Why? The Answer is in NCsoft's August 8th Earnings Report


Adelie

 

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Originally Posted by SpaceNut View Post
it's amazing now many people are commenting "I don't play anymore, but this still hurts".
I'm certainly guilty of this. But even if I played more I wouldn't have paid, so I don't think it would have helped the bottom line.


 

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When did this thread become the Def Poetry Jam?


 

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That earnings report issued on August 8th may have been the last straw, but it wasn't the entire story.

First of all Nexon, a Japanese toy company, became NCSoft's largest shareholder in June, 2012.

Then there's the fact that City of Heroes really hasn't been doing that well financially:

"Going F2P saw about a 20% jump in revenue. It certainly wasn’t in the realms of a several hundred percent increase claimed by other MMO companies who had also made that shift, but it was a positive step forward.

NCsoft has just released its Q1 2012 financial information and things aren’t that positive any more. To begin with, NCsoft saw declines of over 60% on both income and profit against the same time last year despite sales only being down about 9% over the same period, claiming a lot of increased variable expenses saw those profit figures drop."


So it was the big-wigs at Nexon who weren't getting as much money from their newest acquisition as they thought they would who are almost certainly the ones that made the decision to pull the plug on Paragon Studios and City of Heroes.


 

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Originally Posted by Gangrel_EU View Post
and the same could be extended for those who were by saving themselves money by buying multi-month subscription deals....sure, it was only a few dollars or pounds you were saving...

/sarcasm
In nearly 8 years, I have paid on a rolling 1 month renewal. Sure, I could have saved a little by subbing for 6 months etc, but I never did. I paid the full amount every month.


@FloatingFatMan

Do not go gentle into that good night.
Rage, rage against the dying of the light.

 

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Originally Posted by Peregrine_Falcon View Post
Then there's the fact that City of Heroes really hasn't been doing that well financially:

"Going F2P saw about a 20% jump in revenue. It certainly wasn’t in the realms of a several hundred percent increase claimed by other MMO companies who had also made that shift, but it was a positive step forward.
And this quote doesn't include that the revenue fell back the next quarter to the level it was before Freedom. It has stayed there for Q2 too.

This suggests that the F2P model pretty much failed.


 

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Originally Posted by Peregrine_Falcon View Post
That earnings report issued on August 8th may have been the last straw, but it wasn't the entire story.

First of all Nexon, a Japanese toy company, became NCSoft's largest shareholder in June, 2012.

Then there's the fact that City of Heroes really hasn't been doing that well financially:

"Going F2P saw about a 20% jump in revenue. It certainly wasn’t in the realms of a several hundred percent increase claimed by other MMO companies who had also made that shift, but it was a positive step forward.

NCsoft has just released its Q1 2012 financial information and things aren’t that positive any more. To begin with, NCsoft saw declines of over 60% on both income and profit against the same time last year despite sales only being down about 9% over the same period, claiming a lot of increased variable expenses saw those profit figures drop."


So it was the big-wigs at Nexon who weren't getting as much money from their newest acquisition as they thought they would who are almost certainly the ones that made the decision to pull the plug on Paragon Studios and City of Heroes.
Correction: Nexon didn't acquire NCSoft. They bought a 14.7% stake, which gives them a lot of clout and probably a seat on the board, but they're not the ones making the decisions.


 

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Originally Posted by Feycat View Post
Stupid. That doesn't make your point at all.

GW2 isn't shutting down sales because it's run out of servers. They had TWICE this many servers running during beta. They HAVE servers. They released only a limited amount in an attempt to control and balance population, so you don't have what you usually have in an MMO release, which is several very crowded servers, and a bunch of ghost-town servers that get worse and worse as the initial rush wears off. Since WvWvW is actually a very important part of their game design, keeping the server populations roughly even is actually a very important QOL point for the game.

They're shutting down sales because they're having infrastructure problems and want the game to be stable for the people who ALREADY paid for the game before they let it ramp up any further. And it will, because it's a great game.
"before they let it ramp up any further. And it will, because it's a great game"

I'm sure the GW2 developers wanted to initially screw over it's player base by releasing only a limited amount of servers so they'd have to turn off their market and have people wait in line for hours to log in and then sometimes randomly get kicked off? They're also pulled 20 hour work days for giggles on launch too right?

