The beginning bust of the online game Cyberpunk 2077 results in litigation with buyers

A video game developer is sued by a disgruntled investor after a publicly traded stock linked to the developer rose from $ 31 on December 4th to $ 18.35 on December 24th. The investor, trying to convert the case into a class action lawsuit, claims the stock was fraudulently inflated based on known false statements in public documents, conference calls and announcements.

The main defendant is CD Project SA, which has a history of developing video games including The Witcher series. The most anticipated release so far would be an open-ended, narrative role-playing game called Cyberpunk 2077, which was held back for many months in 2020. The game should play on consoles such as Sony’s Playstation 5 and Microsoft’s Xbox X.

The game was originally scheduled to be released on April 17th, 2020. The plaintiff says the false statements regarding the delay started a few months earlier, on January 16, when the developer stated that the game was complete and playable, but it took more time to test, repair, and polish the End game. With this announcement, a new publication date was set on September 7, 2020.

The developer released a press release three days before the newly set release date. In part, it stated that it was preparing for Cyberpunk 2077 final certification; However, the release date has been specified again, this time by November 19, 2020.

There was another delay announced on October 28, 2020. The latest release date for Cyberpunk 2077 would be three weeks later as the developer said it needed to fix issues with the current generation console versions. A statement by Michael Nowakowski, vice president of business development at CD Project SA, who is also named as a defendant in the lawsuit, could prove important to the plaintiff. He explained,

I wouldn’t say there is a “problem” because there is nothing wrong with it
Xbox or PS4 versions – optimization needs to be done, also because
how we approached things from the start
Development; So – there is no problem with Xbox or PlayStation 4
be honest.

On November 25, 2020, Adam Michal Kicinski, the joint managing director of CD Project SA, who is also a named defendant, said, “We believe the game will perform excellently on every platform. He mentioned that the team was aware of bugs in Cyperpunk 2077, “but we believe the level will be so low that players won’t be able to see them.”

In a section of the complaint entitled “The Truth Emerges,” the plaintiff said that after Cyberpunk 2077 launched on December 10, 2020, consumers soon discovered that the console versions of the current generation of the game were full of bugs and that made game difficult to play. A writer at IGN wrote that the game:

[F]It is difficult to get even the lowest technical quality one should expect, even when playing on lower end hardware. It’s so bad that it rightly makes fighting, driving, and what is otherwise a storytelling masterpiece difficult to look at. It’s not an exaggeration to say that after playing the game I felt sick from the terrible frame rate. It really is that bad, and it’s very suspicious that CD Projekt Red refused to provide copies of the console rating before launch. “

Four days after the game started, Kicinski admitted that the team underestimated the scale and complexity of the issues and ignored signals that more time was needed to refine the game. Four days after Kicinski’s approval, Sony announced to its customers that it would offer a full refund to all users who purchased Cyberpunk 2077 and remove the game from the Playstation Store. Microsoft also announced that it will offer refunds to Xbox customers.

The two-point complaint for violation of Section 10 (b) of the Stock Exchange Act and Rule 10b-5 on the one hand and Section 20 (a) of the Stock Exchange Act on the other hand is based on the finding that the accused actually disseminated or approved false statements of which they knew they were misleading.

It could be a complicated case for the plaintiff that the game developer has admitted for quite some time that there are bugs that need fixing and that the release of Cyberpunk 2077 is continuously being delayed, which it certainly would not have if it had If it had been deemed unnecessary, potential investors would have been truthfully informed about the risks of an investment. The public statements are meaningful on this point. Kicinski stated directly on November 25, 2020 that the game had flaws, that the game cannot be flawless, and that the team believes that the level is low enough that the players cannot see them.

Obviously, Kicinski was wrong. The errors were so great that the console manufacturers reimbursed payments to people who bought the game. The big question, however, is whether Kicinski and his team were intentionally wrong. Did you know the game was not ready to start and that the errors were more serious than reported? This is where discovery comes in as this case progresses.

The case is Trampe versus CD Project SA, et al. pending in the Central District of California. The plaintiff’s attorney is Laurence M. Rosen, Esq. of the law firm Rosen, PA

Darren Heitner is the founder of Heitner Legal. He is the author of How to Play the Game: What Every Sports Lawyer Needs to Know, published by the American Bar Association, and is an associate professor at Levin College of Law, University of Florida. You can reach him by email at [email protected] and follow him on Twitter @DarrenHeitner.

Comments are closed.