Where is the logic in not selling the Game/IP, Ncsoft?
By
Brillig,
Posted on: 2012-09-04 14:20 in CoH and CoV General Discussions
In auto assault case it was not profitable , so they shelved it and kept it .
In tabula rasa case was one big personal feud , between NCSOFT and Lord Britain.
And in both cases I understand why they do not want to sell .
In CoH case the story is very different , it was meeting the deadline the profit margins .
So there was no excuse for this , sure it wasn't the biggest profit maker .
But also not the one responsible for losses .
I cannot imagine NCSOFT and Paragon Studios having a terrible west east working relationship , till that friday .
No matter the assumption or dirty laundry , I didn't think there were many .
Sorry if they want to move away from the western market and concentrate on the east.
They should let this IP go , since it has been a very loyal subject of NCSOFT , even at the shutdown , most were shocked !
If they cannot make this exception for CoH , I think they just made a biggest mistake ever as publisher .
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I do remember reading about Netdevil trying to buy the IP back. Too much money was asked/not enough was offered (take your pick), so the deal went nowhere.|
Originally Posted by Lonelyshade
In auto assault case it was not profitable , so they shelved it and kept it .
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| In tabula rasa case was one big personal feud , between NCSOFT and Lord Britain. |
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It doesn't mean they were willing to sell it. It means they were willing to name a price. It's quite common to name a ridiculously high price for something you don't really want to sell, just so you can say you acted in good faith.
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Originally Posted by Kitsune Knight
Which also means that they were willing to sell Auto Assault. I don't believe we have numbers, so we don't know if Netdevil (IIRC, that was the studio) was trying to buy it for crap, or NCSoft was having a Dr. Evil moment (not the time the UN laughed at time, the other time).
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"Null is as much an argument "for removing the cottage rule" as the moon being round is for buying tennis shoes." -Memphis Bill
(note I have not read the entire thread)
Well, they MAY be willing to sell it, but what reasons would they have to not sell?
Well, the first obvious one is competition, as you mention. Sure, they don’t have anything like that NOW. We don't know if they have decided to, in secret, start working in another super hero MMO, or something along those lines.
Another reason is pride. They may just fear that someone else may make the game more popular than they were able to. This may actually reflect badly on the company.
Final one is money. If we value the company using a basic 60% to 70% of revenue per year rule... and knowing that CoH brought about 10million last year and was about the same path this year, they may be able to get between 6 and 7 million valuations for the studio.
If they consider they can’t get that offer, they may feel they are better off keeping it and writing it off at the end of the quarter for tax purposes. I'm no accountant so I am not sure what the happy medium is there (they may be better off selling for 5 million than writing off 6 million.)
Remember: I'm no accountant, there are people certified to do this kind of valuation, I got that 60%/70% from this article, the section they talk about "most small businesses"
But at the end, their accounting may have a minimum price they can sell for where lower will be better off to just do a tax write-off than to sell.
Edit to add:
There may be another posibility. There MAY be plans to sell the company, or at least they may consider the posibility of it happening in years to come. At the point of such a transaction, it's better to have as large of an IP catalog as you can, even if the titles are not active.
The only logic in business is in their billing systems, and that's only because programmers had to translate creative accounting to something machines could understand.
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Not sure if you saying what I think you saying (that the game is canned because corporate accountants dont get it.)|
Originally Posted by Ogi
The only logic in business is in their billing systems, and that's only because programmers had to translate creative accounting to something machines could understand.
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I actually think it's the other way around. Guild Wars 1 was doing as bad, or worse, than CoH but that game did not get canned. Why? Because they see art and potential in it.
I suspect that a huge reason for the dismissal of CoH is that it did not meet some artistic/aesthetic they wanted the company to project.
Well why would they sell it, maybe they can lease it 3-5 yrs at a time, and then at a certain date, they could acquire the game/ip again.
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If there was logic in business they'd have tried* to sell CoH to get money on top of cutting expenses instead of burning off the good will of many former customers and cutting expenses.|
Originally Posted by Starsman
Not sure if you saying what I think you saying (that the game is canned because corporate accountants dont get it.)
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Some exec likely got told to do something** to cut costs, and they did.
*as in publicly announce they were trying to sell it, privately ask for an outrageous sum that no one would pay, then get to truthfully tell us "Sorry, no serious takers" and turn out the lights.
**Quick! Someone do something to someone!
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Not all Guild Wars earnings is reflected in the revenue number. Income from NCSoft's partners like The9 in asia shows up in a separate number under royalties. And, this part is a guess...i'm under the impression GW's operating costs are lower than CoX's.|
Originally Posted by Starsman
I actually think it's the other way around. Guild Wars 1 was doing as bad, or worse, than CoH but that game did not get canned.
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CoX doesn't have any distribution partners so all it's income shows up under revenue.
As for Exteel and Dungeon Runners I've no idea.
We've been saving Paragon City for eight and a half years. It's time to do it one more time.