Mike O'Brien: "We’ve stress-tested every system in the game, but no stress test will get you to the point our servers are at right now with launch"

also this.

"To be clear, box and digital sales are still available via our retail partners. We are tracking our concurrency closely while expanding our infrastructure. We'll re-enable first-party digital sales as soon as we feel that we can do so safely," - ArenaNet.

So I guess if ARENANET THEMSELVES are saying they need to expand infrastructure, it's still not true right?

-Q4 FY2005 - GW had 16% (~about $13 Mill) of NC's revenue and US revenue was 27%, CoH had 18% of NC's revenue
-Q4 FY2006 - GW had 22% or NC's revenue (~$16 Mill), and CoH had 6% of Revenue and overall US revenue was 20%.
-YoY between '05 and '06 GW1 had a 27% increase in revenue and CoH had a 27% decrease in revenue.
-Q4 FY2007 - GW has 11% of NC's revenue (~$8 Mill) and CoH had 6% with overall US revenue being 17%.
-YoY '06-'07 GW had a 20% decline and CoH had a 6% decline.

NC figures they can get a 3 year squeeze at the least from GW2 like they GW1, and they figure the same thing will happen to CoH as it did when GW1 comes out. They also figure if GW1 has the same increase in sales/usage as the original did they'll need more infrastructure....line ARENANET THEMSELVES just said.


Cpt. Shwan.
Virtue, AR/Dev Blaster, lvl 50+3, 3300+ Hours logged.
Created 8/20/2004 - Proud Captain of Hero Dawn!

 

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Actually, I think the ANet team is trying to learn from SWTOR's mistakes. If you have enuogh servers to handle the first day traffic, they're going to be half empty in three months.

Although their overflow server is also a brilliant idea.


 

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Originally Posted by FloatingFatMan View Post
Lots of people are saying that. Forgive me, but... if you truly wanted to support the game, you'd have already been a paying subscriber.

Not pointing any fingers, but those who "were going to come back" have contributed greatly to this outcome.
That's just idiotic. That's like saying that if you really like...Big Bang Theory, and you intend to watch it again when the new season starts, well tough! You should have been watching the reruns that are on every single day of the week, streamed it online every day, watched video on-demand of BBT AND bought the DVDs! Otherwise, you just don't support them.

People tend to leave games and come back for new updates/expansions. Just look at WoW with Mists of Pandaria.


 

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Originally Posted by RavenGlenn View Post
That's just idiotic. That's like saying that if you really like...Big Bang Theory, and you intend to watch it again when the new season starts, well tough! You should have been watching the reruns that are on every single day of the week, streamed it online every day, watched video on-demand of BBT AND bought the DVDs! Otherwise, you just don't support them.

People tend to leave games and come back for new updates/expansions. Just look at WoW with Mists of Pandaria.
Thats...not like that at all. Now if you'd said "I wanted to see the Avengers" or something like that, something that you PAY for up front to support, then you might have had a correlation. As it stands, you're just upset because he is right. If you didn't pay, then you weren't supporting the game financially. Its not really a difficult concept.

As for WoW? I know plenty of people who aren't coming back to WoW. And while that may be anecdotal, what isn't is the three million people Cataclysm cost them. Wrath only lost 500,000 at its height, and yes Cataclysm regained those. Same won't be said of Mists, mark my words.


"I have something to say! It's better to burn out then to fade away!"

 

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Originally Posted by Brillig View Post
Correction: Nexon didn't acquire NCSoft.
Correction: I never said that Nexon acquired NCSoft.

They acquired 14.7% of NCSoft. That was their acquisition. And it may not seem like much, but as the largest shareholder they almost certainly have the clout to make many decisions, unless a large portion of the shareholders openly oppose a certain decision, which none of them would have any reason to do.


 

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Originally Posted by Peregrine_Falcon View Post
Correction: I never said that Nexon acquired NCSoft.

They acquired 14.7% of NCSoft. That was their acquisition. And it may not seem like much, but as the largest shareholder they almost certainly have the clout to make many decisions, unless a large portion of the shareholders openly oppose a certain decision, which none of them would have any reason to do.
You have no understanding of corporate governance, I'll leave it at that.


