They got guts.
While CD PROJEKT as a whole continues to make money, they do have one branch that’s not been doing too good. That would be GOG, which has been underperforming, to the tune of 4.8 million PLN (about $1.15 million) Q3 2021 and 9.2 million PLN (about $2.2 million) over the earlier 9 months of the year. And so, CD PROJEKT decided that some changes needed to be made.
notably, however, none of those changes are related to their stance on DRM. Per the transcript of a recent investors call:
Regarding GOG – its performance does present a challenge and recently we’ve taken measures to
Piotr Nielubowicz, CFO, CD PROJEKT
improve its financial standing. 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 – some GOG developers who have already been working on online solutions used mainly by the studio will transfer
to CD PROJEKT RED.
This is important, as back in September, Hitman Game of the Year Edition was released on GOG. The problem was that the game’s online requirements were seen by a number of customers to not be in line with that “no DRM” policy. GOG, in the wake of the backlash, removed the game from sale and apologized for the mishap.
GOG was originally a platform devoted to making old games run well on modern hardware. Hence the name: Good Old Games. Which is what’s probably, in part, being referred to as its “core business activity”. While Steam, in turn, also has many old games, they’re essentially sold as is, putting the effort of getting them to run on the end user. That said, there’s no doubt that the emergence of Epic Games Store, combined with the overall dominance of Steam, has likely put a squeeze on GOG as a whole.
Aside from such troubles, however, much of the hemorrhaging seems to be due to a number of integrated features in the platform. Gwent, for example, has its consortium run through GOG. As the consortium is a net loss for the platform, it’ll be removed to the domain of CD PROJEKT RED; which means that, while it’ll no longer deal with the losses, it also won’t get a share of the revenues, not like that piece of the pie was seemingly large enough to justify continuing on with it. Nielubowicz mentions other changes aside, but that was the one explicitly spelled out to happen, like with the move of CD PROJEKT online services from GOG to CD PROJEKT RED .
Notably, however, none of these changes should affect GOG’s sales figures; they’re merely rearranging things such that the service isn’t overburdened; and perhaps, can even thrive. As he states later in the call:
…the restructuring of GOG is rather to allow the team to focus on its core business, so GWENT
Piotr Nielubowicz, CFO, CD PROJEKT
operations will no longer be co-hosted by the GOG team; the entire operation will shift to CD PROJEKT
RED. We have also decided to move some processes related to online features used mainly by CD
PROJEKT RED directly to CD PROJEKT RED, and at the same time we reorganize Company operations
internally as far as the back office of GOG is concerned. So, this should not have any direct influence
on GOG sales of our own or external products.
Source: PC Gamer
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