CoX 2011 Q4 Earning Results
By
Aggelakis,
Posted on: 2012-02-15 03:48 in CoH and CoV General Discussions
Something else to remember is that Paragon Studios is currently working on and recruiting devs for a "nex gen project" - which would seem to heavily imply that NCSoft is comfortable with the ability and performance of PS to give them the go ahead and funding for it.
@Golden Girl
City of Heroes comics and artwork
I wish the numbers were better, I'm relieved they aren't worse.
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Ahh, |
Originally Posted by Celestial_Lord
Other MMOGs that have gone free-to-play have seen increases of over 500%.
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500% of £10 = £50
20% of £250 = £50
The only difference is "how much money were you starting off with"
Percentages are a funny thing... there was a report once in the newspaper (i forget the exact topic), but it was along the lines of "Drinking red wine increases the chance of getting liver cancer by 50%"*...
It then stated further down in the meat of the article that it increased from 2 in 100,00 to 3 in 100,000 ....so yes, although "correct", it was such a small chance of something happening, that actually stating the odds didn't make it seem "important", whilst the percentage increase was an "eye grabber".
*As i said, i forget what the topic was about, but i was surprised with how poor the reporting was inside it.
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Which is why i mentioned it was interesting. |
Originally Posted by Winterminal
You have to take into account how many individuals are included in each of your groups of "people."
The number of people who purchased Going Rogue was the vast majority of the player base, and based on the spike in sales, was an obvious draw for players who had let their accounts lapse as well. Once Going Rogue had been out for about a month, it was rare that you would run into a subscriber (which all players were at that point) who had not purchased it. The number of people who have spent large sums of money on the Paragon Market is most likely significantly lower. Speaking only for myself, I have actually spent less money on the game since Freedom launched. I am still paying my monthly subscription fee, but in the approximate 5 months since Freedom launched, I have not spent an extra cent, using only my monthly stipend. Before Freedom, it is possible a Super Booster would have been released in that time on which I would have spent an extra $10, but with the VIP rewards, I am able to get exactly what I want without spending extra (so far, at least). So Paragon Studios has actually lost money from me. |
It does seem to imply that more people were willing spend an extra $30-40 on GR but less people (apart from a few individuals spending those 100s of dollars) willing to spend a similar amount on the Freedom store.
Perhaps as you say, there maybe a lot of VIPs that are fine with only using their free points to buy store items or dropped to premium and are now paying NCSoft less money.
If this quarter's revenue turns out to be less even with super packs, i wonder what else they would come up with to convince people to spend.
Scooped
Glad to see the numbers up, though I too was hoping they'd be better. I'm a bit concerned about current in-game population, and I don't see how the numbers will keep going up for next quarter, but I sure hope they do!
I wonder how low the sales can go before the game can no longer stays open? NCsoft is a harsh mistress.
And I wish they hadn't made so many returning players give up and leave by graying out their IOs. Not letting returning players keep their IOs was a dumb move.
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It depends if you're a publicly-traded company or not, and even then you can report things in a way to conceal things. |
Originally Posted by CactusBrawler
Pretty much.
I do belive that you can get in some deep poop for lying about how much money you are making, if you are a company. |
- NCSoft gives good granular reports on a per-product level.
- A company that's very diversified making... say... televisions through gaming consoles through PC's... along with game titles and MMO's... (We'll call this fictional company "Tony") might just report the general profitability of its subdivision "TOE" rather than reveal each MMO's revenue.
- For other games, you just have press releases that don't have the same legal requirements as quarterly financials, so they may be fudged a bit... or creatively counted. They'll say they have "X million players" and let the herd believe that that means "x million times $15 per month" when in reality, 4/5 of those users are in a region where the game doesn't follow the subscriber model, but instead uses cybercafe mass licenses and/or very low hourly rates. That doesn't matter- the herd likes big numbers.