 

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Originally Posted by Paladiamors View Post
As it stands, you're just upset because he is right. If you didn't pay, then you weren't supporting the game financially. Its not really a difficult concept.
He's not right. The way the genre works these days, no MMO that relied on retaining all of its players all of the time would survive past the first 6 months. People come and go - especially in games with F2P models, and that is, or should be, taken into account by the companies that run these games.

@FFM, you're pissed off and looking for someone to blame, but insinuating that those players who took breaks from the game are partly to blame for this is wrong headed and downright low, and stinks of the kind of "thou shalt have no other game but me" fundamentalism that is one of the worst things about MMO communities.


 

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Originally Posted by NightshadeLegree View Post
@FFM, you're pissed off and looking for someone to blame, but insinuating that those players who took breaks from the game are partly to blame for this is wrong headed and downright low, and stinks of the kind of "thou shalt have no other game but me" fundamentalism that is one of the worst things about MMO communities.
Says another freeloader.


@FloatingFatMan

Do not go gentle into that good night.
Rage, rage against the dying of the light.

 

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Originally Posted by FloatingFatMan View Post
Says another freeloader.
Be careful who you accuse of freeloading now... someone has already said that their payment *didn't* go out when it was meant to, and they only found out when they logged into the game, and were on (as you put it) freeloader status.

If they had just checked just a couple of hours earlier, they would have been able to resub without any problems (although it would have been interesting to say the least).

Of course... seeing as we don't know how reupping runs now, chances are you could well be a freeloader in terms of what is available to you.


 

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Originally Posted by FloatingFatMan View Post
Says another freeloader.
FFM, please, cut it out. Someone might not have a VIP sub, but perhaps they regularly put down money for points. I've taken breaks from the game before, including breaks where I've let my subscription lapse.

You want to call me a freeloader too, and blame me for not always staying subscribed being a contributory factor to the demise of a game I love?


 

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i was a paying subscriber, i borrowed money when i couldn't spare the subscription price when times were hard. Bottom line, if the numbers weren't there instead of saying POOF shut it down they should have worked on it. They had many options, they could've done the upcoming issue but added something huge to draw in new players, they could've redone things for the next issue after, they could have said ok we can't afford this free to play stuff y'all have to pay for it, and maybe subsidize with a free period, maybe give people a month. SOMETHING. You can't tell me that there was no way to save CoH
i'm sorry i'm a bit bitter i am...


 

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Originally Posted by FloatingFatMan View Post
Says another freeloader.
People go back and forth between games. I've drifted from the game myself and come back multiple times. If you play one game too long, you burn out and need something different. Happened with WoW, happened with CoH, hell it's even happening at the moment with BF3 for me.

Of course, I tended to forget to cancel subscriptions but being able to go back to a game and spend time in it again can be an incredibly refreshing change from most of the new garbage that is out there.

I wouldn't go so far as to call anyone a freeloader anyway. Those "freeloaders" are the people you are teaming with for TF's and making your community better. Give them a good enough experience and they become paying members or encourage their friends to join. With the current climate of crap games, a positive word-of-mouth recommendation has more weight then an advert.


Frankie says it best.

 

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Originally Posted by FloatingFatMan View Post
Says another freeloader.
Cry some more, fatty.

I bought the game, twice since I sometimes ran two accounts. I had two years worth of sub time over those accounts, much of it during the I13-15 period when the game really was dead on its feet. I've bought costume packs, and Going Rogue, and when CoH went F2P I paid up to unlock MMs and some character slots. My conscience is clear, and I and any other so-called 'freeloaders', have as much right to mourn what's happened to this game as you do.


 

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Originally Posted by NightshadeLegree View Post
He's not right. The way the genre works these days, no MMO that relied on retaining all of its players all of the time would survive past the first 6 months. People come and go - especially in games with F2P models, and that is, or should be, taken into account by the companies that run these games.

@FFM, you're pissed off and looking for someone to blame, but insinuating that those players who took breaks from the game are partly to blame for this is wrong headed and downright low, and stinks of the kind of "thou shalt have no other game but me" fundamentalism that is one of the worst things about MMO communities.
Except he IS right. Not entirely, mind you, but if you weren't paying in some way then you weren't supporting the game.

