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General discussionWhere do you think all of GOG's resources go?(53 posts)(53 posts)
(53 posts)
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This is my favourite topic
Posted August 02, 2021
Does this mean that we should start buying Gog stock or something?
Posted August 02, 2021
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MeowCanuck: Technically correct, but 'breaking slightly above even' is a more accurate description than "profitable" when talking to anyone. For example, in Feb 2019, GOG laid off a dozen staff after the realized they made 0.021% annual net profit after taxes in 2018 (30k PLN).
That's true, there were some layoffs back then, but we have to remember that GOG was still hiring even in that period of time. So technically the layoffs were a little lower than it might seem in the first place. We'll see how the yearly results for 2021 will look like. This might tell us a lot how the situation looks like further from the release of CP2077.
Posted August 02, 2021
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Sarafan: That's true, there were some layoffs back then, but we have to remember that GOG was still hiring even in that period of time. So technically the layoffs were a little lower than it might seem in the first place. We'll see how the yearly results for 2021 will look like. This might tell us a lot how the situation looks like further from the release of CP2077.
They had a net loss of 17 people between 2018 and 2019. Doesn't say how many contractors were displaced there for 2017 and 2018 numbers.

---

GOG employees:
- 2017: 155
- 2018: 189
- 2019: 172

2018 board report (p.16)
2019 board report (p.20)
Posted August 02, 2021
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Zrevnur: 2020 was only profitable due to Cyberpunk
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Sarafan: That's not fully correct. Every year in GOG's history was profitable. The results differ according to year, but they never went to a loss in the yearly perspective.
Look at page 31 of https://www.cdprojekt.com/en/wp-content/uploads-en/2021/04/consolidated-financial-statement-of-the-cd-projekt-group-for-2020.pdf
If you remove CP2077 (more than 40% of sales IIRC) you end up with a loss.
Posted August 03, 2021
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Crosmando: GOG or CDP? Because I doubt GOG is very profitable.
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Sarafan: GOG alone made a record profit in 2020 (around 20,5 million PLN, that gives us around 5,2 million USD). What more there wasn't a single year in history of the company with a loss in the financial results. So GOG is profitable.
At least on paper... Ever try to math if GOG would have been profitable with an 11% share on CDPR games? Because if CDPR would sell on Epic they would get 89% of it instead of the 70% they (formally) get for selling on GOG. Or rephrasing: I dont think its properly fair to use 30% of CDPR games for GOG. The fair share (for determining GOG profitability) should be lower as long as they (could) sell some of their games on Epic with 11% Epic share. But OTOH I am not sure how GOG doing stuff for CDPR games is factored into the statements so the whole question about trying to separate GOG profit from CDP profit may be moot anyway.

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Sarafan: It has however quite high operating costs, a something we tried to figure out on the Polish forums some time ago. It's possible that the servers eat a large portion of the sales revenues (which almost constantly grow year to year, a very good sign).
Which 'operating costs' are you referring to?

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Sarafan: Additionally I have suspicions that GOG might be paying some of the publishers to be able to sell their games.
There is a remark in at least one of the statements implying that GOG has in the past at least once guaranteed sales to a publisher and implying that those guarantees have at the respective time not been met. So at least implicitely this is so. (*)

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Sarafan: The main question is whether those 20 million PLN will be invested in the future of the platform or rather spent on something else. Anyway, right now GOG is in a good condition (despite the loss in the first quarter of 2021).
What makes you think that GOG is in a "good condition"?


(*) Edit: See page 24 on https://www.cdprojekt.com/en/wp-content/uploads-en/2021/04/consolidated-financial-statement-of-the-cd-projekt-group-for-2020.pdf This reads like its a frequent thing though:

In the GOG.com segment GOG sp. z o.o. purchases distribution licenses, which are initially regarded as prepaid expenses. This initial recognition applies to the so-called minimum guarantees: payments contractually remitted to copyright holders upon conclusion of a contract. Minimum guarantees are aggregated with cost of goods sold following commencement of sales; thus, costs related to minimum guarantees correlate with sales revenues.
Post edited August 03, 2021 by Zrevnur
Posted August 03, 2021
just remember to back up your games in case
Posted August 03, 2021
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Zrevnur: According to https://www.cdprojekt.com/en/wp-content/uploads-en/2016/04/strategy-en-v2.pdf (and other sources) one of the main purposes of GOG is to support CDPR games:

Technological support for new CD PROJEKT RED development projects, including customized solutions for
multiplayer gaming and other online features.
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Zrevnur: As CDPR is planning lotsa "online" stuff for their future (and possibly also existing - especially CP2077) games they will likely use Galaxy for that.
Yuck!! Why can't they keep the DRMed stuff on mobile, Scheme, or their own site? It doesn't belong on the DRM-free store and is going to erode their identity in the long term, meaning no one will have any reason to buy here versus the bigger DRM stores. I don't think there is much "possibly" about Cyberpunk either, considering the past quote; something to the effect that Cyberpunk upcoming multiplayer will "naturally" have microtransactions. The way forward is to embrace the DRM-free niche and find a way to make it grow. Online features and "the mother of all clients" is not the way to do that.
Posted August 03, 2021
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Crosmando: GOG or CDP? Because I doubt GOG is very profitable.
Most CDP profits are from CDPR. GOG profits were very small in comparison. GOG also made losses in Q1 2021 due to high costs (without the CP2077 effect of the previous quarter to compensate).
GOG also has the problem that if market pressure (in the market of game sellers like Steam, Epic, Microsoft, Apple, ..., GOG, ... - not the end customer market) increases for reducing the 30% to significantly less(*): Can GOG handle that? The charts shown in https://www.gog.com/forum/general/where_do_you_think_all_of_gogs_resources_go/post18 dont look like that to me.

(*) See for example Epic with their 11% and the complaints/lawsuits against Apple and Google for their 30%(?) monopoly.
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Community
General discussionWhere do you think all of GOG's resources go?(53 posts)(53 posts)
(53 posts)