Following continuous financial losses at the business, CD Projekt said its GOG games portal will focus more on presenting “a curated selection of games” and will move certain creators to other projects.
On a quarterly earnings conference, CD Projekt CFO Piotr Nielubowicz said, “Regarding GOG, its performance does offer a problem, and we’ve lately taken actions to strengthen its financial condition.” “First and foremost, we’ve determined that GOG should concentrate on its primary business activity, which is to provide a hand-picked collection of games with its distinctive DRM-free ideology. The team structure will alter in accordance with this strategy.”
Some developers who had been working on GOG’s online solutions will be transferred from the project, according to Nielubowicz. GOG will also leave the Gwent consortium, a cross-division effort tied to CD Projekt’s The Witcher card game Gwent, by the end of 2021. This implies it will not be responsible for any development expenditures or revenues generated by the development consortium. Gwent was earlier dubbed “the most significant project of 2017 in the GOG.com category” by CD Projekt.
GOG’s financial performance were unsatisfactory, prompting these recent claims. In the previous financial quarter, the shop had a small rise in income but a net loss of roughly $1.14 million. Over the last three quarters, it has lost around $2.21 million, compared to a $1.37 million profit in the same time of 2020. CD Projekt did not respond to queries regarding how its new approach would affect GOG’s features or collection right away.
GOG began as Good Old Games in 2008, a portal dedicated to selling hard-to-find vintage games without the use of digital rights management (DRM). Since then, it’s evolved into a more all-encompassing storefront that sells new third-party titles as well as internal CD Projekt Red’s The Witcher 3 and Cyberpunk 2077, as well as an online service called GOG Galaxy. However, it has already suffered significant financial difficulties, with an estimated 10% of its workforce laid off in 2019.
One employee attributed the previous layoffs to growing competition in PC gaming shops, which has prompted major platforms to decrease their developer commissions. Valve’s Steam service has long dominated the computer game distribution business. The Epic Games Store, a newer rival, isn’t anticipated to break even until 2024.
Epic’s shop is also supported by income from the publisher’s smash game Fortnite as well as the Unreal gaming engine. Meanwhile, CD Projekt Red’s recent profitability have been hampered by the bungled 2020 launch of Cyberpunk 2077, while the firm claims it has noticed fresh interest in the game and is “on track” to provide a delayed update in early 2022.
