GOG loses money and refocuses on “handpicked selection of games”

ByRichard C. Sloan

Nov 29, 2021

CD Projekt says its GOG games showcase will put more emphasis on offering “a selection of handpicked games” and shift some developers to other projects, following ongoing financial losses in the industry. division.

“As far as GOG is concerned, its performance presents a challenge, and we have recently taken steps to improve its financial position,” Piotr Nielubowicz, CFO of CD Projekt, told investors in a quarterly earnings conference call. . “First and foremost, we decided that GOG should focus more on its core business, which means offering a selection of handpicked games with its unique DRM-free philosophy. In accordance with this approach, there will be changes in the structure of the team.

Nielubowicz said some developers who were working on GOG’s online solutions will be transferred from the project. At the end of 2021, GOG also leaves the Gwent consortium, a transversal project linked to CD Projekt The witcher card game Gwen. This means that it will not bear any development costs nor will it share the profits of the development consortium. CD Projekt previously called Gwen “The most important project of 2017 in the GOG.com segment”.

These latest statements came after disappointing financial results for GOG. The storefront saw a slight increase in revenue but a net loss of around $ 1.14 million in the last financial quarter. Overall, it has lost about $ 2.21 million in the past three quarters, compared to a profit of $ 1.37 million for the same period in 2020. CD Projekt did not immediately respond to questions about how his new strategy might translate into changes to GOG’s functionality or catalog.

GOG was launched in 2008 as Good Old Games, a platform built around selling hard-to-find classic games without digital rights management or DRM. Since then, it has grown into a more versatile storefront selling new third-party games and CDs from internal studio Projekt Red. The Witcher 3 and Cyberpunk 2077, plus an online service called GOG Galaxy. But it has also faced apparent financial problems before, laying off 10% of its staff in 2019.

A staff member has linked previous layoffs to increased competition in PC game storefronts, which has prompted major platforms to cut commissions they take from developers. Valve’s Steam service has long dominated the video game sales market. At least one recent competitor, Epic Games Store, is not expected to make a profit until 2024. And Epic’s store is being amortized by the publisher’s hit game revenue. Fortnite and Unreal game engine. Meanwhile, CD Projekt Red’s botched 2020 launch Cyberpunk 2077 put the brakes on recent earnings – although the company says it has seen an increase in enthusiasm for the game and is “on track” to release a delayed update in early 2022.

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