CoX Quarter Earnings - Q1 2011
By
0zymandous,
Posted on: 2011-05-17 24:06 in CoH and CoV General Discussions
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And you're a fool if you think the crisis isn't still effecting the bottom line for most of the people in the world. Belt tightening happened, people dropped things that were entertainment and expendable, they go out to eat less, they don't go to the movies as often, people dropped things like cable and home landlines. Toss in the seasonal gas price hike stateside and other MMOs that have launched recently and you can easily see how those numbers could drop or go down.|
Originally Posted by Pebblebrook
The major effect from that might have happened 2 years ago. Think the majority of people who had a need to evaluate if CoX was worth keeping in light of their financial situation decided back then.
The subprime crisis started 4Q 2009 ish. Prior to that CoX sales were: 1Q09 6,837 2Q09 6,673 3Q09 5,471 Then the 15 months after: 4Q09 3,928 1Q10 3,348 2Q10 3,491 3Q10 5,709 (GR sales temporary spike) 4Q10 3,239 1Q11 3,055 Although the past year is still decreasing but is doing so with a more tapered rate. To me that might appear that decrease will mostly be from the merits of the game instead of a need to cut expenses. But since the quarterlies doesn't specify the cost per game, we can't really know how low it can go before NCsoft will consider it as no longer financially viable. If the cost is way lower than that then it can still go for years. But the decline is still somewhat worrying for me, since if it does keep decreasing that means more cost cutting somewhere. |
Even other games posted decreases in Q1.
I'm personally interested myself to see if there is an increase with the PSN outage.
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If I wanted to see if my current population could be supported by less hardware, a stress-test is exactly what I'd do.
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Originally Posted by ransim
Yes thats right hardware downscaling thats why they want us to try and get more then 3500 people on at once to test load on Freedom on the 27th.
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But the *effect* for *consumers* is nearly as bad as it was at the worst moment of the Great Recession because unemployment figures are still nearly as bad.|
Originally Posted by Pebblebrook
The major effect from that might have happened 2 years ago. Think the majority of people who had a need to evaluate if CoX was worth keeping in light of their financial situation decided back then.
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With continued unemployment, and the continued decline of average wages and wealth of the middle class, then spending on leisure activities will *continue* to decline. Especially now with the increase in oil and energy costs, which significantly erode discretionary spending.
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It can't. You can't remove hardware and expect a capacity increase.|
Originally Posted by Daemodand
If I wanted to see if my current population could be supported by less hardware, a stress-test is exactly what I'd do.
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This isn't Star Trek physics where you take out half your memory but just maybe if you reverse the polarity of your hard drives you just might get extra capacity.
They upgraded. That's why Freedom isn't in the red as much as it used to. Now they want to see just what the new limits are so they know where to set the limits for the server queue.
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Lets put this into some perspective. Here is a graph showing sales for ALL NCSoft games over three quarters. Notice how most of the other games exhibit the same trending? Even the more populous games?
Its called a bad economy people. People are still hurting and lacking jobs or discretionary spending money. Its not doom.
Then why are they making it so hard for soloers and small teams to do the end game?
Looking at this info, You would think they would want to keep all their subscribers, yet I know a few soloers like myself who have quit the game because there is nothing for us in the endgame as it stands currently.
Devs, Marketing, whoever this concerns, I beg of you, I love this game....keep it afloat...please.
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And, significantly, overall NCSoft is showing profits are up, even if they're only maintaining their revenue in the current economic climate.|
Originally Posted by ransim
Lets put this into some perspective. Here is a graph showing sales for ALL NCSoft games over three quarters.
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Originally Posted by Celestial_Lord
Dooooooom!
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It's not just them...think there's enough to show people are still spending on entertainment. They just might be more discerning on which ones they spend it on.
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Originally Posted by TrueGentleman
And, significantly, overall NCSoft is showing profits are up, even if they're only maintaining their revenue in the current economic climate.