That being said, this decsion wasn't about money. City of Heroes was still profitable, even if it wasn't the MOST profitable. The excuse even SAID as much, that City of Heroes just didn't fit into their view of restructuring. Chances are it could have been doing as well as Aion and it may have still gotten the axe.


"I have something to say! It's better to burn out then to fade away!"

 

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Not entirely, mind you, but if you weren't paying in some way then you weren't supporting the game.
Hi. Some of us have other responsibilities than paying for a game that they're not currently playing. Like, say, eating. Doesn't cheapen the love, it's just called reality.


Doom.

Yep.

This is really doom.

 

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Originally Posted by Angry_Citizen View Post
Hi. Some of us have other responsibilities than paying for a game that they're not currently playing. Like, say, eating. Doesn't cheapen the love, it's just called reality.
Hi. I never said anything about not loving the game. Just said you weren't SUPPORTING it. Financially. And I am not blaming anyone, to be honest. I don't think this had anything to do with money. Just the need to make this quarter not look so rough.


"I have something to say! It's better to burn out then to fade away!"

 

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How would you know whether I'm "supporting" it or not? For all you know, in my absence, I'd turned several people onto the game and increased its playerbase, thus earning them more money than by simply subscribing. Don't tell me what I did and did not do like some sanctimonious shaming session. The game died for a lot of reasons, but it was not from a fickle fan base. Even having this conversation implies that accusation, so how about shutting up?


Doom.

Yep.

This is really doom.

 

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I only read the first five pages or so, so I'm sorry if this has been brought up.

But there IS one way in which axing Paragon Studios, a profitable venture, could itself be more profitable. It is about returns on investments: Every dollar that is spent on any project can be considered an investment into that project. The returns from that project are considered not in an absolute sense, but as a ratio to that investment. A "I put in one dollar, get one dollar and 50 cents back" type of ratio.

NCsoft is currently hemorrhaging money. If this is a fact, then which projects get funding becomes not about what is making money, but what can make more money for their investment. Of course, this assumption is a very big, jiggly, and hairy assumption that fringes on several things:

#1: The money that is no longer going to paragon studios will eventually be appropriated to other projects that are theoretically more profitable.

#2: The rather steady profit that CoH has will be negligible to the potential profits that can come from a new investment into another IP.

#3: NCsoft has something lined up that has the potential to actually be a large profit.

#4: That the current capital of NCsoft was not capable of pushing a sufficient investment alone on this alternate project.


From a business standpoint I wouldn't have made this decision due to one very large reason: It is a gamble. A move like this is capable of backfiring if the reapportioned investments have the same or less returns. The investments have to be profitable enough for the company to save enough face with the public that there won't be a overly negative backlash for killing off Superman. The investment also has to be substantially big enough that you'll get a large enough return to cover any deficits the company is getting, so it is a big gamble at that. Normally you would only make a move like this if one of two things were true:

*The new investment was a surefire thing and they care nothing for the people on the previous project and they don't have the capital to make this investment without axing things.

*They are panicking with what is the corporate equivalent to a mass PANCAKING of their pants.


And neither of them are really nice things to be true. The former is a poorer and heartless company that will lose a ton of face for their actions, and the latter is a panicking company that may have just dug it's own grave with that gamble. The more I think about this situation, the more I don't like it.



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Originally Posted by Arson_NA View Post
I wouldn't go so far as to call anyone a freeloader anyway. Those "freeloaders" are the people you are teaming with for TF's and making your community better. Give them a good enough experience and they become paying members or encourage their friends to join.

Except many didn't. In fact after years of providing them with the best MMO experience out there, they jumped at the chance to cancel their subs.

I even recall one person complaining how he couldn't afford to buy stuff from the store because he only made 70k a year.

Deadbeats are deadbeats.


No not every Prem was a freeloading deadbeat and it certainly isn't fair to lump them all under one overly broad generalization because many Prems spent more on the game each month buying stuff from the store than they would have just subscribing, but pretending there weren't any freeloading deadbeats is just foolishness.