Paragon Studio fell under the NC Interactive subsidiary. ArenaNet is it's own subsidiary and Carbine Studios is under the parent company. It's possible that NC Interactive was mandated to reduce costs by X% and they decided it was easiest to shutter Paragon. There actually may be other staff reductions going on at NC Interactive but those don't make the same news splash as a studio closure. As far as I know, NC Interactive is in charge of the NA versions of Lineage II and Aion as well as maintaining the NA forums, websites and servers.
Note: NC Interactive are likely working on a NA translation for Blade & Soul.
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Not if the studio involved is also spending resources on some second, secret project and confidence in that projects progress combined with CoH not getting the expected revenue bounce from F2p means it is no longer viable.|
Originally Posted by Chyll
Quite possibly true.
But, very odd to cut if off at the knees this quickly, particularly with the items in the pipeline (packs and powers set and costums) that we would have paid for if they'd let us while quietly shutting things down in the back ground and then sunsetting after taking the cash. It is all just... odd. |
This is all outsider speculation of course. I've no idea what that second project even was.
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There's a part of this theory that is potentially viable. Even if CoH was profitable, its possible that on a per-server basis it generated the least amount of revenue, and NCSoft wanted to release those servers for games with a better revenue per server footprint.|
Originally Posted by Local_Man
OK, here is my theory, based in part on the corporate-speak from the announcement. (1) We know that Guild Wars 2 is having major server issues. GW2 is supposed to be a big money maker for NC Soft, but they have stopped selling on line due to the server issues. (2) We know that CoH was making a profit, but not a huge profit. CoH was not shut down because it was losing money. (3) We know that corporations are all about making a profit. (4) By the crappy way NC Soft handled the situation, we can assume that they made a quick decision and may have had a deadline. We know that the Devs had no idea this was coming.
So, what if the corporations wanted to re-purpose the CoH servers to use for GW2 in time for Christmas sales? CoH is an old game that probably won't last too much longer (in their view) and only generates a small profit while it uses assets (servers) that could be re-purposed to make a bigger profit. Considering the losses suffered by NC Soft, they might have decided to re-purpose the CoH servers rather than make new ones to deal with the GW2 Demand. NC Soft may not have anticipated (a) the server demand for GW2 and (b) the cash losses from Aion. If they had plenty of cash, they could have built new servers. But with a shortage of cash, they needed to find a way to provide servers for GW2 without spending cash. Leasing would be more expensive than re-purposing assets they already had and were using for a less-profitable purpose. I don't know what would be involved in revising the servers to run GW2, but the rest of this theory seems to fit the corporate mind-set and the timing and the poor way in which it was handled. They had to rush to give the 3 month closing time for City of Heroes to be complete before the Christmas season. By shutting down some marginally profitable assets and changing them over, they will make more profit without incurring a significant cost. It is kind of like a store that sells off slow-moving merchandise at a loss to clear inventory space and cash to buy new merchandise that will sell faster and turn a greater profit. |
A small problem with that theory is that servers don't cost a lot really. NCSoft is probably saving more cash on payroll reductions. Between shutdown and Nov 30th my guess is NCSoft eliminated over a million dollars of expenses, over half of that direct cash flow (payroll taxes, deferred compensation, and the like would not impact cash flow instantly). If GW2 needed a couple more servers leasing those would have had a comparatively small impact on cash flow. That suggests that even if cash flow was a problem, the immediate shutdown of Paragon Studios was the primary goal, and the timing of the sunset of the game is not significantly important.
A bigger problem with this theory is that a cash flow problem for a company the size of NCSoft that makes you incapable of leasing a bunch of servers is a problem so serious it places the entire company in immediate jeopardy. Its one thing for NCSoft to decide it doesn't want to spend money on Paragon Studios anymore. Its another thing to say it can't buy servers and is forced to shutter a studio. That would be comparable to McDonalds removing Fillet o Fish sandwiches from their menu because they no longer had the cash to buy fish.
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This|
Originally Posted by Arcanaville
There's a part of this theory that is potentially viable. Even if CoH was profitable, its possible that on a per-server basis it generated the least amount of revenue, and NCSoft wanted to release those servers for games with a better revenue per server footprint.
