Tuesday, January 25, 2022

GOG is losing money and refocusing on ‘handpicked selection of games’

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CD Projekt says its GOG video games storefront will put extra focus on providing “a handpicked selection of games” and switch some builders to different tasks, following ongoing monetary losses on the division.

“Regarding GOG, its performance does present a challenge, and recently we’ve taken measures to improve its financial standing,” CD Projekt CFO Piotr Nielubowicz advised traders on a quarterly earnings name. “First and foremost, we’ve decided that GOG should focus more on its core business activity, which means offering a handpicked selection of games with its unique DRM-free philosophy. In line with this approach, there will be changes in the team structure.”

Nielubowicz stated that some builders who’d been working on GOG’s on-line options can be transferred from the venture. At the top of 2021, GOG is additionally leaving the Gwent consortium, a cross-division venture associated to CD Projekt’s The Witcher card sport Gwent. This means it received’t bear any growth prices or share any income from the event consortium. CD Projekt beforehand known as Gwent “the most important project of 2017 in the GOG.com segment.”

These newest statements got here after disappointing monetary outcomes for GOG. The storefront noticed a slight enhance in income however a web loss of round $1.14 million within the final monetary quarter. Overall, it’s misplaced about $2.21 million over the previous three quarters in comparison with a $1.37 million revenue over the identical interval in 2020. CD Projekt didn’t instantly reply to questions on how its new technique would possibly translate into adjustments to GOG’s options or catalog.

GOG launched in 2008 as Good Old Games, a platform constructed round promoting hard-to-find traditional video games with out digital rights administration or DRM. Since then, it’s expanded right into a extra all-purpose storefront promoting new third-party video games and inner studio CD Projekt Red’s The Witcher 3 and Cyberpunk 2077, plus an internet service known as GOG Galaxy. But it’s additionally confronted obvious monetary issues earlier than, shedding a reported 10 p.c of its employees in 2019.

One employees member tied the sooner layoffs to elevated competitors in PC gaming storefronts, which has pushed main platforms to decrease the fee they take from builders. Valve’s Steam service has lengthy dominated the marketplace for pc sport gross sales. At least one current competitor, the Epic Games Store, isn’t anticipated to show a revenue till 2024. And Epic’s retailer is cushioned by income from the writer’s blockbuster sport Fortnite and Unreal sport engine. Meanwhile, CD Projekt Red’s botched 2020 launch of Cyberpunk 2077 has put a damper on its current earnings — though the corporate says it has seen renewed enthusiasm for the sport and is “on track” to launch a delayed replace in early 2022.

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