- Since nobody "unsubscribes" from a F2P game, many try to get away with counting every person that EVER signed up (ignoring that 90% haven't logged in in the past year) or "x number logged in at least once in the past 90 days" without noting that they sent a "your account is now inactive, if you don't log in at least once in the next x days, you will lose your stuff" to inflate that number.
- Subscription services are no different. Some started using "peak concurrent users" (the highest total logged in at any single time) to look at how active the subscription base was, but then others organized extremely limited-time events to drive up this number at least once per quarter without ever mentioning that part.
- Better still, a company will use different metrics each quarterly report to really make comparisons over time difficult (unless, of course, the comparison would be positive. Q1 they report "peak concurrent users." Q2 they report "median concurrent users" (to address concerns that the previous quarter's "peak" was grossly inflated by an event) but they never go back and tell you what Q1's median would have been.... Q3 they switch to "total active subscribers" and Q4 they change what they define as "active"
For all that, I cringe even more when I see people that just use percentages of vaguely-defined numbers.
Compare the following:
MMO1 announces that it will go F2P in the next 3-6 months. It fumbles the announcement badly, creating player hysteria and people that just decide to leave, saying "why should I pay for the next 3 months?" The devs start holding off on what they're releasing to the playerbase, reserving the good stuff for the upcoming MMOStore. The people that look for the new and shiny get bored and look elsewhere. On top of that, another MMO releases during that window, so even more leave to check that out, coming back when its free. Numbers drop so low that the boost from going F2P is bound to look big in comparison.
MMO2 does the same announcement, but doesn't fumble the ball. Their community managers and developers stress that they really value their premium subscribers and they plan to offer things to encourage the preems to stay around. They provide new content through the beta and up to release (denying themselves what could be quick-n-easy sales) and don't see the steep slump that MMO1 did leading up to launch. Their release attracts the exact same number of new players (and returning players) as MMO1, but MMO2 has also given away more stuff to their subscribers (and returning players) so their revenue bump is also less impressive.
MMO2 managed the transition better, probably has a more satisfied player base, and had better overall revenue, but if you went by something as comparing the "percentage of revenue gain before/after F2P launch" it'd actually look like the loser.
If I were really analytic, I'd also map how City of Heroes was doing relative to some measure of the economy as a whole. The time from 2008 through last year were pretty brutal. Sometimes losing ground but not as fast as the economy as a whole can be consider a win. I'd also map how City of Heroes did relative to some of its competition. Aside from seeing how our marketing people and developers stack up against other companies', it would also give insight into how the industry as a whole is doing.
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Hey! Stop talking about my toes, that's creepy.
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Originally Posted by Chase_Arcanum
(We'll call this fictional company "Tony")...
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We've been saving Paragon City for eight and a half years. It's time to do it one more time.
(If you love this game as much as I do, please read that post.)
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But revenue is only half of the equation for determining profit. As long as they feel they make enough profit the game will be fine.|
Originally Posted by Pebblebrook
That was my thought as well. It doesn't quite help the game's yearly revenue much which is still at its lowest.
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Year Avg Exchange Sales KWon Sales USD 2004 1102.17935 31,475 27,607,023 2005 1043.65467 34,265 33,199,783 2006 952.37930 25,016 25,770,998 2007 922.05946 23,446 25,059,657 2008 1365.35609 24,217 22,335,820 2009 1172.12370 22,909 17,760,819 2010 1135.05837 15,787 13,564,705 2011 1147.87098 12,089 10,881,574 Which is interesting because with GR, people would've only spent maybe $30 or $40 above their sub fees that quarter but it got higher reveneues than from the Freedom store where people state they spent 100s of dollars. It'll be interesting to see 1Q 2012's numbers if this is a sustainable increase instead of a single revenue boost, especially with having super packs for a revenue source. * Oops, disregard the exchange rates...got lazy with cut/paste. Those are actually average rates for 4Q of that year only. But the USD value is summed from each quarter so that should be somewhat fine. Sorry. |
GR required putting boxes on shelves. Putting new boxes on shelves is going to constantly cost. Freedom required them to create the Paragon Market mechanics which once created they can use for all kinds of products.
