Who is GOG Owned By? A Deep Dive into the DRM-Free Game Store

As an avid PC gamer, I‘ve been building my library across various digital game platforms for years. My personal favorite is GOG, which I‘ve found to offer a standout curated catalog and true ownership of games free from DRM restrictions. But GOG remains much smaller and lesser known compared to juggernauts like Steam. This raised my curiosity – who owns GOG, and is it actually a stable and profitable company?

In this in-depth article, I‘ll share my insights on GOG‘s origins, business model, financials, and long term viability. As a data analyst and contributor at 33rdsquare, I‘ve done extensive research on GOG and the gaming market to unearth key facts and trends. Whether you‘re a fellow gamer or just GOG-curious, read on for the full story behind this beloved DRM-free platform!

GOG – A Wholly-Owned Offshoot of CD Projekt‘s Witcher Success

Let‘s start at the very beginning – GOG first launched in 2008 under the name Good Old Games. According to multiple sources including Wikipedia, it was founded by the Polish developer CD Projekt.

You likely know CD Projekt as the creators of The Witcher games and Cyberpunk 2077. With The Witcher‘s rising success through the late 2000s, CD Projekt had capital to invest in a digital distribution startup focused on their favorite classic games.

To this day, GOG remains a wholly-owned subsidiary of CD Projekt, headquartered alongside them in Warsaw, Poland. This tight relationship has shaped GOG‘s trajectory and future prospects.

In fact, Poland has one of the most vibrant game development scenes in Europe today. Alongside CD Projekt, GOG is joined by fellow Polish devs like 11 bit studios, Techland, and Bloober Team who created titles like Frostpunk, Dying Light, and Blair Witch.

With CD Projekt‘s breakout into the top tier of developers, they‘ve been able to incubate GOG without needing outside investors or acquisition. This grants GOG patience and runway to focus on its principles rather than quick profit.

Betting on DRM-Free as a Sustainable Edge

So what makes GOG stand out from the endless array of game launchers and storefronts today? In my experience, the keystone is its strict DRM-free policy for all games sold.

DRM (digital rights management) refers to various methods of controlling access to digital content through online authentication, limiting installations, mandating always-online connectivity, and more. DRM aims to prevent piracy, but also imposes restrictions on customers.

By rejecting DRM entirely, GOG treats gamers as true owners – once you buy a game, you can download, install, and play it on any device fully offline forever. No re-authenticating, no install limits, no required launchers.

According to GOG‘s website:

We believe that great DRM-free games are worth preserving and sharing with the world. This is why we provide a comparable alternative to pirated content and work closely with developers and rights holders to make classic games available again legally.

It‘s a bold strategy when the wider industry embraced DRM long ago. But GOG is banking on customers being willing to pay a little more for added freedom and ownership. Based on its recent financial turnaround, the market seems receptive.

In fact, DRM-free games aren‘t just more consumer-friendly – they may actually boost sales relative to restricted versions. A study by the Business School of the University of Notre Dame found:

The findings demonstrate that restricting access diminishes legal purchases by about 30% relative to piracy, whereas unlimited access tends to increase legal purchases by about 40%.

By tapping into this trend, GOG has smartly differentiated itself while supporting an ownership model many fans prefer.

The GOG Difference – A Curated Library with Hidden Gems

Besides DRM-free, GOG‘s other brand signature is offering a smaller, highly curated library.

Whereas Steam stocks over 50,000 games, GOG‘s catalog is under 7,000 as of 2022. But this restraint allows their team to deeply evaluate and endorse the games they sell.

Platform	Catalog Size
Steam	Over 50,000 games
GOG	Under 7,000 games

According to a quote from GOG‘s website:

We aim for quality over quantity. Each game is manually checked by the team before appearing on GOG.com, so you can be confident that all titles available are compatible with modern systems, contain any additional content they should, and are completely free of any DRM.

This results in a more selective library, but the games they do sell tend to be high quality and worth your time. I‘ve discovered many personal favorite classic games and indie gems solely thanks to GOG‘s curation.

The focus on featuring games worth playing has helped GOG cultivate a passionate user community. They have a dedicated fanbase of users who rely on GOG to surface underrated DRM-free games.

Tracking GOG‘s Financial Performance and Viability

Given the differences in GOG‘s model, this raises questions around their financial sustainability. How is GOG performing as a business?

Public earnings reports shared by parent company CD Projekt provide some insight. Here are key GOG financial data points:

• GOG offers developers the standard 70/30 revenue share split.
• They also offer an option for 60/40 split after recouping advance payment.
• In 2021, GOG posted a loss of $2.21 million according to CD Projekt.
• But GOG had a profitable Q3 2022, with $44 million revenue and $2 million EBIT.

