GOG Lays Off 10 Percent Of Its Staff

Well, that was unexpected.

GOG have just let go of at least a dozen staff members. That may not sound like much compared to the 800 or so that were blown out by Activision Blizzard, but really, they’re close percentage wise (this is 10% compared to Acti-Blizz’s 8%).

How could this be? Isn’t GOG the darling of PC gamers everywhere? Doesn’t CD Projekt practically print their own money?

Apparently not. Kotaku’s Jason Schreier was told by someone on the inside that the company’s revenue wasn’t able to keep up with growth, so they were dangerously close to being in the red over the last few months. As a result, a tough financial decision had to be made and here we are.

It’s also come to light that GOG’s Fair Price Package program is coming to a close at the end of March. For those out of the loop, this package:

“…is a form of store credit, which we give back when you buy a regionally priced game that is more expensive in your region, compared to most other regions.

“So, if you buy a game for 40 Euro (so roughly 45 USD), but the same game costs 40 USD in the United States and most other regions, we give you the 4 USD difference back, in store credit.”

It’s great that GOG were making up the difference themselves, but now that they’re giving developers a larger cut of each sale, they needed to ensure they could still turn a profit. Something had to give.  

I hope more information comes to light, because we know next to nothing. Only one source that we know of has stepped forward with nitty gritty details. That source painted a doom and gloom scenario, but I’m not entirely sold on it, not yet. I want to see more ‘confirmation’ of the company being in dire straits, because they could lay people off for a number of reasons. Maybe they’re changing direction? With the way the market is changing, it’s a possibility. Despite the 8% cut in staff, the company still has 20 open positions. Why?

Anyway, the knee-jerk reaction online is that this was inevitable. There are people who believe it’s stupid to sell DRM-free games, because all it takes is a single person to add those game files to a torrent and then nobody will be incentivized to pay for it. I believe this has to impact sales at least a little, but studies have shown that piracy doesn’t really hurt a studio’s bottom line. Basically, the people who pirate a game were never going to buy it in the first place, so no harm, no foul. Again, I take issue with this, but I’m not going to argue against research.

GOG believe that best way to combat piracy is by earning good will. The company once told Fraghero.com:

“… our closest digital competitor is piracy. And they’re even bigger than Steam.

“We’re not necessarily a competitor for Steam. We’re an alternative. We provide things they don’t – namely, a DRM-free experience, flat pricing world-wide, and goodies and attention to our games and gamers. They provide things that we don’t. Many of the games that we sell are available on Steam as well, and the fact that we do as well as we have in the last year proves that some people find what we’re doing a valuable alternative to Steam.” “So with that said, the fact that we’ve taken the no-DRM approach makes a lot of sense if you think about who it is that we consider as the largest ‘digital distributor’ in the market: pirates. We’ve deliberately designed our signup, purchase, and download process to be as quick and painless as possible, because if you compare the process of buying a game with DRM to downloading the game from a torrent, the stark difference in simplicity and user-friendliness is boggling,” Trevor Longino, PR Head of GOG.com (at the time) explained.

And this wasn’t just GOG slinging bullshit, either. When CD Projekt RED released The Witcher 3, the company put their money where their mouth is, and it paid off handsomely .

“We released [The Witcher 3] without any copy protection. So, on day one, you could download the game from GOG, and give it to a friend (enemy as well)… and still we sold near to 10 million units across all 3 platforms.”

“We don’t like when people steal our product, but we are not going to chase them and put them in prison. But we’ll think hard what to make to convince them. And uh, convince them in a positive way, so that they’ll buy the product next time, they’ll be happy with our game, and they’ll tell their friends not to pirate it.” -Marcin Iwinski (2016, per Kotaku)

So if piracy isn’t impacting their bottom line, why is this company letting go of people and ending one of the greatest good will assets they’ve had (the Fair Price Package program)?

Well, the industry is changing.

While selling DRM-free games is awesome, that ideology only serves a niche market. People are content using Steam because it hosts virtually everything and it’s where everyone has always bought their games from. Sure, it’s ideal to actually own the products you spend money on, but GOG isn’t an attractive option. That may sound like blasphemy to some, but it is what it is.

Downloading installers and storing them on a hard drive is a tough sell these days. Your personal library in Steam allows you to download and uninstall games whenever you want and will store your save files in the cloud. Redownloading a game means you won’t start over from scratch. Yes, you can hold on to your save files in a folder on the PC, but there’s something to be said about convenience. “But managing your files is as simple as clicking and dragging,” you might say, but keep in mind that the average consumer merely wants a ‘plug and play’ experience. If you just go with individual installer packages for each game, you won’t get that. You can rectify the problem by using GOG’s launcher, but if you’re going to do that, then again, you already have Steam and probably want to keep your library there.

