As reported by Kotaku, digital distribution platform GOG "quietly let go" about a dozen employees recently. A GOG representative confirmed the layoffs with a prepared statement:
Letting people go is never easy. We have been rearranging certain teams since October 2018, effecting in closing around a dozen of positions last week. At the same time, since the process started we have welcomed nearly twice as many new team members, and currently hold 20 open positions.Kotaku also included a statement from an undisclosed source, one of the laid-off staff, who claims that GOG is in financial dire straits. This person estimates that the layoffs made up about 10% of the company's staff.
“We were told it’s a financial decision,” that person told [Jason Schreier] in an online message. “GOG’s revenue couldn’t keep up with growth, the fact that we’re dangerously close to being in the red has come up in the past few months, and the market’s move towards higher [developer] revenue shares has, or will, affect the bottom line as well. I mean, it’s just an odd situation, like things got really desperate really fast. I know that February was a really bad month, but January on the other hand was excellent. We were in the middle of a general restructuring, moving some teams around, not unprecedented. But layoffs that big have never happened before.”As a company, GOG is part of CD Projekt S.A. group, the parent company of developer CD Projekt RED, the studio behind RPG trilogy The Witcher, CCG Gwent, and more recently CCG adventure Thronebreaker: The Witcher Tales, as spin-off titles from The Witcher franchise. Thronebreaker was originally released as a GOG exclusive, which resulted in poor sales.
“The game appeared on GOG first for fairly straightforward reasons,” CEO Adam Kiciński said in the Q3 2018 financial report. “GOG is our priority platform and we wanted to release the game there first to gamers who support us there; however the reach of GOG is incomparably smaller than that of Steam. We know that there’s a large Witcher fan community on Steam and that’s why we also released the game there. [...] While I do not want to go into details, we are aware of our options and a Steam release had always been considered.”According to a presentation for the Q3 2018 financial report, GOG had a demonstrated negative result in that quarter:
Concerning the negative result reported by GOG, it is mostly related to GOG’s participation in the GWENT development consortium. In the course of our work on the Homecoming update GWENT generated lower revenues, which negatively impacted the results of the segment and of the Group.No doubt the current digital distribution wars must also play a part in the situation with increased competition, but there are other factors, and it remains to be seen how this impacts parent company CD Projekt.
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