This time last year a group of investors filed a class-action lawsuit against CD Projekt Red over Cyberpunk 2077’s disastrous launch, saying the game was “virtually unplayable on the current-generation Xbox or Playstation systems due to an enormous number of bugs”.
The class-action lawsuit, filed by Manhattan-based Rosen Law Firm in California’s Central District Court on behalf of investors, argued:
(1) Cyberpunk 2077 was virtually unplayable on the current-generation Xbox or Playstation systems due to an enormous number of bugs; (2) as a result, Sony would remove Cyberpunk 2077 from the Playstation store, and Sony, Microsoft and CD Projekt would be forced to offer full refunds for the game; (3) consequently, CD Projekt would suffer reputational and pecuniary harm; and (4) as a result, defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages.
Twelve months later and the case has been settled, with CDPR issuing a statement today that reads:
“In the framework of negotiations concerning a potential settlement agreement in a case pending before the US District Court for the Central District of California (hereinafter referred to as “the Court”), a proposal regarding key terms, which – if agreed upon – would provide the basis for a prospective written settlement agreement was officially formulated on 7 December 2021. According to these terms, members of the class (including the plaintiffs) would relinquish all claims against the Company and members of its Management Board. Furthermore, under the agreement, a settlement in the amount of 1 850 000 (one million eight hundred and fifty thousand) USD would be paid out to the class by the Company and its insurer – Colonnade Insurance S.A.”
In relation to the above information, the Management Board of the Company wishes to inform that following the conclusion of negotiations on 15 December 2021 (of which the Company received notice on 16 December 2021) the sides signed a binding Settlement Term Sheet (hereinafter referred to as “the Term Sheet”) specifying key provisions of the settlement agreement. The Term Sheet stipulates that the settlement shall cover all parties to the case (including members of the class).
CDPR then go on to list the reasons for the settlement, with top spot going to “the duration and costs related to further legal proceedings in the U.S”:
As expressly stated in the Term Sheet, execution of the Term Sheet does not imply admission of any responsibility on the part of the Company or any of the other defendants named in the case.
The Company wishes to announce that its decision to enter into this settlement agreement was motivated by (i) the duration and costs related to further legal proceedings in the U.S., which might arise irrespective of the Court’s findings; (ii) acceptance of the key provisions of the settlement agreement by the Company’s insurer; (iii) opinion expressed by the U.S. law firm representing the Company and the other defendants named in the case recommending acceptance of the agreement; (iv) the general practice in the U.S. of concluding such litigation by way of an out-of-court settlement.
A reminder that this class-action wasn’t filed on behalf of fans or those who had bought the game on PS4/Xbox One and been lumped with something unplayable. It was just by and for investors.