2021 Performance	-$2.21 million loss
Q3 2022 Performance	$44 million revenue $2 million EBIT profit

The loss in 2021 was concerning, but the swing to profitability in late 2022 indicates GOG may be turning things around financially. This gives me cautious optimism for GOG‘s future prospects if these improved sales continue.

As part of a larger profitable company in CD Projekt, GOG has the runway needed to try making their DRM-free model sustainable. Personally, I hope they succeed – more healthy competition and consumer choice is good for the gaming industry.

GOG Galaxy 2.0 – Uniting Platforms and Adding Features

Besides selling standalone DRM-free games, GOG offers their own optional client called GOG Galaxy. Galaxy provides some nice additional features:

• Automatic updates for games to maintain compatibility
• Cloud save backup support – very useful!
• Ability to rollback game patches or versions
• GOG Chat for messaging friends

But perhaps most importantly, GOG Galaxy can integrate all your other gaming libraries into one unified experience. I‘m primarily a Steam user, so I love being able to see and launch all my various games from one place.

According to MakeUseOf:

You Can Now Play Epic Games and GOG Favorites on the Steam Deck.

This kind of cross-platform library management is a big advantage compared to fragmented launchers from the likes of Steam, Epic, Origin, Uplay etc. Kudos to GOG for pushing the industry forward on this front.

Lingering Concerns Around Ownership and Library Preservation

Despite GOG‘s core promise of owned games free of DRM restrictions, some concerns linger around preservation and ownership rights.

The user license agreements for games essentially establish that we are buying a license to play the game, not full ownership. If GOG went under as a business, it‘s unclear what would happen to customer access.

GOG‘s user agreement lacks specific clauses like:

• Requiring advance notice before store closure
• Guaranteeing license transfers to another service
• Commitment to take stewardship of games if needed

According to a tongue-in-cheek GOG community post:

If GOG shuts down, the super-secret DRM built into everything will activate and cause your hard drive to self destruct. So, you know, keep buying games to keep GOG in business if you value your computer.

While exaggerated, this quip speaks to genuine concerns about loss of access should disaster strike GOG as a business. Personally I see the risk as very low given GOG‘s backing by the profitable CD Projekt. But some formal contingencies could help provide peace of mind.

Controversies Around De-listed Games and Regional Restrictions

While GOG aims to preserve access to games, a few controversial cases around delisting titles still occurred:

• In 2019, GOG removed Devotion after its inclusion of a meme mocking China‘s president
• Several older games using racial stereotypes or slurs have been removed
• GOG delisted Hitman over licensing issues with IO Interactive

While understandable, this does represent some level of editorial control and gatekeeping around their catalog. No platform is completely neutral or comprehensive.

GOG also faced criticism for temporarily stopping sales to Russian territories following Russia‘s invasion of Ukraine. Some felt this betrayed GOG‘s stance on global access to games.

Per their statement:

While buying products on GOG is not possible, users from the affected territories can still log in to their accounts and keep access to purchased items.

So while controversial, previously purchased games were not impacted. This incident revealed GOG does deploy geo-blocking when needed, despite their broader rhetoric.

GOG vs Steam – Which Platform is Better for You?

Given Steam‘s utter dominance of PC gaming, how does GOG compare and when should you choose it over Steam?

Here‘s my high-level perspective on the pros and cons of each:

GOG

Pros:

• 100% DRM-free games you fully own
• Selective quality over quantity
• Great for hidden gems and classics
• Galaxy client provides nice features

Cons:

• Much smaller overall catalog
• Some concerns around ownership rights
• Less guarantee of permanence vs Steam

Steam

Pros:

• Massive catalog of new games
• Huge community features like forums
• High brand recognition and dominance
• Permanence more ensured due to scale

Cons:

• No DRM-free options
• Flooded with shovelware
• Security issues around account hacking

For me, I use both actively – GOG for its curated selection and DRM-free classics, and Steam for most major new releases. GOG is my choice when I want ownership confidence and hidden gems.

But for most gamers, Steam takes the majority share of purchases due to its sheer ubiquity. GOG has a passionate yet smaller userbase. Expanding beyond that core will require maintaining great curation and promotions to drive discovery.

The Bottom Line – GOG Offers a Unique DRM-Free Vision

At the end of the day, GOG remains a uniquely principled platform in an increasingly crowded gaming market. Backed by CD Projekt and their Witcher riches, GOG was able to incubate and grow based on a bold vision of DRM-free game ownership.

Despite past financial losses, their recent swing to profitability demonstrates GOG offers a compelling value. Combining passionate curation with liberating technology like Galaxy, they stand for putting gamers first.

While unlikely to ever rival Steam‘s scale, GOG continues to thrive by sticking to its core vision. For gamers like myself who care about ownership, it will remain a cherished destination for classics and hidden gems alike. So the next time you‘re buying a game, I suggest giving GOG a browse – you might discover your new favorite.