Not everyone lost money on the Cyberpunk fiasco

Follow Us Get the newsletter Hi everyone, it's Jason. Cyberpunk 2077 was the video game industry's biggest flop of 2020. Its myriad glitches fueled the internet's meme machine, and Sony Corp. still refuses to sell the game through its online store. Yet, the executives who run the Polish studio that made the game will nonetheless receive millions of dollars in bonuses this year. The rest of the staff will also get bonuses, but some of them expected bigger ones, and may have gotten more if the game's release had been delayed until it was ready, as they'd asked. If developers had more time to work out the kinks and bugs, then CD Projekt SA would likely have sold more games, leading to higher profit. Instead, management pushed the game out anyway. Pay disparities between executives and their employees is a perennial issue throughout the business world, made more urgent by the coronavirus pandemic during which millions of people lost their jobs. The typical CEO among the 1,000 biggest publicly traded companies in the U.S. receives 144 times more than their median employee, according to data compiled by Bloomberg.  The games industry has been a common battleground on this topic. For example, Activision Blizzard Inc. shareholders have been agitating for reductions in the CEO's pay since at least early last year. And this week, the company apparently bent to those pressures when it said CEO Bobby Kotick would take a 50% pay cut as part of a contract extension. Thanks to a lot of marketing hype, Cyberpunk, a sci-fi dystopia starring Keanu Reeves, sold 13 million copies in the first 10 days after its December launch. But that was less than analysts were expecting. Cyberpunk's score on Metacritic, a review aggregation site, was a paltry 57 out of 100 for the maligned PlayStation 4 version. CD Projekt CEO Marcin Iwiński made a public mea culpa about the state of the game. Yet Iwiński and co-CEO Adam Kiciński are each slated to receive a bonus of 24 million zloty, or $6.3 million, according to the company's annual report. Adam Badowski, a board member and the director of Cyberpunk 2077, will take home $4.2 million. These bonuses, part of an annual profit-sharing plan, are based on the company's 2020 net earnings, which jumped more than 500%.  Let's break down the numbers. Of CD Projekt's annual earnings, 20% is allocated to profit-sharing bonuses, with 10% going to employees and 10% going to the board, according to the company. Some employees told Bloomberg they will receive profit-sharing bonuses of about $5,000 to about $9,000, while other more senior employees said they will get closer to $15,000 or $20,000. Managers and directors will likely receive much higher bonuses. In a statement, a CD Projekt spokesperson said that the company had allocated a total of $29.8 million to 865 employees, for an average of about $34,000 each. (Staff also received separate, smaller performance bonuses earlier this year.) In contrast, just five of CD Projekt's board members received bonuses totaling $28 million. CD Projekt executives did take a financial hit this year. Four board members own roughly 33% of the company's stock, which has plummeted 57% since Cyberpunk's launch. But they'll also receive more in a year of bonuses than many workers will be paid in a lifetime. When asked on the investor call last week whether it was "appropriate" for the board to take such hefty bonuses, Kiciński said that their compensation had "always" been tied to the company's profits. "We earned this money and the company earned this money, of course, but more net profits, more bonuses," he said. "So well, we have results, we get bonuses, and that's the contract we have." The good news is that CD Projekt appears to be re-examining its practices in an attempt to keep staff from departing—a concern that Kiciński acknowledged on the call. One employee said that this year, the company reevaluated salaries and increased wages for some of the lowest-paid positions, such as testing, to align them with video game industry standards. Even so, the compensation chasm between them and the studio heads remains vast.  –Jason Schreier If you read one thing Before his bet on cryptocurrency exchange Coinbase, Union Square Ventures co-founder Fred Wilson compared Bitcoin to science fiction. Eight years later, Wilson's wager became Union Square's most profitable exit, valuing the firm's stake at $4.6 billion after Coinbase's public listing. And here's what you need to know in global technology news   There were a lot of tech earnings this week. As we wrap up the biggest ones, Amazon reported a 44% jump in first-quarter revenue to $108.5 billion. The e-commerce giant also forecast sales in the second quarter that were better than analysts were expecting, signaling they think people will find it hard to kick their online shopping habit. On the other hand, Twitter isn't as optimistic about revenue in the current period, showing it hasn't fully capitalized on the digital advertising boom amid the pandemic like companies such as Facebook and Google. Apple had a blowout quarter, but its shares fell Thursday amid concern that the global chip shortage is crimping what could be even more sales of iPads and iMacs.  Elsewhere in tech, cybersecurity experts, law enforcement agencies and governments urged the White House to root out safe havens for criminals engaging in ransomware and step up regulation of cryptocurrencies, the lifeblood of hackers, in the hopes of controlling a growing wave of attacks.   Like Fully Charged? | Get unlimited access to Bloomberg.com, where you'll find trusted, data-based journalism in 120 countries around the world and expert analysis from exclusive daily newsletters.   You received this message because you are subscribed to Bloomberg's Fully Charged newsletter. 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