Also a box on the shelf might cost us $40 but how much of that did NCSoft get? I would think less than 50% of it. Barring some weird deal they get 100% of what we buy in the Paragon Market (less the credit card transaction fees).
total kick to the gut
This is like having Ra's Al Ghul show up at your birthday party.
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Yep. I'd wager less than 50%. I've heard that once you factor in the distributor, the packaging, and paying for frontage (devs often have to PAY for good shelf space in a gaming boutique nowadays. MMO devs pay more than standard PC games, and PC games pay more than console games because the resale value of console games is very valuable to the boutiques) a boxed game sale barely brings in the equivalent of the "free" month subscription that the game comes with.
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Originally Posted by SwellGuy
Also a box on the shelf might cost us $40 but how much of that did NCSoft get? I would think less than 50% of it. Barring some weird deal they get 100% of what we buy in the Paragon Market (less the credit card transaction fees).
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The numbers for this year will probably be amazing. I'm spending far more than the monthly subscription fees per month(but not every month). Like $100 this month, $50 last month, possibly over $300 around xmas(I totally wanted tier 9). And if I do it, others are doing it too, because you are never the only one :P
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I wasn't really talking about profitability for precisely that reason. We don't know what their cost is now. The only cost number i know of was $18mil/yr but that was back in 2004.|
Originally Posted by SwellGuy
But revenue is only half of the equation for determining profit. As long as they feel they make enough profit the game will be fine.
GR required putting boxes on shelves. Putting new boxes on shelves is going to constantly cost. Freedom required them to create the Paragon Market mechanics which once created they can use for all kinds of products. Also a box on the shelf might cost us $40 but how much of that did NCSoft get? I would think less than 50% of it. Barring some weird deal they get 100% of what we buy in the Paragon Market (less the credit card transaction fees). |
In any case, profit comes from revenue...if revenue has decreased, then either profit has also decreased or more of their budget will be cut. Either way, decreasing revenue is not a good thing.
And sure, there are marketing costs for putting a box on store shelves, but there's also extra infrastructure (and other) costs when gearing up for the F2P crowd.
Yes, revenue from box sales is shared...but doesn't that say something that even though $30 for a box gets NCSoft less money than a $30 Freedom store purchase (assuming using points that are purchased apart from the stipend) and yet the quarter with 1 box release gained higher returns for a similar 3 month period.
EDIT: * Also assuming most of the GR sales is from physical stores and not bought from the previous NCSoft online store which sales is not shared with other companies.
CoX notes for 4Q 2011 (mostly...and a bit from Freedom's headstart at the last days of 3Q 2011)
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9/13/11 CoH F2P headstart and issue 21
9/13/11 Store Add: barbarian costume pack (400pt), rocket board power (600), beam rifle powerset (800 - 20% sale 640), school backpack (80)
9/19/11 Store Sale: npc spectral pirate costume power 600 pt (item removed after sale ends) till 9/21 (3 days)
9/20/11 Store Add: sig storyarc (400), volcanic aura (80)
Store Sale: revival temp 50% off (113), unslotter 5pk 50% off (225), xp boost temp (450)
9/27/11 Store Add: cot costume set (400)
9/27/11 CoH F2P Live to all
10/4/11 Store Add: street justice powerset (800), revival temp (225)
Store Sale: xp booster 25% (225), costume unlock 25% (600)
10/11/11 Store Add: Sig storyarc #2 (400), firefighter helmet pack [2 hats] (80)