A small problem with that theory is that servers don't cost a lot really. NCSoft is probably saving more cash on payroll reductions. Between shutdown and Nov 30th my guess is NCSoft eliminated over a million dollars of expenses, over half of that direct cash flow (payroll taxes, deferred compensation, and the like would not impact cash flow instantly). If GW2 needed a couple more servers leasing those would have had a comparatively small impact on cash flow. That suggests that even if cash flow was a problem, the immediate shutdown of Paragon Studios was the primary goal, and the timing of the sunset of the game is not significantly important. A bigger problem with this theory is that a cash flow problem for a company the size of NCSoft that makes you incapable of leasing a bunch of servers is a problem so serious it places the entire company in immediate jeopardy. Its one thing for NCSoft to decide it doesn't want to spend money on Paragon Studios anymore. Its another thing to say it can't buy servers and is forced to shutter a studio. That would be comparable to McDonalds removing Fillet o Fish sandwiches from their menu because they no longer had the cash to buy fish. |
If they really needed the servers they could have had them provisioned in considerably less than three months.
Also as far as can be told CoH was net revenue positive. Killing it is going to increase costs in the short term not decrease them.
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Originally Posted by LightSide
Unless it was a cash flow issue at NCSoft, possibly brought on by the bad financial results mentioned earlier. When you are bleeding cash to the extent that it's a serious issue, the fix is to cauterize immediately... not to take time to maximize the return on previous investments.
It could be the issue was the need at the corporate level to cut cash expenditures (including payroll at Paragon Studios) as opposed to the relatively low P&L return provided by CoH. We might never know the real reason, or there could be more than one factor, but what ever it was, it made sense to them based on the information they had and their perspective. |
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Originally Posted by Carnifax_NA
Not if the studio involved is also spending resources on some second, secret project and confidence in that projects progress combined with CoH not getting the expected revenue bounce from F2p means it is no longer viable.
This is all outsider speculation of course. I've no idea what that second project even was. |
City of Heroes was my first MMO, & my favorite computer game.
R.I.P.
Chyll - Bydand - Violynce - Enyrgos - Rylle - Nephryte - Solyd - Fettyr - Hyposhock - Styrling - Beryllos - Rosyc
Horryd - Myriam - Dysquiet - Ghyr
Vanysh - Eldrytch
Inflyct - Mysron - Orphyn - Dysmay - Reapyr - - Wyldeman - Hydeous
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Milk the cash cow for all its worth.
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Originally Posted by Chyll
Yeah, but even then (If I were in charge and trying to get all the cash out of it I could before ruining your fun), I'd give it a 6-month sunset internally, quietly shelf any development, start a layoff process to cut costs, and take your money as you were blissfully unaware for the items currently in flight (Bio Armor et al. that I'd already invested resources into)... and then pull the plug.
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If the cow is only producing a dribble a day then you may be better off bringing Daisy to the slaughter house.|
Originally Posted by Another_Fan
Milk the cash cow for all its worth.
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It's an inaccurate analogy but the point kind of stands.
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But to Arcanaville's earlier point. I'd still get the bulk of the real savings - people - and actually keep the cash that is coming in (as little as it may be) ... coming in.|
Originally Posted by Carnifax_NA
If the cow is only producing a dribble a day then you may be better off bringing Daisy to the slaughter house.
It's an inaccurate analogy but the point kind of stands. |
I work in a major corporation and in my experience this seems like a panic reaction rather than acting with an analyzed plan. Which probably means the cash flow issue is the real culprit and is either pretty significant or someone important said 'ax it' off-the-cuff so the minions axed it post-haste (which sadly is pretty plausible, in my experience).
City of Heroes was my first MMO, & my favorite computer game.
R.I.P.
Chyll - Bydand - Violynce - Enyrgos - Rylle - Nephryte - Solyd - Fettyr - Hyposhock - Styrling - Beryllos - Rosyc
Horryd - Myriam - Dysquiet - Ghyr
Vanysh - Eldrytch
Inflyct - Mysron - Orphyn - Dysmay - Reapyr - - Wyldeman - Hydeous
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I understand what you are saying but shuttering a company is not a free action. If it doesn't have assets that you can/are going to sell off it can be a very expensive action.|
Originally Posted by Carnifax_NA
If the cow is only producing a dribble a day then you may be better off bringing Daisy to the slaughter house.
It's an inaccurate analogy but the point kind of stands. |
As far as we know they are dropping CoH in the oubliette, paying a severance package to the contracted employees and then do whatever they think they can get away with regard to customer liability. I don't know maybe there's enough unspent points and prepaid subs that they think they will come out ahead.
