Further notes:

CDPR:
- development expenditures: 242m (143m)
- Witcher 3: Wild Hunt editions sold in 2018 only slightly down compared to 2017 (but of course for less money per game)
- new company CD Projekt Red Store for selling merchandise and licensing of CDPR games.
- future plan is to have franchises: The Witcher and Cyberpunk

GOG:
- sales stagnated with CDPR sales on GOG excluded: 135m PLN (133m PLN)
- changes in stores for distributing video games not mentioned under external factors which might affect growth

staff:
CDPR: 698 (588) 65% developers, 24% women, most employees in their thirties, most others in their twenties
GOG: 189 (155)
turnover: 13% (14%)
employees can start their work between 8am and 10am (not earlier?)
The share entitlement program requires the accumulated net profit for 2016-2019 to be 625.7m PLN or higher - up to 2018, it was 560m - save to assume they will hit the target.

CDPR seems to be doing fine.

GOG seems to stagnate and not making any money at all, but also not loosing them money.

Doesn't sound too good for GOG. Investors typically want to see a return for their invested money.

Under these circumstances one could imagine CDPR giving up GOG for good at some point in the future.

If I understand the article correctly, Oleg 'w0rma' Klapovsky will be stepping down from the CD Projekt management board to be more fully involved as a board member of GOG on upcoming projects:
https://www.wirtualnemedia.pl/artykul/cd-projekt-zarzad-oleg-klapovskiy-odchodzi-skupi-sia-na-gog-com

Guess the do not give up GOG and they got plans.

Steam has 'won' the PC game space, and they have built systems into the Steam package to ensure it stays that way. You just have to accept that (as a business and user to some extent).

Trying to out-compete Steam is just a waste of resources at this point, and even pots-of-money Epic are going to find it tough going.

That has to be something the folk at GOG are aware of and hopefully take on board.

So what you do is focus on what you can improve, like website usability and stickiness, ensuring a good flow of new titles (as 'good' games as your metric for that can manage) and building that customer relationship.

If you can't do that you will indeed continue to struggle.

I think GOG is a strategic asset for CDP. It keeps them independent of third-party stores and publishers. They will of course sell CDPR's games on other stores too and use other publishers for distributing the physical editions. But with GOG in place they can't be coerced into abusive deals.

Also GOG is the provider for all the internet structure for ie. Gwent, even if the game is by sister company CDPR. So here again they are independent of third-party companies, from the view of CDP it's all "in-house".

I wonder if there are more details about these in-built systems available? I don't think Steam has invented something like mind control or similar. What is the special technology that Steam has that nobody else has? I just thought it's their sheer size and market domination.

True, but they could drastically cut down, throw out all third party games and still be independent of any third-party companies. Independence is nice, but if you start loosing money with it, it will become a problem.

See: https://partner.steamgames.com/

It's not so much that others can't build what Steam has, it's that pretty much nobody has and no developer really wants to spend the time doing so when Steam already offers what they need. It took Steam years to get where it is today, and it's hard for any other store trying to compete to match that. If you are a developer on Steam all you have to do is "hook" into their API which offers a lot of different features that support game development.

This is why for the longest time going from Steam to GOG was problematic, because GOG had nothing comparable which meant as a developer you had to cut features or design them yourself to support the GOG version. With Galaxy GOG has managed to get some of those same features, but it's nowhere near the level of Steam.

And even then for a lot developers / publishers, you still have a lof of work even with the API's offered on GOG because you have to replace Steamworks with Galaxy's development kit, and for GOG's smaller userbase a lot of devs / publishers probably don't find it worth the effort.

A lot of devs are simply ingrained in Steam's ecosystem and the sheer size of Steam's userbase, and that's likley not going to change without some radical ways of competeing (like Epic is doing now).

Knowing your user base helps too.

2019 Q1 Results are up:
https://www.cdprojekt.com/en/investors/result-center/

GOG has posted their best yet 1st quarter results, but posted a net loss as a unit this quarter, but total net profits for the group are still over 17 million zloty.
More significantly, CDP will be holding investor meetings and a (non-deal) roadshow in June, possible IPO on the US stock market coming up?

What's interesting is that gog had a gross profit from sales of over 9 mil zloty, but then the huge selling costs wiped it out. I wonder if those selling costs were the fair price package and the reason for it to be discontinued.
Ah no, further down they write this:

[i]The Cost of products and services sold which was not subject to disaggregation for the GOG.com segment in the Q1 2018 financial
statement mostly concerns depreciation of past development expenditures associated with GWENT and Thronebreaker.
Selling costs increased by 991 thousand PLN compared to the reference period primarily due to costs related to GWENT, including its
upkeep, further development and promotional activities. Since the full official release of GWENT which took place in October 2018 the
Group no longer capitalizes its development expenditures while further costs incurred by its development team are now aggregated
with Selling costs as the costs of upkeep and development (this includes expenses related to preparing a mobile edition of GWENT).[/i]

That might explain the overall loss, but what concerns me more is that their gross profit % (gross profit as a percentage of sales) is way down on last year. If I were their auditor I'd want to look into that, as it suggests that cost of sales is increasing at a much higher rate than revenue. I wonder what the reason for that could be?

Your guess is as good as mine. Galaxy? Higher cut to publishers?

Sales revenue:
GOG: 34m PLN (26m in 2018Q1)
CDPR: 50m PLN (52m in 2018Q1)

GOG:
Cost of products, goods and materials sold: 24.5m (16.4m)
"The Cost of products and services sold which was not subject to disaggregation for the GOG.com segment in the Q1 2018 financial statement mostly concerns depreciation of past development expenditures associated with GWENT and Thronebreaker"
Selling costs: 9.5m (8.5m)
Net loss: 1.5m (0.9m)

CDPR:
Sales by region:
North America: 57.9% (54.6%)
Europe excluding Poland: 28.6% (31.3%)
Asia: 6.3% (5.7%)
Poland: 4.5% (5.4%)
Australia: 1.8% (1.9%)
South America: 0.8% (0.9%)
Africa:0.2% (0.3%)

"On 4 April 2019 Mr. Oleg Klapovskiy tendered his resignation from the Management Board of the Company, effective on the date of the nearest General Meeting. The stated reason behind the resignation was the need for full involvement in the affairs of a subsidiary Company – GOG sp. z o.o. – including further expansion of the GOG.com platform and work on new projects which will affect the operation of the online store and the GOG.com platform as a whole"

About the road show: it's a non deal one, sounds like they want to keep investors up to date interested. Who knows if they want to raise money later for acquisitions.

So gog had more sales than the year before but the loss increases respect 2018 for the invest in Galaxy 2.0 and GWENT. It should be frustrating for them not obtain profit in Q1. Especting a strong sales in summer promo for the better of GOG and CD Projekt, and for all.