There actually have been two of these searchings, one in early Feb 2004, one in late March 2004.
However, according to reliable sources (among them the largest and most distinguished IT specialized publisher), only the company itself had been searched in both cases. I found one source stating that also the private house of the (singular) company founder (which doesn't make much sense in first place, as there's 3 Yerli brothers who are all managing directors and always have been) has been searched, but I couldn't find any reliable source to verify this claim.
Also, Crytek argued ever since that anyone had been arrested or equipment had been seized.
Also, as you say yourself... the scenario seems - not only a bit - overkill and indeed it is extremely unlikely. The so called "riot police" was assigned to assist in the searching, but they're not SWAT-like special forces, they're mostly younger police people who did not yet or not not long finish their apprenticeship.