Thanks for the summary. So basically my impression is that GOG is profitable and doing well but most of their future success hinges on the success of Cyberpunk 2077, because it is even bigger than Witcher 3 and Witcher 3 already was bigger than everything else they did so far.

If CB2077 fails it has the potential to severely throw CDP and GOG back. The large cash reserves might mean that they may get another chance but right now it's all a gamble that CB2077 will be a huge success.
Sorry, I didn't saw your post until today. I agree. I just looked into my library and counted almost 200 games with many of them not played yet. On my wishlist are about 50 games but I don't need to buy them right now because I still need to play others. I would only buy more if GOG would get the games that I'm really interested in. Unfortunately there is the DRM problem with many of them.

If only more people would know of GOG and buy here it would increase profitability which may result in more games DRM free available which may in turn attract more games. A positive, self-enforcing reaction. However, my impression is that this is not happening. The days of waves of releases of great games on GOG seem to be very long ago by now.

CD Projekt releases its results for 2017

results PDF

GOG.com (slide 11)
- sales revenue up by 27% - 50 mio USD
- costs for materials sold only increased 22% - share of CDP games sold increased (slide 28)
- consequence: gross profit: +37% - 18.1 mio USD
- operating costs only increased by 13%
- earnings before interest and taxes (EBIT): up by 187% - 5.4 mio USD
- net profit: up 233% - 4.7 mio USD
- net profitability

GOG, Galaxy and Gwent revenue by country
- USA 29% (-3)
- Germany 14% (-2)
- UK 6% (-1)
- Poland 6% (+2)
- France 5% (0)
- Canada 4% (-1)
- Russia 4% (+1)
- Australia 4% (-1)
- Brazil 2% (?)
- Sweden 2% (0)
- Other territories 25% (+6)

CD Projekt
- 33 mio. copies of WItcher series sold in 2017 and earlier
- Witcher 3 base game sold 11 times more than Wicher 2, with the expansion 15x. That's also supported that the game sells better in the second and third year (~66% and 42% revenue compared to launch year). The Witcher 3 sold more often in 2017 than in 2016. Not sure how this aligns with slide 9 which shows many sales in 2015 (less revenue from physical sales?)
- but Witcher 3 by copies sold: Europe 44%, North America 30%, Asia 20%, Australia 4%, South America 3%
- sales revenue down by 21%
- EBIT also down by 21%
- net profit down by 20%
- net profitability stable at 43%

At the end of January, CD Projekt also released a fact sheet:
- 55% revenue in US, 5% Poland, 27% other EU states, 9% Russia and Asia, 4% others (the Americas without the USA, and Australia really that low?)
- 743 employees from 27 countries (+24%): 79% Reds, 21% Goglin

Other interesting data about CD Projekt S.A. (pdf)
- projected salary growth is 2.5% and employee turnover rate 8.2% at 31 years old for CDPR, 17% for GOG page 67) - Goglins don't last long on average.
- sum of the base salary of the board members (8 people) is ~550000 USD, their bonus in total is 8.6 mio USD.

Trivia:
- Cyberpunk 2077 on schedule and "has reached a major production milestone in late 2017"
- "By the end of 2018 we expect [GWENT] to be out of beta and its first major single-player expansion – Thronebreaker
– to have been released"
- page 17 of the management report has photos of the motion capture studio and the company gym
- page 18 has photos of the offices worldwide, the LA one looks like its from GTA: San Andreas
- 67% of employees work on development of Gwent, Cyberpunk 2077, the GOG platform or GOG Galaxy
- 15 people from the UK, 11 from the US and 10 from Canada work for GOG
- until the end of 2021, the release of another triple-A story-driven RPG is planned (in addition to Cyberpunk 2077)
- The company purchased the building next to the office for 11,111,111.00 PLN by best bid (2.6 mio. USD)

Update 2018-03-29: Video of the Q&A hasn't been posted yet. Giving up on that.

In absolute numbers this makes 156 Goglins. And still it took months to correct for the lost wishlist entry.

Thanks for the summary and all the nice numbers. Doesn't look too bad for CDP.

Q1 2018 results are now up:
https://www.cdprojekt.com/en/investors/result-center/
GOG reported revenues in the amount of 25.780 million PLN for 1st quarter 2018 vs 32 million PLN for 2017 1st quarter. Net loss was 859,000 PLN. Reasons for the decrease include the fact that Gwent revenue is now split between divisions instead of the total being reported as GOG revenue and negative exchange rates from the strengthening of the PLN versus other currencies (where GOG's revenue is mostly in other currencies, USD in particular). They also had increased costs from Gwent. Actual sales were up by about 1.226 million USD compared to the corresponding period in 2017.

