The upgrade was being worked on by Saber Interactive.
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CD Projekt Red announced today that the PlayStation 5 and Xbox Series X|S upgrade for The Witcher 3 has been delayed indefinitely. The studio announced that they have pulled development of this upgrade from Saber Interactive. Specifically, it was being worked on by Saber Interactive's Russia office.

CD Projekt Red says that they "have decided to have our in-house development team conduct the remaining work on the next-gen version of The Witcher 3: Wild Hunt." At present, the studio is currently evaluating the "scope of work to be done and thus have to postpone Q2 release until further notice."

The upgrade for the next-gen platforms was announced back in September 2020. The update was delayed from last year to sometime this Summer. The upgrades included things like various visual improvements, ray tracing support, and faster load times, to name a few. All of these improvements were also supposed to hit PC.

Saber Interactive has their headquarters in Florida, but their first game studio is located in St. Petersburg, Russia. This is the same studio that handled the Nintendo Switch release of The Witcher 3 for CD Projekt Red. CD Projekt Red did not specify whether or not the Russian invasion of Ukraine is the reason for this decision.