Kiciniski holds a certain disdain for some other companies, he is a person who believes he is among a rare few who doesn't look at what numbers a game sells, but what they are actually selling. Here lies CDP's core belief of anti-DRM.
The question of "should we embrace DRM as a company" is absolutely an ethical issue, games with no protection are that much easier to pirate, with the belief that every pirated copy is a lost sale, and this scares publishers to incorporate these polices. But is it right to punish the people who pay for the content? Is it right to say that they have no ownership at all over what they purchased, to say "This isn't really something we sold you, we just lent you a licence, its your privilege to play what you payed for"? CD Projekt says no, they want to give you a better product as a means to prevent piracy, and part of that is offering something that you not only own but can not interfere with the game's performance.
Not only that but CD Projekt is structured in such a way that the shareholders hold a certain amount of power, the board changed the name in 2012 to CDP.pl, and 2 months later the shareholders held a meeting to change it back. There is a level of respect and power within the power structure that is fair and balanced.
However its important to remember that even though CD Projekt will respect the shareholders, they are still some core values that they will not compromise to appease them. In other companies when a game on the PC doesn't "sell as well as it should" executives can use piracy as an excuse, and DRM as a way to cover their ass. CD Projekt knows better, and will not compromise the ethical production by cutting quality assurance to meet a deadline, splitting up teams, putting purchasable content on the disc you already own. Their philosophy is that as businessmen they have no right to tell design team how to make their products.
This carries into the board room too, the CEO is the chair of the board, however the five members of the board of CD Projekt match the supervisory board of outside directors. The Supervisory Board operates in accordance with the Polish Corporate Law and the Company Statute. The responsibilities of the Board include overseeing the activities of Company. The Supervisory Board performs its duties inter alia by issuing recommendations and adopting resolutions. Members of the supervisory board are also members of other supervisory boards, and whose identities are shown to the general public.
Conclusion:
In conclusion, the company is unique to the others. It's board is balanced to prevent conflict of interest, and the outside supervisory board has enough power to make sure the company is clean. The company has a super high standard of professional and ethical operation of itself.
Compared to the other companies, CD Projekt is the youngest, and therefore is controlled by the two people who built it from the ground up. It has a very defined code of ethics that is arguably against the gain of the company. The company has no need to do good for society at large, it is respected by the audience as one of the most honest and fair companies, however that does not mean it has no room for charities and signs of good will.
The single most defining thing that differentiates CD Projekt from the rest of the companies, other than its board structure, is its code of ethic. The one, single one. Not only does it separate itself from the rest on this group, its a core belief that divides itself from the industry at large. And that is it's anti-DRM policy, a basic ethical belief that what you own is yours, and is something that the company itself is willing to get into legal trouble just to overcome. It's hard to name a company that not only does so good by omitted bad practices inside of the industry, but has an incredible standard of corporate governance outside of it.
Citation:
. N.p.. Web. 15 Nov 2013. <https://www.cdprojekt.com/>.
List of Buisness Documents
. N.p.. Web. 15 Nov 2013. <https://www.cdprojekt.com/Grupa_kapitalowa/Dokumenty_korporacyjne>.
. N.p.. Web. 15 Nov 2013. <gog.com>
. N.p.. Web. 15 Nov 2013. <cdpred.com>
Intern interview
. N.p.. Web. 15 Nov 2013. <http://cdpred.com/lykaon-a-quest-completed>
. N.p.. Web. 15 Nov 2013. <http://www.gamepolitics.com/2013/11/12/cd-projekt-red-publishers-use-drm-cover-their-own-asses>
Forbes articleGriffiths, Daniel Nye. "'The Truth Is, It Doesn't Work' - CD Projekt On DRM." Forbes. Forbes Magazine, 18 May 2012. Web. 15 Nov. 2013.
"Fan Pressure Causes CD Projekt to Stop Pursuing Pirates." 1Up.com. N.p., n.d. Web. 15 Nov. 2013.
"Namco Bandai Wins Witcher 2 Suit against CD Projekt - GameSpot." Namco Bandai Wins Witcher 2 Suit against CD Projekt - GameSpot. N.p., n.d. Web. 15 Nov. 2013.
List of Buisness Documents
. N.p.. Web. 15 Nov 2013. <https://www.cdprojekt.com/Grupa_kapitalowa/Dokumenty_korporacyjne>.
. N.p.. Web. 15 Nov 2013. <gog.com>
. N.p.. Web. 15 Nov 2013. <cdpred.com>
Intern interview
. N.p.. Web. 15 Nov 2013. <http://cdpred.com/lykaon-a-quest-completed>
. N.p.. Web. 15 Nov 2013. <http://www.gamepolitics.com/2013/11/12/cd-projekt-red-publishers-use-drm-cover-their-own-asses>
Forbes articleGriffiths, Daniel Nye. "'The Truth Is, It Doesn't Work' - CD Projekt On DRM." Forbes. Forbes Magazine, 18 May 2012. Web. 15 Nov. 2013.
"Fan Pressure Causes CD Projekt to Stop Pursuing Pirates." 1Up.com. N.p., n.d. Web. 15 Nov. 2013.
"Namco Bandai Wins Witcher 2 Suit against CD Projekt - GameSpot." Namco Bandai Wins Witcher 2 Suit against CD Projekt - GameSpot. N.p., n.d. Web. 15 Nov. 2013.