2018 half 1 results are in:

CD Projekt
- share price up 62% in H1
- fonds Nationale-Nederlanden PTE and Swedbank Robur Fonder both hold ~5% of the shares
- sales revenue 168m PLN (H1 2017: 255m PLN) - no new releases
- cost of products: 44m (from 38m) - GOG sales increased, exchange rate fluctuations
- operating profit: 61m (from 143m)
- net profit: 52m (from 119m)
- current assets are down by ~5% compared to EOY 2017
- cash flow from operations: 34m
- 59.0% of sales in US, 29.4% in EU (excluding Poland), 4.2% in Poland and Asia, 2.1% in Australia, 0.8% in South America, 0.2% in Africa
- It's now regarded as a research and development center by the government (bigger tax deductions)
- New company Spokko founded (75% CDP, 25% Spokko management) with focus on a project for mobile gaming platforms.
- CDP headquarter continues to expand physically (bought another property next to it for 13m PLN)
- no board member has purchased shares this year so far. chairowman Szwarc almost sold all her shares (upcoming exit?)

GOG
- revenue: 60m (35.4% of CDP), year on year increase of 8.2%)
- operating loss: 530000 PLN
- net loss: 1.2m PLN
- GWENT revenues stabilized in Q2 2018 (sounds like they were falling before)
- standalone single-player GWENT Thronebreaker release in Q4 2018
- revenue by country in % (change to H1 2017)
USA 30 (-1)
Germany 14 (+1)
Great Britain 6 (0)
Poland 6 (0)
France 5 (+1)
Australia 4 (-1)
Canada 4 (-1)
Russia 4 (0)
Sweden 2 (0)
Netherlands 2 (?)
Austria 1 (?)
"Brasil" (3% in H1 2017) and Japan (2% in H1 2017) are now part of Other territories 22% (+1)

"This year’s [Summer] sale saw a change in format, with recommendations custom-tailored for individual users on the basis of their history of interaction with the service, alongside the most popular titles and fresh releases." Was that successful?

Doesn't look like an increase to me.

There was some kind of consolidation within CD Projekt RED structures at the end of 2017. As a result of that Gwent revenue is split and GOG receives only a smaller part. I don't really know details, I've only watched live conference.

At least the 60m is without sales of CDP products (e.g. The Witcher)

Pretty big game company. I bet they could increase revenue if they offered more crossovers or whatever you want to call them where people from other api's with games on it could redeem their games on GoG for free. Do it more often to increase the traffic coming here. That would pay off when the numbers are right. I would do DRM free GoG over Steam I just haven't had the funds recently to get games here. I'm trading bundle games and still stuck only on Steam. It's also a bit hard to buy on GoG as a US customer.

Selling costs for GOG seem a bit high: 17.150 mln pln. I wonder if that's because of fair price package/refunds and other such things?

You seem to misunderstand. The revenue didn't increase but GoG's percent of the company as a whole did. In other words, Witcher sales + Gwent dropped at a higher percent than GoG's revenues, thus GoG's revenue as a percentage of the whole increased.
Why would you think that? It includes that too as it always has (the copies sold on GoG anyway). What it might not now include is microtransactions. That might be the change that was made as GoG itself doesn't sell them.

Ok, I don't know. Page 26 says 4.7m show up twice in CDPR and GOG. For last year, that would be 70m without cross segment sales. Public beta of Gwent started in May 2017. Could public and closed beta have generated that much (and collapsed that much)?

Yeah... That 8.2% increase is about increase of "revenues from sales of products licensed from external suppliers" and had nothing to do with Gwent or Witcher. See pages 43 and 44.

If GoG's revenues don't include Witcher games, then how did their revenue drop from 96.2 million PLN to 64.6 million PLN since last year? And why else would one have to eliminate it under consolidations? They have to eliminate it because it is showing up twice (under both the GoG and CDPR columns). GoG sells the game. CDPR lists it as sales too from the ~70% they are getting paid back by GoG.

I believe it is treated like any other product. GoG has distribution rights to CDPR products. They sell the Witcher games. Then they pay the developer ~70% (or whatever the agreement is). Now think about it. Gog isn't selling the WItcher games to CDPR, they are selling them to us (we pay them the money - it doesn't go through or involve CDPR at this stage). So nothing shows up as between segments. But when they pay CDPR their ~70% cut, CDPR reports that as revenue between segments because GoG (another segment) paid them for it.

So, what is this "consolidation"? Well, ~70% of the sales price is showing up twice. GoG shows it as revenue (collected from us) and CDPR is also showing it as revenue (in the between segments column - collected from GoG). But as a company as a whole, the games are only sold once, so to be financially honest in reporting the parent's company total sales revenue (because otherwise ~70% of the price is reported twice as sales - both CDPR and GoG), they have to fix the double billing and they do so in the "consolidations" column.

Does that make sense?