Store Sale: unslotter 5pk 25% off (338), respec 25% off (600)
10/18/11 Store Add: halloween costume pack (400) will be removed from store on 11/18/11 (32 days)
10/25/11 Store Add: volcanic aura (80), costume temp (400 ea) rikti mentalist,ppd hardsuit,carnival harlequin items removed 12/6 (50 days)
11/1/11 Store Add: undead survival kit (400) [include:stlouis hammer,holy shotgun shell,warwolf whistle,revival,precise dual insp]
11/8/11 Store Add: SSA3 (400), autumn path aura (120)
Store Sale: time manip powerset (400), pulverizing enh set (186), touch of death enh set (400), makos bite enh set (450) enh sets removed from store after 11/14/11 (7 days)
11/15/11 Store Add: german sheppard pet (500)
Store Sale: costume power (480 ea) rikti mentalist,ppd hardsuit,carnival harlequin end 12/6…autumn path aura (80), halloween costume pack (400) end 11/18
11/21/11 Loyalty program promo from 12/1/11 ending 3/31/12..get items: badge,helmets,chest emblem,aura,costume change emote
11/22/11 Store Add: black Friday only - IO sets basilisk gaze lv10-30 (400) 1070, kinetic combat lv20-35 (400) 775, luck of the gambler lv25-50 (400) 1125 (black Friday extended to 12/1)
Store Sale: Black Friday - 11/25 -12/1 50%-80% off…vip starter $0.99… xp boost 1chrg (30) 120 pp orig, 3 chrg (75) 300p, 5 chrg (113) 450p…windfall 1chrg (30) 120, 3 chrg (75) 300, 5 chrg (113) 450…
Store Sale: Black Friday cont: invention lic (80) 160… char xfer (200) 800…respec (400) 800... large insp (50) 300-600 orig price...martial arts booster (400) ends 12/1
REMOVED: numina convalescence lv30-50 (400) 1170 orig price,
11/28/11 subscription promo 6mo/12mo 1 or 2 free months…11/28/11 ending 12/31/11
11/29/11 Store Add: Gunslinger costume pack (400)
Store Sale: dual pistol powerset (600)
12/6/11 Store Add: titan weapons powerset (800)….titan weapons pack#1 free till 12/19 w/ purchase [includes atomic smasher,demonic axe,plasma sword,purgatory sword models] weapon pack#1 removed 12/19 (14 days) **pack could be bought for 0 pp w/o powerset **
Store Add: signature story arc #4 (400)
Store Sale: character slots x5 25% off (1200) orig 1600, xp booster temp 25% off (338) orig 450
12/13/11 Store Add: mini-snowbeast temp (160) removed on 1/31/12 (50 days), sig story arc# 4 (400)
Store Sale: all rare IO enh 50% off…numina convalescence (400) orig 968, eradication (428) 856, obliteration (428) 856
12/20/11 Store Add: winter holiday pack (400) [includes: 11pc costume,naughty/nice aura,snowball temp,gifting emote] till 1/31/12 (43 days)
12/27/11 Store Add: New Year's pack (160) [incl: firework aura,confetti cost change emote,3 fireworks emotes
Store Sale: windfall temp x5 50% off (225), super tailor 25% (600)
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Not too surprising at all.|
Originally Posted by Pebblebrook
Yes, revenue from box sales is shared...but doesn't that say something that even though $30 for a box gets NCSoft less money than a $30 Freedom store purchase (assuming using points that are purchased apart from the stipend) and yet the quarter with 1 box release gained higher returns for a similar 3 month period. |
1) MANY of the sales of the game weren't box- they were digital preorders directly from the NCSoft store. Even if I paid the preorder back in May, legally you can't usually report it until its the revenue is fully realized (the item ordered is supplied to the client). That means that all the $$ gained by offering the pistols and demon summoning sets early to those that preorder probably wasn't realized until the quarter that the game shipped. All the revenue of the digital versions went straight to NCSoft, too.
2) The devs give us subscribers a lot of freebies (Sig story arcs, powersets, auctionhouse, stores, etc) and even gives premium folk a lot, depending on their preemie status. Heck, for all the things you listed, I haven't put a penny into the game more than my (discounted) annual subscription fee (and my wife's), and got most of what I wanted from the store on just my "free points" that come with the subscription....