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Not surprised at all.|
Originally Posted by TrueGentleman
Doom is spelled a "discontinued operation".
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The 'discontinuer' is infamous for its ruthless bottom-line attitude and acquires and spits out games and studios until it finds one that lays golden eggs. Its use of a company name of a discontinued game developer of the 80's is all you need to know that that company is all mask and no content.
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Off-topic, but this a zillion times.
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Originally Posted by Zombie Man
Not surprised at all.
The 'discontinuer' is infamous for its ruthless bottom-line attitude and acquires and spits out games and studios until it finds one that lays golden eggs. Its use of a company name of a discontinued game developer of the 80's is all you need to know that that company is all mask and no content. |
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Though i see where Daemodand is coming from. They're making it more efficient for "old-fashioned business reasons" as Second Measure said. My first thought after seeing that was a way to cut cost and it would be completely understandable to me in light of the numbers.
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Originally Posted by Zombie Man
It can't. You can't remove hardware and expect a capacity increase.
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I'm sure there is still some of that effect felt in this game, i'm just doubtful that the financial crisis is still the major influence for the continuing decline.|
Originally Posted by Zombie Man
But the *effect* for *consumers* is nearly as bad as it was at the worst moment of the Great Recession because unemployment figures are still nearly as bad.
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CoX have had a slow, tapered decline in revenue long before the subprime crash. At the time of the crash was an understandable huge drop, then in the 6 months after it went back to a slow, tapered decline as before.
(Sorry, slow response...thread grew faster than i refresh so missed it the first time heh)
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No, but you can put in cheaper hardware and expect a capacity increase simply based on the speed at which tech scales. Given a 3-year replacement cycle you can probably spend half as much to get the same performance each time.
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Originally Posted by Zombie Man
It can't. You can't remove hardware and expect a capacity increase.
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One thing that was pointed out to me a while back when I made a chart is that most subscriptions are in USD (dollars), while most of the financial reporting is in KRW. You need to also take into account the fact that the dollar has been dropping the past six months against the won somewhere around 5% - 6%. As a result, even if City of Heroes had the exact same income today as it did six months ago, the numbers would be down 5% - 6%.
In reality, I doubt this currency exchange actually takes place. The dollars it takes in probably goes to paying maintenance and development costs--in dollars. So while income may be down, so are expenses as well. It all works out in the wash.
Not saying that's the entire story, of course. As others have pointed out, it's also worth noting that the economy is still in a state of thorough tankedness, and people are reducing their spending. The more interesting numbers to me is how City of Heroes is faring compared to its competition in the marketplace, especially in terms of market share. And to a larger extent, how much NCsoft is investing in Paragon Studios and the game, since they know a lot better than we do the exact variables at play.
Based on those metrics, I'm really not that worried that the game will be going away or suffering any significant losses anytime soon.
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To be fair to CoX all MMOs either fall immediately after release or begin a steady decline, CoX has been on a steady decline for years and that is to be expected. So it isn't Doom yet but this game WILL eventually be shut down, it is inevitable. Thing is, they will probably release CoX2 or another similar franchise before then.
What I take from the graph is that, as others have said, GR was not as big as it was spouted as. I completely agree with this assessment as I was one of the people who quit after GR came out and came back for completely unrelated reasons, I would say DESPITE GR. Hell I have still yet to move a character all the way through Praetoria because I find it that bad, I still roll up in Mercy/Atlas.
For those saying the economy is to blame, I suggest doing a bit of research into the entertainment industry and the economy. Typically the entertainment industry is hardly effected by an economic downturn because people ALWAYS want entertainment and honestly MMOs are a great dollar value. It is the same way in my industry, the food industry, that there is always a market no matter how bad the economy is. My point is that if the economy is to blame I think we would see a far sharper drop than what we have. Really the game is showing normal signs for an aging MMO.
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As far as the "signal to noise ratio" is concerned... There's like, what, eleventy dozen happy customers for every doom sayer? That being the case, this thread is very encouraging!
