Chess.com has downsized for the first time since it was founded in 2005. The number of members is no longer growing as fast as it did during the pandemic, but there can be no talk of a crisis. The platform is rather cutting costs to improve profitability and concentrating on its core business.
When Chess.com acquired the Play Magnus Group at the end of 2022, the English publisher Everyman and the Dutch publisher New in Chess also came under its wing, but the business of print and high quality content remained a strange one for the online company. Chess.com announced on Monday that the two publishers are being transferred to the former rival Quality Chess. Its boss, Scotland-based Danish grandmaster Jacob Aagaard, is their new owner. As Chess.com VP of Global Operations Dmitri Shneider confirmed to ChessTech, no financial payment is involved, instead Aagaard is handing over the digital rights to the 200 existing Quality Chess titles to Chess.com. Its subsidiary Chessable will exploit them and also has a cooperation for the future based on usual royalty terms. Shneider writes: “We believe this deal is a win-win for both parties. Chess.com can focus on digital initiatives, while the publishers can focus on their core strengths in the print business.”
The merger of the three strongest providers of books for competitive players means less competition and weakens the position of the authors. Time will tell whether Aagaard will use his enhanced position to venture into more ambitious book projects than the market allowed for so far.
It is welcome that the New in Chess magazine can once again report independently of the most powerful protagonist in chess alongside FIDE, even if its book section is becoming more partial. Under its new editor-in-chief Remmelt Otten the magazine shifted its focus away from event reporting, is providing deeper background and offering more diverse viewpoints.
Meanwhile, Chess.com has not only parted company with the publishers and their staff, but has also laid off around forty (Chess.com didn’t comment on the number) of its roughly 800 employees. The company’s CEO Erik Allebest had often pointed out that hardly anyone had ever left Chess.com of their own accord. The departure of David Pruess had been a painful exception. Asked by ChessTech to explain the lay-offs and how he feels about them, Allebest had a company spokeswoman reply: “We have made the difficult decision to reduce the team somewhat and say goodbye to many fantastic people who love chess and who we will miss.”
General Atlantic, a growth-oriented investment company, took over shares priorily held by the Scheinberg family in the beginning of 2022 and financed the Play Magnus Group acquisition. More than two years later, the investor may be pressing the management to bring the numbers in shape for an IPO.
CEO Allebest has since published a statement on Reddit that the lay-offs are not about profitability but about right-sizing.