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Matt_Simpson comments on Open Thread: March 2010, part 3 - Less Wrong
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"good game"
It's sort of like an e-handshake for online gaming to acknowledge that you have lost the game - at least in the online mtg community.
In my experience (most of which is a few years old) it is said afterward, but has its literal meaning, i.e. that you enjoyed the game, not necessarily that you lost it.
I think this depends on whether the game is one that's usually played to the end or one where one of the players usually concedes. If it's the latter, "gg" is probably a concession.
A nontrivial variant is also directed sarcastically at someone who lost badly (this seems to be most common where the ambient rudeness is high, e.g., battle.net).