CD Projekt loses over £800,000 thanks to GOG

GOG is getting old (pic: CD Projekt)

GOG’s net profits are down compared to last year, prompting CD Projekt to start implementing some changes.

CD Projekt recently shared its financial results for the third quarter of the fiscal year. Compared to 2020, total revenues had gone up by 38%, to over 144 million złoty (just over £26 million). However, total net profits for the company have gone down by 30% to about 16.3 million złoty (nearly £3 million), and it seems GOG is the main culprit behind these losses.

As a reminder, GOG is CD Projekt’s own online video game storefront, similar to the likes of Steam and the Epic Games Store. For whatever reason, it simply isn’t turning a profit, with CD Projekt reporting a loss of about 4.75 million złoty (over £867,000).

To rectify this, CD Projekt has laid out some changes it’s going to make. In an earnings call with investors (as transcribed by The Verge), chief financial officer Piotr Nielubowicz said ‘Regarding GOG, its performance does present a challenge, and recently we’ve taken measures to 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.’

This was initially GOG’s unique selling point, as it focused on curating older games that were difficult to find and play. Over time, it gradually morphed into a more traditional storefront where you can purchase first and third party games. It also offers an online service called GOG Galaxy.

What possibly hasn’t helped CD Projekt is the lack of new releases this year. Aside from augmented reality mobile game The Witcher: Monster Slayer, CD Projekt hasn’t launched any major games in 2021.

Most of its time has been spent dealing with the fallout of Cyberpunk 2077’s launch last December and releasing patches to fix the numerous bugs and glitches that plagued it.

Dedicated PlayStation 5 and Xbox Series X/S versions of Cyberpunk 2077 and The Witcher 3 were meant to have launched this year as well and would have likely turned a profit for CD Projekt, even if they wouldn’t have been sold on GOG.

Unfortunately, both of them have been delayed to 2022. As it stands, Cyberpunk 2077 won’t release until the first quarter (January to March) with The Witcher 3 to follow in the second quarter (April to June).

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