Heck, even the store-sold items are extremely generous by MMO standards. In an MMO that shares a first name with a popular late-night-tv-host, a costume piece costs as much or more than ours, but is available for only 1 character, doesn't level up with that character, and counts against your (very) limited inventory count (pay more to boost that). There also aren't bonuses given to "non-subscribers that buy a lot" and subscribers just get a discount, not free points for the store.
Maybe the issue isn't the # of sales, but that the devs are too generous with what they offer?
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Originally Posted by Chase_Arcanum
1) MANY of the sales of the game weren't box- they were digital preorders directly from the NCSoft store. Even if I paid the preorder back in May, legally you can't usually report it until its the revenue is fully realized (the item ordered is supplied to the client). That means that all the $$ gained by offering the pistols and demon summoning sets early to those that preorder probably wasn't realized until the quarter that the game shipped.
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Don't suppose there's a number to that "many", just so i can add to my notes.
Just to add an anecdote to that...having early access to those sets doesn't necessarily mean the GR code wasn't from a third party purchase. My memory is fuzzy on specifics but i do remember having early access to those but i don't remember paying money for it. Dang fuzzy memory. Anyone know if there was a deposit of some kind to get that early access?
I do know i bought my box from bestbuy.com. They had a launch day promo of $10 off if purchased online (i set it as a store pickup on launch day)
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The only way to get early access to pistols and demons was to pre-purchase GR on the NCSoft store. It wasn't a pre-order where you make a deposit. You had to pay the full cost up front. And it was only through NC, not third parties.
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Originally Posted by Pebblebrook
Don't suppose there's a number to that "many", just so i can add to my notes.
Just to add an anecdote to that...having early access to those sets doesn't necessarily mean the GR code wasn't from a third party purchase. My memory is fuzzy on specifics but i do remember having early access to those but i don't remember paying money for it. Dang fuzzy memory. Anyone know if there was a deposit of some kind to get that early access? I do know i bought my box from bestbuy.com. They had a launch day promo of $10 off if purchased online (i set it as a store pickup on launch day) |
@Quasadu
"We must prepare for DOOM and hope for FREEM." - SirFrederick
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http://goingrogue.cityofheroes.com/e...nd-preordering|
Originally Posted by Pebblebrook
Don't suppose there's a number to that "many", just so i can add to my notes.
Just to add an anecdote to that...having early access to those sets doesn't necessarily mean the GR code wasn't from a third party purchase. My memory is fuzzy on specifics but i do remember having early access to those but i don't remember paying money for it. Dang fuzzy memory. Anyone know if there was a deposit of some kind to get that early access? I do know i bought my box from bestbuy.com. They had a launch day promo of $10 off if purchased online (i set it as a store pickup on launch day) |
Prepurchasing was done through the NCSoft store and got you early access to the powersets.
Preordering via the different game shops had different promotions but did not give you early access to the powersets.
You could not prepurchase the "complete collection" but you could buy a "complete collection upgrade pack" once the expansion came out.
Some people prepurchased for access to the powersets, then bought the complete collection boxed set from the stores, figuring that once you add in the 30 "free days" it came with, the physical copy was "worth it." We call these people "committed" players. Use whichever definition of "committed" you prefer :P
...I can't find any other way these powersets would have been made available early, but my search-fu may be weak
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Our dev studio seems to have presented their position as very focused on the existing subscribers and/or those who held long-term subscriptions prior to Freedom's launch. I think that translates directly into the kind of thing you're describing above - being less generous with the things they sell us may have been considered off-putting to full subscribers.*|
Originally Posted by Chase_Arcanum
Maybe the issue isn't the # of sales, but that the devs are too generous with what they offer?
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There's a risk/reward thing going on here. Assuming a relatively stable subscriber base, keeping those subscribers happy while getting them to spend a bit more on store items may be a less risky but also less profitable option than going for a more "cutthroat" sales approach that may net more total income but risks alienating that stable subscriber base.
CoH has, from past comments, been something of an outlier in the nature of its long-term subscriber loyalty. That probably factored into their choices in this area.