Steam also has an achievements system and automatic updates. GOG’s launcher incorporates similar features, but there’s other reasons why people are dissuaded from buying stuff through their store.

GOG doesn’t offer all the games that people want. If you’re looking for a brand spankin’ new AAA title, chances are that GOG won’t have it. Publishers want to protect their investments, so they very much want DRM attached to their games. For the games GOG does have, post-launch support does have a tendency to lack. Game features have had, at times, to be removed from the GOG version (when Steamworks is involved, sometimes publishers don’t want to waste resources for parity on other digital platforms). There’s nothing more frustrating than seeing patches get released on platforms like Steam, only to wonder when, if ever, you’ll see it show up on GOG. That’s more on the developer/publisher, but still, it’s something consumers have to take into consideration.

That’s not to say that everything about GOG is a horror show, because things can also work the other way. There are times where games on GOG have included patches, even ones produced my members of the gaming community, in order to sell the best possible product. Steam, on the other hand, requires you to find and install said fixes on your own.

Still, all things considered, when compared to Steam, GOG isn’t what most people are looking for. That, ultimately, is the crux of their problem.

And now that they’ve dropped the Fair Price Package plan, even less people will be inclined to go there. Why’d they do this in the first place? Because they have little choice with the competition out there. The Epic Games Store has made a decent splash by promising developers a larger percentage of game sales than Steam will provide. GOG probably felt they had little choice but to head down the same path, and it’s going to hurt them.

I wouldn’t freak out and start downloading everything you’ve purchased from GOG anytime soon, but it’ll be interesting to see how the company plans to remain relevant moving forward. DRM-free gaming is an awesome thing to have in the marketplace, but again, it’s rather niche, and with digital platforms being easier than ever to use (like Steam), the whole ‘it’s easier than pirating’ shtick isn’t unique.

The only thing GOG really has going for it in 2019, is that you can buy many of yesteryear’s best games, and with a launcher that ensures it’ll run on your modern operating system without (much) issue… but will that be enough? Only time will tell.

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One response to “GOG Lays Off 10 Percent Of Its Staff

  1. The best thing for GOG.com to happen would be one of the other relevant players in the market closing down shop. It’s probably not going to be Steam anytime soon, but maybe one of the mid-sized ones will go bust. Because the only reason a bigger audience isn’t straight out *demanding* their games to be DRM-free is because they’re unaware of the consequences of DRM for them, or they don’t really consider the possibility.

    But it’s not just a very real possibility, it’s an inevitability. It’s happened to many digital download stores selling music and movies. Downloading movies and TV shows seems to be a niche thing these days compared to streaming, and collectors prefer physical releases anyway for the better quality. But music download stores have largely dropped DRM, and maybe one reason for that is store closures like MSN Music that made people lose their collections.

    Some might remember the “casual games” download store Reflexive Arcade. In 2010, Reflexive decided they will no longer sell third-party games, and close down their store, which was one of the biggest at the time. It was the Big Fish of its day, selling well over a thousand games. Customers were informed that they should re-install and activate all of their games, because the activation servers would be shut down within a few months. And of course, since activation is tied to a system configuration hash, it was still only a short-term extension. Games would stop working whenever a customer upgraded their computer, or maybe just installed a driver update.

    Some people were understandably pissed off, having invested hundreds or thousands of dollars into a collection of games they thought were theirs to keep. And now they were being informed that the entire collection would just disappear with no recourse and no replacement. But of course, all of this was covered by the Terms of the store that they had always agreed on.

    That people still even consider the option of “buying” games at a store like Steam, to me, is just evidence that this sort of thing hasn’t happened often enough in games yet. Maybe Reflexive Arcade was too long ago, maybe it was also too far away from the “core PC gamer” market. I don’t know if I’ll live to see the day of Steam closing down, but it would be very interesting to see the reactions to that.

    On the topic of the problems of DRM, many Steam users still bring up this myth of Gabe Newell saying that they would release a DRM removal patch if Steam was ever being shut down. That statement was made back when Steam only sold Valve’s own games, though, and still bringing it up stems from misunderstanding the legal and technical implications of DRM. Valve neither have the legal right, nor the technical means, to unprotect binaries from other developers.

    I don’t boycott Steam, or similar stores, and I have a pretty sizable collection of games on there as well (1100+, in fact). But I always made my purchase decisions with the knowledge that it’s a temporary rental, that could disappear at any moment. If the deal still sounds good then, go for it. A quick indie game for $3 that I’m unlikely to want to play again in 10 years will be fine in that calculation. A major studio title for $80? Not so much. If I’ll have to wait five years for it to show up on a DRM-free service, I will. And if it won’t – there’s plenty of other games by developers and publishers who respect me as a paying customer, so I’d rather support them.

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