Facing Financial Pressures, GOG Quietly Lays Off At Least A Dozen Staff

Photo: GOG

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.

EA's Australian Studio Hit By Massive Layoffs

Following the hundreds of job losses at Activision Blizzard and the start of redundancies at Guild Wars developer ArenaNet, EA has begun a massive round of layoffs at its development studio in Melbourne.

Read more

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.


Comments

    This doesn't sound positive. Old games are a niche market and maybe GOG isnt attracting enough newer titles to keep it afloat. Dark days indeed.

      They don't just sell old games tho. They have plenty of new games, most of them indi games, but also any game CDPR brings out will be on there too, and really, that's where you should be buying them.

        That's probably why I said isn't attracting enough newer titles.

        I know they have titles other than old games - but so does Steam and people are fanatically tied to Steam and preference that platform, even if GOG does some things better.

          And the games on GOG are often available via Steam as well. And lots of people are lazy and just buy them through Steam without looking at other storefronts.

          On a different note, I wonder whether the "they're in financial trouble" is just sour grapes from disgruntled ex-employees? I'd also expect them to be looking at their release schedule (Cyberpunk 2077) and expecting a huge influx of cash when that releases. So I don't think they're as badly off as people might claim.

      What it establishes is that DRM-free is also a niche market.

    GOG probably needs to revisit its DRM position on new games so it can start attracting new release titles.

      Possibly, although their DRM-free stance is kind of their point of difference. If a new game on GOG is going to have DRM, there's not really much point buying it there instead of on Steam or Epic or whatever. Perhaps the compromise might be new games having DRM that would be removed after a fixed period of time (eg 1 year). I'm not sure how the actual practicalities of removing DRM is, though ie if it's just flipping a switch, or would it require the user to delete the game and download the whole thing again etc.

      I hope they sort things out, though - I love GOG, it's pretty much the only PC store that I use, mainly due to my ancient PC.

        From memory other games have just patched DRM out when its been removed in the past. There are a range of games that took Denuvo off after launch for example. CDPR might have done it themselves back in the day with Witcher 1, which I think originally had DRM due to their arrangement with Atari.

        As for putting DRM now, I'm with you. That's their point of difference, and it always has been.

          I remember buying Witcher 1 without DRM, but I can't say whether it was in there originally since I got the GotY edition. I know they're been anti-DRM for a long time.

            Found a solid article on it from a few years back. Worth a read:

            https://www.giantbomb.com/articles/cd-projekt-red-waves-goodbye-to-drm/1100-4783/

            I remember it mostly because of a big stink at the time, just couldnt remember what it was until I found that article. It was because they were tracking a torrent, chased people, then realised they were going about things the wrong way.

            Their stance wasnt so much anti-DRM as anti-piracy, but they found that DRM was handicapping the game to the point the pirated copies were better versions that ran faster.

            Witcher 1 was definitely because of Atari, Witcher 2 had DRM as well, then was removed via patch because of the above.

            FYI, google 'witcher 1 drm' to find that article.

        GOG is the only PC store I use as well, purely because of their stance on DRM. I refuse to buy anything on Steam - or even use Steam at all unless I absolutely have to - for that very reason.

        I would argue they could continue to maintain a 'after x years or at vendor discretion' would do the job without getting too far away from the core business.

      No, no they don't. If they start selling DRM versions then they have no notable advantage over Steam (and other stores). I for one buy GOG releases even if they're more expensive because they don't have DRM. If they backflip and introduce DRM then I'll just go back to Steam because I'd rather suffer through only one annoying installer than two (or three, or four...)

        Note I said new games, not all games. If new games had a DRM window, they'd at least be likely able to sell the game. Have it tagged on launch that they will remove the DRM in x years or something.

          See that would be ok, but it also causes a problem. If a game says "DRM will be removed in 12 months" then I for one, won't buy it until that 12 months is up. At which point they've lost the "cream". ie: the most profit is early when it's first released and they're making more money.

          I don't know what sort of percentage of people would be willing to hold off for 12 months, but it could be a detriment to profits.

            Meh, if I knew the DRM was coming off in a year or two, I'd still buy it - and I have about 500 games in my GOG library. Diehard drm-ista's arent going to buy it away (its not on GOG at all, or it was on GOG with DRM), but giving those who prefer GOG the chance to buy rather than defaulting to steam would help IMO.

    Impossible. CDPR is the messiah of developers. They can do no wrong. Praise Geraldo!

    This is what happens when you don't do microtransactions. Sad.

    That office looks extremely flashy. Probably not part of the problem tho.

    If even GoG is suffering serious financial pressures and having to lay people off, I think we can safely say that the second Great Crash truly is upon us. It's going to be smaller scale than the first one (which completely collapsed the video game industry and destroyed every console, making room for Nintendo) but it's still going to change the landscape of the industry.

    Bit of a kick in the pants to people being laid off that they're still recruiting for new positions.

Join the discussion!

Trending Stories Right Now