*(To be honest, I do think they were overly generous with some of the benefits we were able to buy at Freedom launch, like extra inventory space. By making those expensive but account-wide instead of cheaper but per-character, they probably deprived themselves of ongoing income as existing players make new characters. I say that even as I wince at the notion of paying for such increases in an on-going way.)
Blue
American Steele: 50 BS/Inv
Nightfall: 50 DDD
Sable Slayer: 50 DM/Rgn
Fortune's Shadow: 50 Dark/Psi
WinterStrike: 47 Ice/Dev
Quantum Well: 43 Inv/EM
Twilit Destiny: 43 MA/DA
Red
Shadowslip: 50 DDC
Final Rest: 50 MA/Rgn
Abyssal Frost: 50 Ice/Dark
Golden Ember: 50 SM/FA
Thank you. Will have to go through my credit statements that month since i don't remember paying twice for GR. Maybe i cancelled the preorder before launch or something.
If CoH wasn't profitable, NCSoft would kill it.
CoH's first same-genre competitor increased revenue 1,000% (that's 10 times) by going F2P. But subs had become very, very, very low. And because the amount of the subs were very, very, very low; then ten times that amount was not that great... and they were still unprofitable! Then that competing studio was bought out by (another!) company and keeps that unprofitable game afloat as a foot-in-the-door loss-leader to have a presence in the US market.
People can brag about their revenue all they want, but until you see their total expenses... then you know practically nothing about the health of a company.
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That's not too surprising, since they kind of shot themselves in the foot by offering lifetime subscriptions at launch.|
Originally Posted by Zombie Man
CoH's first same-genre competitor increased revenue 1,000% (that's 10 times) by going F2P. But subs had become very, very, very low. And because the amount of the subs were very, very, very low; then ten times that amount was not that great... and they were still unprofitable! Then that competing studio was bought out by (another!) company and keeps that unprofitable game afloat as a foot-in-the-door loss-leader to have a presence in the US market.
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So launch revenue was high, and then dropped like a rock as most of the people who would have stuck with it long-term were already playing for free. I don't know if they counted those in the number of "subs", but they certainly didn't add to the revenue!
A lifetime sub offer at - or shortly after - the launch of a game should always be a warning sign.
@Golden Girl
City of Heroes comics and artwork
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To be fair, said company did make that offer during the height of the financial crisis, where credit to even established businesses was all but nonexistent. Preparing for launch is expensive, and most companies take out short-term lines of credit to get them through that hump. Without that avenue available, offering lifetime subs was probably the only way they could launch at all.
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Originally Posted by Golden Girl
A lifetime sub offer at - or shortly after - the launch of a game should always be a warning sign.
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City has paid for itself probably tens of times over by now. Possibly even a hundred or hundreds. Yes.
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Originally Posted by Teeko
Good news!
But were they profitable is the REAL question. |
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Originally Posted by Dispari
I don't know why Dink thinks she's not as sexy as Jay was. In 5 posts she's already upstaged his entire career.
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Dude, we've gotten/are getting some of the biggest issues with the largest amounts of 'free stuff' in years since Freedom released.
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Originally Posted by Dark Energon
Let's just hope that this continues.
Time for VIPs to get their promised free content again. |
@True Metal
Co-leader of Callous Crew SG. Based on Union server.
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I'm pretty sure that Going Rogue was only available digitally to those of us outside the US, rather than having the choice of digital or boxed as in the US.
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Originally Posted by Pebblebrook
Don't suppose there's a number to that "many", just so i can add to my notes.
Just to add an anecdote to that...having early access to those sets doesn't necessarily mean the GR code wasn't from a third party purchase. My memory is fuzzy on specifics but i do remember having early access to those but i don't remember paying money for it. Dang fuzzy memory. Anyone know if there was a deposit of some kind to get that early access? I do know i bought my box from bestbuy.com. They had a launch day promo of $10 off if purchased online (i set it as a store pickup on launch day) |
But were they profitable is the REAL question.
Well none of them have closed, and they continue to update and stuff so...
Brawling Cactus from a distant planet.