so far its looking good
though its mostly thanks to the witcher 3 and its expansions that cd projekt red is able to stay afloat

"Revenue for the period was 100.9 million PLN ($25.1 million), which is down from 113.1 million PLN ($28.14 million) during the same period last year. CD Projekt posted an overall profit of 36.6 million PLN ($9.1 million), but this is a decrease of 9 percent from the 40.4 million PLN ($10.05 million) that the company recorded last year in the same quarter.

Main contributors to the company's results for the quarter were The Witcher 3 and its two expansions, Hearts of Stone and Blood and Wine. The game and its expansions saw "excellent sales," CD Projekt Red added, though it did not share any specific sales numbers."

gog is also good for keep cd projekt red in the black

"CD Projekt Red's GOG service saw its revenue rise to 23.54 million PLN ($5.85 million) compared to 20.96 million PLN ($5.2 million) during the same period last year. Profit was 298,000 PLN ($74,000), compared to 1.7 million PLN ($423,000) a year ago."

but only just about

while these are healthy numbers and certaintly good figures for a studio
this once again shows that neither gog nor cd projekt red have unlimited funds or can throw money around willy nilly

the original article can be found here http://www.gamespot.com/articles/heres-how-much-money-witcher-3-dev-made-in-the-las/1100-6445326/?utm_source=gamefaqs&utm_medium=partner&utm_content=news_module&utm_campaign=homepage

Did they explain why is their profit margin so small?
Makes me sad to see such low profit for the best on-line game store... :(

Remember that GOG did buy the rights to some games, so even assuming $100.000 per series, it would put quite a dent in their profits, and it will take some time for said games to pay for themselves.

Could have many reasons. They did bring in quite a number of new(er) games, which involves legal fees, lawyer fees, maybe even travel costs/hotel and similar.

You would be surprised how much this can drain any profit quickly.
Further I think I read somewhere that they did expend the server base a bit. The development of Galaxy.

Just a few reasons why ;)

"The increase [of operating costs] is due to expansion of the segment, with a dedicated GOG.com team formed to assist in development and support of GWENT" But no specifics were provided.

From page 5 of this presentation: https://www.cdprojekt.com/en/wp-content/uploads-en/2016/11/cd-projekt-group-results-in-3q-2016.pdf



edit, and a quote from https://www.cdprojekt.com/en/wp-content/uploads-en/2016/11/conference-call_transcript.pdf

The modest increase in operating costs is due to expansion of GOG activities, especially involvement in GWENT – a dedicated GOG team is participating in development and maintenance of the beta release, and so some of the development costs are aggregated with the GOG.com financial result. Of course this incurs operating costs which are accounted for in the profit and loss account.

its still the witcher franchise that is keeping gog and cd proket red afloat though
gog has always had rather marginal profits

And remember, when the media reports "Revenue" with regards to GoG, those numbers include the approximately 70% that goes straight to developers. Out of the 30% that is left, GoG has to pay employees, servers, and everything else.

Last years was probably inflated due to Witcher 3 sales compared to a normal year. Does seem quite low though.

I fail to see why these would have cost them money. That should only be the case if they're buying rights to something.

you mean all these talks and meetings and lawyer fees and ironing out of rights
and distribution fees and rights and so on wouldnt have cost them any money ? ;p

The costs would have been the same whether they were talking with EA or jefequeso, since the lawyers are most likely on retainer. Trips may increase said cost, but I'm not sure how often those would be.

As mentioned, same costs as normal negotiations I asume? Distribution fees and rights? I doubt those happen if they aren't exclusive distribution rights (are they?)

We're assuming a lot here. For all we know, they could be singing contracts with sizeable payments up front and penalty fees for not meeting minimal set sales. Probably not, but we don't know for sure.

More info can be found here, including a conference call transcript that was recently added:
https://www.cdprojekt.com/en/investors/result-center/
Edit: Oops, saw that this was already added.
They do talk about 'distribution licenses' acquired by GOG as part of their prepaid expenses, and that following the release of Witcher 3 they have 'far more in the works now'.
And no further mention of a AAA, day-one Galaxy-integrated release on GOG. I guess the closest such releases could be Tyranny and/or Shadow Warrior 2.