Amid a month full of mass layoffs across the video game industry, the digital store GOG quietly let go of what it says was a dozen staff last week. GOG, which is owned by The Witcher 3 developer CD Projekt Red, did not say why the layoffs happened, but one laid-off staffer tells Kotaku that the store has been in financial trouble.
In an official statement to Kotaku this afternoon, a representative for GOG confirmed the layoffs but did not offer much more clarification. “Letting people go is never easy,” they said. “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.”
One person who was laid off from GOG last week offered a different perspective, saying that laid-off staff were told that this was a move made by a company in dire straits. That person estimated that the layoffs had hit 10% of GOG’s staff.
“We were told it’s a financial decision,” that person told me 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.”
The Epic Store, which launched in December, offers an 88 per cent cut of revenues to developers, contrary to the 70 per cent cut that was previously standard on stores like Steam and GOG — a move that will likely have a drastic impact on the entire PC landscape.
This news comes during a rocky time for the video game industry. Earlier this month, Activision Blizzard laid off 800 people, and the studio ArenaNet informed employees last week that it would enact mass layoffs, with those employees learning their fates today.
CD Projekt Red’s latest game, Gwent has been a financial disappointment, according to two people who work for the studio. Last fall, the company pointed to GOG’s small reach as one of the reasons for the game’s lack of success, quickly releasing the Thronebreaker campaign on Steam after at first declaring that it would be a GOG exclusive.