A Business Focused View of NCSoft's Actions
By
Adeon Hawkwood,
Posted on: 2012-09-16 13:26 in CoH and CoV General Discussions
One must know the enemy before trying to figure out his actions.
Read the part about how South Koreans do business.
And here is some more information. You'll see that they don't think like 'us'.
Please buff Ice Control.
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The sub numbers/revenue was from the chart in the link. Steam numbers are from the main page of the site which someone also linked above.
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Originally Posted by Cag
Where did you get those figures from?
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Thanks GG, this is very good read. Especially consumer reactions.
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| The continuing work on new expansions (i24) and release of new powersets and in game content led to confidence in the health of the game. Many players came back or subscribed to VIP status as a result of these efforts, and felt particularly mislead by the abrupt and unpredicted closure announcement |
I will miss you City of Heroes..
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So... you're saying we should exchange business cards with the execs at NCSoft?
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Originally Posted by DarkCurrent
One must know the enemy before trying to figure out his actions.
Read the part about how South Koreans do business. And here is some more information. You'll see that they don't think like 'us'. |
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This is exactly a point I was going to mention. Thanks, ZM.|
Originally Posted by Zombie Man
...
And WRT the 60-80 employees Paragon Studios had: remember that a fair number of them were beginning work on a different project. CoH was once run by a skeleton crew of 15 Developers (and 5 Support). It could still continue nicely with perhaps just 30-40 developers. |
Why they wouldn't bother to shrink costs before just nuking the entire thing... I'm not going to bother listing the possibilities, i just know that I don't like it.
Regardless, the 80 paid employees isn't a be all end all representation of how much running CoH costs. I was very surprised when they retained so many people after Going Rogue, but many of them, eventually, were indeed transferred to the other project.
This applies to NCSoft's money towards Paragon Studios, but not singularly the CoH product.
It's just something to keep in mind when talking about the business realities. The game could be run for much less.
@Zethustra
"Now at midnight all the agents and the superhuman crew come out
and round up everyone that knows more than they do"-Dylan
and round up everyone that knows more than they do"-Dylan
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That depends. What's the going rate on business cards made of C4?
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Originally Posted by Zombie Man
So... you're saying we should exchange business cards with the execs at NCSoft?
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The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. It is a natural manure. -Thomas Jefferson
Read the Patriot newsletter. It's right, it's free.
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Okay. NO. |
Originally Posted by Riley_Delacroix
That depends. What's the going rate on business cards made of C4?
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STOP RIGHT THE F*** THERE.
I don't care WHAT NCSoft did, they don't rate even the HINT of violence, even jokingly! That's NOT HELPING.
(if you edit your post to remove that offensiveness then I will edit mine accordingly. I suggest you do so ASAP.)
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That article/blog also had a few things that were curious. |
Originally Posted by Zombie Man
No new information was added. No real industry analysis was added that was not already present on the forums here. Links were to fan-based responses... not to actual analytical data.
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It mentioned $146mil in sales but that doesn't look right when converting their total region sales to USD...though he may have mistakenly used the 146 billion KrW that was on the report. It also mentioned the "western market", which i take to mean NA and EU was less than 6% (though technically true) was actually more like 4.4% and that CoX's revenue the past 8 quarters was stable though the graph it included was showing a downward direction.
The article's wording does seem a bit skewed against NCSoft a bit.
Oh and it said CoX was switched to a hybrid model in June 2011 instead of September 2011.
So far it seems suspect...maybe i'll read it when i have more sleep.
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I wish this was small enough to become my new sig. This is the full honest truth and the funny thing is that some people will condemn you for this honesty.
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Originally Posted by Father Xmas
I respectively disagree with his assertion that our closure would hurt NCSoft in either the short or long term. We are a very small segment of even the NA MMO gamer population. The vow to never buy another NCSoft title is hardly a monolithic stance among us. Most MMO gamers realize that MMOs close, although true not as many that have been around for as long as CoH. While our organized efforts have been well publicized by MMO news sites, the shear amount of daily news quickly scrolls us off the front page. Same is true with the majority of celebrity re-tweets and posts on their websites.