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Originally Posted by TonyV
One thing that was pointed out to me a while back when I made a chart is that most subscriptions are in USD (dollars), while most of the financial reporting is in KRW.
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The exchange rate didn't change that much the last 6 months.
4Q10 1 USD = 1135.05837 avg ask price
1Q11 1 USD = 1121.61478
or the other way around...
4Q10 1 KRW = 0.00088 USD
1Q11 1 KRW = 0.00089 USD
CoX Sales in USD
4Q10 $2,850,320
1Q11 $2,718,950
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Which would give you . . . . .66,666! It is DOOOOM!
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Originally Posted by Pebblebrook
It's a quarterly number, so should also divide by 3 months.
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I would tend to agree with that. Personally I took a break when GR was released in part due to the pushback of the Incarnate System.
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Originally Posted by Arbiter_Shade
What I take from the graph is that, as others have said, GR was not as big as it was spouted as. I completely agree with this assessment as I was one of the people who quit after GR came out and came back for completely unrelated reasons, I would say DESPITE GR. Hell I have still yet to move a character all the way through Praetoria because I find it that bad, I still roll up in Mercy/Atlas.
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The same. |
Originally Posted by 2short2care
I plan on staying til they shut off the servers, then I hope they have a stand alone game I would play that.
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I see this game going into maintaince mode more than shutdown, with AE content can be added for a long time after being placed in care taker mode.
I don't suffer from altitis, I enjoy every minute of it.
Thank you Devs & Community people for a great game.
So sad to be ending ):
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Isn't Guild Wars a no-subscription game? There's a box cost, but isn't it essentially a free to play game?|
Originally Posted by Daemodand
Problem is, NCSoft simply does not understand or like F2P.
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The problem with converting an existing subscription-based game into a F2P game is what do you do with all your long-time subscribers? Paragon has said many times that they have excellent retension of players, which means a lot of City of Heroes players have been here for a very long time supporting the game. What do you do with all those long time veteran players that form the backbone of your customer base? The challenge is making free to play something that offers a compelling value proposition to your existing subscriber base, and that's not a trivial problem to solve.
The truth of the matter is that no one really understands "free to play" as a model yet: its simply too new for there to be any real experts floating around. There seem to be lots of ways to do it wrong, and a few ways to do it right. But what has worked for other games won't necessarily work here. If the devs decide to go F2P, I would expect a lot more than just snapping their fingers and letting people play the game for free.
As to the numbers, the revenue drop from Q4 2010 to Q1 2011 is comparable to the revenue drop from Q4 2009 to Q1 2010, and many players extrapolated that the game probably had only two years left before essentially dropping into a pure maintenance mode, if not shutting down entirely. Somehow I doubt that is going to happen in the next seven months. Extrapolating from two data points is not a good idea. In fact, people were also extrapolating the drop from Q2 2009 through Q4 2009 and saying the game probably had only a *year* left.
What the data of the last two years tells me is that left to its own devices, City of Heroes' playerbase will very slowly drop, in fits and spurts, like most very long-lived MMOs, but also that the game has life in it insofar as people seem willing to pay more to get more, if they feel the value is worth it. Whether NCSoft and Paragon decide to strategically focus on more expansions (Going Rogue was not a success in terms of permanently increasing subscriptions, but it was a limited success in terms of generating revenue), going Free to Play, or something else entirely, I think City of Heroes still has a future for the foreseeable future.
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Fixed.|
Originally Posted by Arbiter_Shade
To be fair to CoX all games either fall immediately after release or begin a steady decline
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Originally Posted by Arcanaville
Isn't Guild Wars a no-subscription game? There's a box cost, but isn't it essentially a free to play game?
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With the amount of content and systems CoH has now, I think it's set up quite well if they decide to try an alternative subscription model.
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Originally Posted by Arcanaville
If the devs decide to go F2P, I would expect a lot more than just snapping their fingers and letting people play the game for free.
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