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If the game itself was cash-flow positive, then by definition shutting down the game would hurt cash flow. So a theory based exclusively on cash flow is on shaky ground.|
Originally Posted by Carnifax_NA
If the cow is only producing a dribble a day then you may be better off bringing Daisy to the slaughter house.
It's an inaccurate analogy but the point kind of stands. |
What can help a company is acceleration. By shutting down Paragon Studios, many things get accelerated on an accrued basis. Depreciation can be immediately accelerated. But on the other hand, all the money we paid them could also be immediately accelerated even if they transferred that into alternate game credits: I'm not sure what the precise rules are for accounting for such things. But that could actually hurt NCSoft in the short term. When the dust settles, its not at all clear that there's a major accounting victory here, and it seems even less likely it would be a big enough victory to make a dent in NCSoft's finances. We just were not big enough to do that.
It may come down to reasons players are simply unlikely to accept. For example, its possible that NCSoft wanted CoH for two reasons: to see if they could expand the business large enough to be competitive with their larger titles, and to tap the development expertise into launching newer titles. We might have been profitable, but the upside on our game wasn't high enough to be interesting to NCSoft, and with their losses in other areas they decided they didn't want to fund a new MMO in the US. The combination of the two made CoH uninteresting to NC Corporate. And once it became uninteresting, it became a target for downsizing with internal reconsolidation.
Why shut down so abruptly? I can think of two logical reasons. The first is that maybe NCSoft was burned by previous shutdowns in some way that wasn't made public. People walked out with the rolodexes and laptops, say. Maybe corporate decided a while ago that the next time it happened, it would happen in a way that would prevent that.
The second reason is that they might have anticipated the players would try to save the game, and they wanted to minimize the ability for the players to do that without literally shutting everything down overnight. By pinkslipping the entire dev team, they put them in the position of having to find jobs quickly to feed their families, and the faster the dev team dispersed, the less likely it would be for the players to be able to save the game in its current form.
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This is basically my guess. A domino effect: New investors, change of focus, cancel the "Secret Project", Paragon no longer worthwhile to them and so CoH goes as the last domino.|
Originally Posted by Arcanaville
It may come down to reasons players are simply unlikely to accept. For example, its possible that NCSoft wanted CoH for two reasons: to see if they could expand the business large enough to be competitive with their larger titles, and to tap the development expertise into launching newer titles. We might have been profitable, but the upside on our game wasn't high enough to be interesting to NCSoft, and with their losses in other areas they decided they didn't want to fund a new MMO in the US. The combination of the two made CoH uninteresting to NC Corporate. And once it became uninteresting, it became a target for downsizing with internal reconsolidation.
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Why shut down so abruptly? I can think of two logical reasons. The first is that maybe NCSoft was burned by previous shutdowns in some way that wasn't made public. People walked out with the rolodexes and laptops, say. Maybe corporate decided a while ago that the next time it happened, it would happen in a way that would prevent that. The second reason is that they might have anticipated the players would try to save the game, and they wanted to minimize the ability for the players to do that without literally shutting everything down overnight. By pinkslipping the entire dev team, they put them in the position of having to find jobs quickly to feed their families, and the faster the dev team dispersed, the less likely it would be for the players to be able to save the game in its current form. |
Kosmos
Global: @Calorie
MA Arcs in 4-star purgatory: Four in a Row (#2198) - Hostile Takeover (#69714) - Red Harvest (#268305)
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Nope. Mrs. Animal and I are yearly subs, due in February (would have been, anyway.) We're both still VIP.
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Originally Posted by _Pine_
I believe people who had yearly subs got their subs canceled, and are now premiums. The only people that get this month as VIP are the one and three monthers. anyone else got chopped off.
I am not even sure if the year subscribers are getting refunds. |
I used to fiddle with my back feet music for a black onyx. My entire room absorbed every echo. The music was . . . thud like. The music was . . . thud like. I usually played such things as rough-neck and thug. Opaque melodies that would bug most people. Music from the other side of the fence.
Not to get political. But was wondering if the increase in healthcare cost under Obamacare would eat up the small profit CoH was making.
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Hmm, yeah, I think you need to get out more--or at least check your facts before making assumptions. Check out #5 here:|
Originally Posted by HolyCrusader777
Not to get political. But was wondering if the increase in healthcare cost under Obamacare would eat up the small profit CoH was making.
