The GOG store is no longer profitable, but CD Projekt Red still feels confident in the future of their business model.
GOG is losing money, but CD Projekt has a plan. The company has been working on a new game called Cyberpunk 2077 which will be released in April 2020.
CD Projekt said on its quarterly conference call that its GOG games marketplace is losing money. It does, however, have a strategy in place to help minimize more financial losses.
A refocus is part of the strategy. GOG began as Good Old Games, a service that provided DRM-free copies of older, classic games. It evolved into a more all-purpose marketplace, comparable to Steam or the Epic Games Store, over time.
GOG will revert to its old model, according to CD Projekt CFO Piotr Nielubowicz. This entails providing a “handpicked collection of games” that adhere to the company’s “unique DRM-free ideology.”
The other component is GOG’s departure from the Gwent consortium, which spans many divisions. This implies the storefront won’t be responsible for any development expenditures and won’t be a part of the development consortium’s revenues.
It’s too early to say whether these cost-cutting efforts will be beneficial. In the most recent financial quarter, GOG witnessed a modest increase in sales, but also a net loss of $1.14 million.
Over the previous three financial quarters, the shop has lost $2.21 million. This compares to a profit of $1.37 million in the same time period in 2020.
GOG isn’t the only shop suffering from a shortage of inventory. The Epic Games Store has yet to turn a profit, and it is unlikely to do so for another three years. However, it is backed by the powerhouse that is Epic Games.
People have gotten more rooted in other stores, on the other hand. Over the previous eight years, the number of peak concurrent gamers on Steam, for example, has steadily increased. It also helps because Steam is the most popular PC gaming shop.
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“The Cyberpunk 2077 project has been a long and arduous one, but CD Projekt Red is confident that the game will be worth it in the end. The company’s latest financial report shows that GOG is losing money, but CD Projekt Red has a plan.” Reference: cyberpunk earnings.
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