Even if I trusted the current leadership not to shut down GoG, I can’t imagine future Microsoft leadership keeping it around. CDPR’s fiscals show that in 2021 (a boom year for gaming) they turned a loss on operating GoG. GoG’s revenue growth hasn’t been spectacular while Steam has set records year after year. Market share is unknown but definitely very low, single digit percentages.
The two selling points for GoG are:
Old games that nobody else cared enough about to list or make work properly on modern systems.
DRM free gaming and offline backups for your games.
GoG has announced they’re refocusing just on core retro stuff again because their push to become a viable AAA 3rd party storefront has failed and they don’t think it’s worth spending money pursuing that anymore. So in that sense, they don’t make sense as a strategic acquisition to boost Microsoft’s PC presence in terms of storefronts. Given this, and given GoG’s status as a DRM free store, it’s difficult to imagine Microsoft going “all in” on the platform. Microsoft does not currently think it’s worthwhile to publish their AAA games anywhere but Steam and the Windows/Xbox store.
Selling point number one has been slowly eroded as many GoG games came to Steam and other platforms, and the lowest hanging fruit of “games that aren’t sold anymore, but could be with a little effort” has been plucked years ago and so new sales of retro stuff has declined.
Keeping it around as the cost for doing business with CDPR is the kind of thing that seems possible initially, but as soon as somebody decides it’s time to tighten belts at Xbox, the 3rd PC games launcher Microsoft owns, one which is unprofitable and has no ties to any other division (like the Win store does to Windows team) is going to be an easy target.
If Microsoft decides to buy CDPR, it will be predominantly or exclusively because of their game development and publishing. The Witcher was one of the biggest games of last generation, and despite the Cyberpunk fiasco, it’s a game that has sold tens of millions of copies and continues to be one of the best selling games every sale on Steam. Witcher and Cyberpunk are both “Bethesda Softworks Tier” in terms of their sales potential, which is very attractive. Given CDPR trading around ~3 billion dollar market cap recently (2.7 currently), that seems a lot more viable than it did back when it was 10+ billion for the same company only 18 months ago.
I didn’'t think of all that and you make some great points.
I do wonder if MS could expand on GoG and make it have more recent games, so it would be worth it, to get CDP and then it would possibly be a cheap investment, to incorporate into the Windows store.
I stick to my opinion that it won’t happen for various reasons (from licensed games to EA Play).
For EA, I think Amazon would be an interesting. They could make EA Play + Luna integration allowing EA Play to have everything in the cloud.
Considering Microsoft’s Open App Store policies and the existence of other various other launchers, I think they will go after Steam sooner or later (unless Valve becomes a public company and it will be a completely different situation). Probably Microsoft will have to agree to some concessions (like for example allow third party publishers set the prices themselves rather than Steam sets them)
The most interesting thing is how they will deal with Battle Net and Xbox Store. Curious to see.
Unless Microsoft bundles Steam with Windows (though nobody cares that Microsoft has Windows Store or Windows Xbox App pre-installed), I don’t think there is a problem there (granted people install Steam sometimes by default).
Reasons that Xbox wont wait too long after acquisition to go big again. We’re experiencing crazy inflation that is lowering the value of cash, so its better to spend it. Tech companies including gaming have seen big market cap decreases. This is now a buyers market.
Additionally, people seem concerned with Phils ability to tackle this all. I think this may be precisely why the are now a full branch with him as CEO. He has more power than ever before to surround himself with whatever help or oversight that he needs. He doesnt need to be the one that is hands on.
Looking at some of the new games coming out from new studios China,south Korea and Poland seems to be hot spots, I will be curious to see if Xbox looks to expand in these areas and diversify there first party content. It seems that there is plenty of opportunities in these regions
Hard to say about China - due to Microsoft being american company and China vs USA tensions. Regarding South Korea - I think with ABK they got quite a solid foothold there. Most of the games there are MMOs and I do wonder if Microsoft wants to acquire MMO developers (I would like Pearl Abyss). Poland…Hard to say as they have just started growing and basically have only CDPR and Techland of well known studios.
The point of the acquisitions is to gain the foothold and get content diversity. The whole point of japanese acquisition is to get this content diversirt (IP) and gain legitimacy there (so other developers stop skipping Xbox). The logic is “we should not skip this platform as this platform holder owns XXXX”.
In Korea - aside it being mobile & PC market - they already have a leverage due to PC and owning Blizzard. A most of korean companies (big publishers) make MMOs (all other types of games are small) so not much for content diversity there.
They are too small for Microsoft to be interested in it. Microsoft is clearly in IP and community acquisition mode.
Like NRS - is a no brainer for Microsoft - due to IP and community.
Yes Hue I was thinking more about diversifying content via studios, for instance china and south Korea seem to focus a lot on mobile but are branching out to more console and PC focused games but it’s a big risk for them, that’s where Xbox could come in and help them out.
China
Game science
Digital Sky
South Korea
Shift up
Hound 13
Poland is a little different as most studios are more well known I personally still like people can fly they would be a great studio to invest in and grow within Poland they could become a hub for Xbox in Poland, but there are a few other smaller studios such as the farm 51 and CI games that could be worth a look
I think it makes sense, especially as the talent in that region will likely want to make content which appeals to their specific market.
I have always loved PCF, especially Bulletstorm. Gears of War Judgment was awesome too.
That said with how RBG-centric the new Xbox is I suspect they would go after CD Projekt Red instead (also in Poland) .
What’s your take on acquisition of chinese and south Korean studios? we are usually fairly alligned with our thoughts on acquisition, I think they will go big again as soon as ABK is finished, but do you think they will just continue to go after publisher’s only at this point or will try and do both studios and publishers.
I think they will go after studios after ABK, while they work out deals with publishers. I believe both XGS and Bethesda are ready to continue growing by acquisition so both would be primed to add new studios. From what I understand, neither got rid of their M&A teams so Id think both will be hungry to continue to grow their business. If we look at it from the avenue that both publishers are now fully controlled by a head, those heads are ultimately responsible for continued growth for their publisher, so that comes with games, but also acquisition so I expect both to push acquisition. Same with Activision once they are on board and the ship is righted.
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