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http://www.dailyfinance.com/2012/07/...-and-debunked/
That is, of course, if you're treating Paragon Studies as a 'small business'. I don't think anyone has argued that the ACA is going to kill *large* businesses.
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Originally Posted by HolyCrusader777
Not to get political. But was wondering if the increase in healthcare cost under Obamacare would eat up the small profit CoH was making.
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My morning needed the brightening from that bit of humor. Thank you.
City of Heroes was my first MMO, & my favorite computer game.
R.I.P.
Chyll - Bydand - Violynce - Enyrgos - Rylle - Nephryte - Solyd - Fettyr - Hyposhock - Styrling - Beryllos - Rosyc
Horryd - Myriam - Dysquiet - Ghyr
Vanysh - Eldrytch
Inflyct - Mysron - Orphyn - Dysmay - Reapyr - - Wyldeman - Hydeous
I kinda feel Paragon Studios had an idea the pressure was on to take City of Heroes to a new level since the announcement of "Champions Online" and possibly "Marvel Universe Online", because that's when it seemed that NCSoft had dedicated more efforts to adding to the staff and funding for City of Heroes. This was around Issue 15, and since then... big changes came about that weren't previously possible with the limited staff.
As I evaluate what has transpired with the major improvements since and what was successful and what was not, I see a huge amount of upgrades that were pure win for new and existing players... but 1 major addition to the game that did not go over well that I'm sure cost a lot of time and money was: Praetoria.
I can only imagine that if all the time and money spent on Praetorian zones and content (regardless of how awesome they are) were instead spent on updating & creating content (TFs/SFs and events) for the existing zones with a new player experience (which eventually happened anyways: Atlas and Mercy) instead of further moving new players away from the existing where we would be now.
I know I tried hanging in Praetoria when GR was released for a while and helping new players, but those I helped and added as Global Friends seemed to just disappear too quickly.
Were the Praetorian zones really needed at this time over upgrades to the old zones or should they have waited until there was a demand for them? Based on their population on my server... I would venture to say they could have waited. Visiting Praetorian maps through stories, trials and task forces would've sufficed until then.
This is where I feel Paragon Studios failed on bringing in and retaining new players, and ultimately why NCSoft got frustrated to the point of shutting us down. Everything else they've done was pure win and successful for the existing playerbase.
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Wait what, this can't be a direct Won for Dollar comparison is there a ^X missing somewhere I refuse to believe that COX made only 12 US dollars in 2011, that doesn't make sense.
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Originally Posted by Fido1
Looking over the numbers shed some light into their thinking... if you can call it that. While Aion's sales dropped, it was still making more overall than CoH and with Guildwars 2 coming out to cover Guildwars.. it left CoH in the crosshairs.
I get why now, it was pure business... Do I like it? NO! Will NCSoft ever get any more of my money? OH HELL NO! |
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Actually only $10.9 million and $13.6 million in 2010.|
Originally Posted by detroitfrost
Wait what, this can't be a direct Won for Dollar comparison is there a ^X missing somewhere I refuse to believe that COX made only 12 US dollars in 2011, that doesn't make sense.
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Now if you look at the last time NCSoft reported monthly access numbers, which I assume is the number of accounts that logged in at least once, they reported just shy of 125,000 in a quarter (Q3 2008) that had revenues of $5.8 million. 2010 had revenues of $2.9, $3.0, $4.8 and $2.9 million in each quarter. The bump in the 3rd quarter lines up with the release of the Going Rogue expansion and box edition in stores. Q1, Q2 and Q4 of 2010 are each about half the revenues of Q3 2008 when NCSoft reported 125,000 players. Do the math.
Q1 and Q2 of 2011, also pre-Freedom had revenues of $2.7 and $2.6 million while Q3 which had only a month of Freedom was $2.6 million and Q4 was $3.0 million. Q1 and Q2 of 2010 had revenues less than their respective quarters from the previous year, $2.6 and $2.5 million.
Sure global economic downturn. NCSoft's big three suffered with greater % losses and every market region had lower revenues. But I assume that going F2P with an item shop didn't have the revenue impact they expected. After all when Lineage I added an item shop in 4Q 2009 NCSoft saw a 50+% sustained boost in the game's revenues.
