CoX Q3 Earnings Result (w/ Freedom's first weeks)

7 years of doom and counting...

The bad news is that the small uptick seems to be due to a currency fluctuation, and CoH actually made a tiny bit less than the previous quarter. The good news is that regardless, CoH bucked the general trend downward for everything except Aion (which was up 3%: that's also probably entirely due to currency). The biggest unknown to me is whether the first two weeks of release are significant for Freedom's launch, because it was a somewhat soft launch in terms of new players joining, and because VIPs would have been burning through their accumulated points first. We'll almost certainly need to see at least the first two full months of Freedom launch to get good data on the net incremental effect of Freedom, which in effect means the next quarter's numbers.

I wouldn't expect Freedom to have any significant effect on revenue for this period. The F2P period included in this report is only about the same length as a free trial, so I don't think even people who decided that CoH was the game for them would have any serious spending in this time period.

Also, revenue from Paragon Point sales *may* be deferred until point redemption. I've been out of accounting too long to remember for sure the GAAP on this, but it's a possibility. If so, that will smooth the revenue spike from initial sales over the following quarter or two.

It will be interesting to note over the next few months if that uptick we see is from the initial offering of Freedom and people purchasing points right away. As months wear on, we might see the decline resume as less points are purchased. The key to stop this decline to for CoH to continually offer new products in the market that people want; Titan Weapons, Staff Fighting, etc. Any sort of dry spell will result in plateau or decline.

I doubt Paragon salaries are that high, probably average is around 50K or less. I am assuming they are using the asian salary model more than the US one. (I have worked with several large Korean company staff members over the years and their compensation is fairly low range for their positions -- I assume the managers and seniors may are making more but the lower end positions are making less)

I assume that with benefits they are a bit over $3M, plus even if NC soft is providing GMs and servers I can promise you that Paragon pays for it on their balance sheet as a transfer payment.

Most likely the largest expense historically was backbone/transport. Fortunately those prices have been dropping like a rock in the last 5 years. I saw some interesting studies about the backbone costs on Eve many years back. The serverfarm/data costs were more than half their outlay including development.

One other thing, for GR you can assume that at least some of the ramp of employees was based on contracts and not full time hires. Those would NOT be counted in a layoff but they would be gone when the downramp occurred.

Personally I think the surge in FTP games is driven in part by the fact that backhaul is so cheap now that as long as they don't have to scale their serverfarm up with NEW equipment that there is very low to no net cost for the free players.

For an example of a dead game that is still running, look at the state of Warhammer... Once they killed off Mythic and merged them into Bioware the staff on Warhammer was transferred to other products.

CoH is nowhere near that point, and after the streamlining recently I suspect their localization costs are down as well.

Its certainly in better shape than any other game in the Genre.

I still want an answer as to what "sales" refers to. Are we counting the Paragon Market? Are we counting the PlayNC Marker before that? Are we talking just box sales? Are we counting VIP subscriptions? Are these numbers representative of ALL of the game's revenue?

I looked for an answer in this thread, but all I saw was "it doesn't matter," which I don't agree with.

Quote:

Originally Posted by Arcanaville Samuel_Tow is the only poster that makes me want to punch him in the head more often when I'm agreeing with him than when I'm disagreeing with him.

Thanks, Beber! Unlike Goliath Bird Eater, I appreciate these updates and especially appreciate you taking the time to put it in chart form with the added issue releases.

Are the numbers in their report "smoothed" for the exchange rate? The dollar actually strengthened about 10% against the won between 6/30 and 9/30 (1069 to 1186).

It's hard to make sense of multinationals revenues when everyone's beating their currency with a stick.

The best way to tell if a game is failing is when they start giving away the store and giving you powers/abilities that they always said were too powerful for the players or unbalancing or don't fit the game.

Every MMO I've watched close shop (and there have been a few) went through this the last months. "We've increased the drop rate 10X permanantely!" Things like that. (oddly in Auto Assault 10X the drop rate was STILL nothing lol).

They are still investing in the game so I don't see it going away any time soon.

The one I find odd is WoW. Subscribers down approx 10% two years running and they start giving away Diablo III? They still have 10 mill subscribers and the only ones that are gonna sign up for annual sub are probably ones would wouldn't have left anyway. Who buys a subscription specifically so they can play another game? Seems dumb.

Freedom may have come out for old and existing players on the September 13th but it wasn't available to new players until the 27th. That's not a lot of days to make an impact.

I know as a VIP who doesn't have any spare trial accounts to upgrade to premium, I have yet to buy any additional PP (yet) but relied on my four months of PP stipend to purchase the few new items that came out during that period. If the majority of VIP players were like me, no additional income was generated via the Paragon Market.

Plus the various "box" sets as well as boosters and packs vanished from the store at the end of August. There may have been an uptick in sales before they were pulled but their departure without the Paragon Market online yet didn't help the bottom line either.

Hmm interesting...

always have wondered why I6/CoV was waaay more out there then GR ...

tho.. even the game looks like sales are here n there...i care more about comparing them to other games..pointless (but interested) about comparison to WoW, Champions, DCUO etc..thts what i care about more- how well we're doing compared to those losers :P