However that said the "poor subscription revenues" in the NA region led to the plug being pulled on the NA Lineage I servers in Q2 2011. In Q2 2011 Lineage I had revenues world wide, when converted to US $, of $61 million. Yet they couldn't rationalize the costs keeping those NA servers running while the game is earning a ton of money elsewhere. So is it all that surprising they wouldn't just keep the servers up in a game that has only a 20th of that quarterly revenue?
Don't get me wrong. I love this game and I'm not sure what I'll do when the game and forums are shut down but don't kid yourself, the game wasn't bringing in the dough and in the end it's a business. It's an MMO in a niche genre with limited world wide appeal, where the conventional wisdom says MMOs are all about swords and wizards set in a fantasy world and not steampunk, noir and spandex set in the present real (okay, comic book real) world.
Father Xmas - Level 50 Ice/Ice Tanker - Victory
$725 and $1350 parts lists --- My guide to computer components
Tempus unum hominem manet
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Just adding to the quoted part. They defined monthly access numbers as "Monthly access: Number of unique users that log on at least once in the given month" the given month is the last month of every quarter named on the report.|
Originally Posted by Father Xmas
Now if you look at the last time NCSoft reported monthly access numbers, which I assume is the number of accounts that logged in at least once...
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So for 1Q that's logins from March and includes paid as well as non-paid (trial) accounts. Though the vast majority of those access numbers should be from paid (subs)
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we'll all really miss your amazing insider's knowledge and scintillating interpretation of NC's financial situation. It's really a terrific, important thing to dedicate 100% of your posting energy toward, and the community would have just been so much worse off without your tireless efforts to alert everyone to how bad everything was.|
Originally Posted by Pebblebrook
Just adding to the quoted part. They defined monthly access numbers as "Monthly access: Number of unique users that log on at least once in the given month" the given month is the last month of every quarter named on the report.
So for 1Q that's logins from March and includes paid as well as non-paid (trial) accounts. Though the vast majority of those access numbers should be from paid (subs) |
I only hope the next game you decide to gift with your joyous presence appreciates your efforts in the same way I have.
The Nethergoat Archive: all my memories, all my characters, all my thoughts on CoH...eventually.
My City Was Gone
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Between that and the death panels eliminating all the older subscribers, I would expect the next two things to shut down will be the GetOffMyLawn MMO and the state of Florida.
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Originally Posted by HolyCrusader777
Not to get political. But was wondering if the increase in healthcare cost under Obamacare would eat up the small profit CoH was making.
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Hey, don't shoot the messenger. It was only a matter of time when his cries of impending doom proved true, you can't deny the numbers. $10-12 million a year in revenues wasn't the kind of numbers NCSoft was willing to live with their "realignment of company focus and publishing support".
Father Xmas - Level 50 Ice/Ice Tanker - Victory
$725 and $1350 parts lists --- My guide to computer components
Tempus unum hominem manet
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I'm not, I'm lauding his single-minded obsession with "the numbers".|
Originally Posted by Father Xmas
Hey, don't shoot the messenger.
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It is a valuable public service he performs- if only *every* game had someone willing to make the financial health of the game the focus of every single one of their posts, the virtual world would be such a better place! So many silly people talking about playing on a game forum- what a waste of resources.
I'm a little curious though whether his next game will be a small-ish concern like this one, or one of the behemoths. A small game would certainly afford him much more ego gratification in the short term, however a larger one would allow him a much longer 'career', so to speak.
Decisions, decisions!
The Nethergoat Archive: all my memories, all my characters, all my thoughts on CoH...eventually.
My City Was Gone
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Not sure you can consider me a messenger...just simply having a discussion and using numbers for reference. But i guess it depends on people's frame of mind.|
Originally Posted by Father Xmas
Hey, don't shoot the messenger.
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So i take it from your reply that the goat is still stalking me with his berating sarcasm? Hehe, so glad i don't see that.
But, very odd to cut if off at the knees this quickly, particularly with the items in the pipeline (packs and powers set and costums) that we would have paid for if they'd let us while quietly shutting things down in the back ground and then sunsetting after taking the cash.
It is all just... odd.
It could be the issue was the need at the corporate level to cut cash expenditures (including payroll at Paragon Studios) as opposed to the relatively low P&L return provided by CoH. We might never know the real reason, or there could be more than one factor, but what ever it was, it made sense to them based on the information they had and their perspective.