It's not like NCSoft is powering their games with the hearts of dead orphans. There isn't some big social concern that would rally non-players of our game to our cause and join an NCSoft boycott. And when Blade & Soul and WildStar finally comes to the US, several thousand gamers, most who wouldn't be interested in those games for one reason or other, vowing not to buy it won't even register. It's the inverse of the pirating argument where publishers believe that every pirated equals a lost sale. Vowing to never buy from someone when they don't have anything you wanted anyways isn't a threat. And not buying into a wildly popular new game from them such as GW3 impacts the revenue that game is generating insignificantly enough to not be noticed. The problem is since we've lasted as long as we have, we believed that this game would be treated like Ultima Online or Everquest as one of the grand old, historically significant games that are limping along with a loyal player base. Yes we feel betrayed. Yes we are grieving at the loss of a world we routinely escape to but in the grand scheme of things we can barely make a ripple in the ocean of available revenue that all MMOs are fighting over. We can hope some benefactor will come forward and takeover from NCSoft and reconstitute at least part of the Paragon Studio team. But if you think our sudden closure or our vow to never spend money on another NCSoft game would actually harm them in someway, is wishful thinking at best, delusional at worst. |
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I was very interested in the bit about the possibility of legal action for those who paid 6/12 months subs if they knew they where going to close the game and still took the subs would this be classed as fraud.If so it will hit their rep really hard I would think,thankfully I paid mine monthly.
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Well, technically it does.|
Originally Posted by Father Xmas
I respectively disagree with his assertion that our closure would hurt NCSoft in either the short or long term.
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- All the severance packages.
- Unemployment
- Discharge of any existing debts
- Miscellaneous costs associated with the shutdown
- Legal fees
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| We are a very small segment of even the NA MMO gamer population. |
quote]The vow to never buy another NCSoft title is hardly a monolithic stance among us.[/quote]
True, but in my business classes I was always taught that an angry/disgruntled customer could influence a minimum of seven other people not to deal with my business. Shrugging off what could, potentially be tens or hundreds of thousands of sales...
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| Most MMO gamers realize that MMOs close, although true not as many that have been around for as long as CoH. While our organized efforts have been well publicized by MMO news sites, the shear amount of daily news quickly scrolls us off the front page. Same is true with the majority of celebrity re-tweets and posts on their websites. |
Clicking on the linked image above will take you off the City of Heroes site. However, the guides will be linked back here.
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Well, it depends; |
Originally Posted by JayboH
I wish this was small enough to become my new sig. This is the full honest truth and the funny thing is that some people will condemn you for this honesty.
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Originally Posted by Atlantea
Oh no. I think they WILL feel this. The effects will be subtle at first. But if we as an entire community decide that all bets are off and that our game is TRULY dead, and we decide as a community to go full - bore negative press assault mode?
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If CoH closes down for good, with no hope of revival, I intend to go full martyr on this. Whenever I hear someone mention a NCsoft game, I will point to CoH's death like the head of John the friggn Baptist and tell them what NCsoft does to still-running games. I will point them to the petitions, to the rallies, to I24 patch notes, to everything that showed just how vibrant the game had been, and tell them that this, this is what they should expect. That no matter what they want, no matter what they expect, no matter what makes sense to keep or kill, that one day, sooner rather than later, they will find themselves without the game they invested themselves in. With no fanfare, no explanation, no apologies, no bang, but only the whimper of "refocusing of direction". And I am far, far from the only one who will shout my warning to the other players, because between the interests of a company who takes away with far greater ease than it gives, and those of my fellow gamers, there is really no question where my focus lies.
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No. Current exchange rate is about 1100 Won to the Dollar.
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Originally Posted by Pebblebrook
It mentioned $146mil in sales but that doesn't look right when converting their total region sales to USD though he may have mistakenly used the 146 billion KrW that was on the report.
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Clicking on the linked image above will take you off the City of Heroes site. However, the guides will be linked back here.
Good article. Agrees with pretty much everything I've been saying. As for whether or not the closure hurts NCSoft, note that the article doesn't say how much it hurts them. One lost customer hurts the company - just not enough for the corporation to notice.
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Don't forget about what happened to Tabula Rasa; let people know about the reason for Richard Garriott's lawsuit. That NCSoft pulled an unscrupulous move to get him out of the company so they could kill off that game. And that the courts sided with Garriott. Several times.
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Originally Posted by Quinch
If CoH closes down for good, with no hope of revival, I intend to go full martyr on this. Whenever I hear someone mention a NCsoft game [...]
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Well a pound right now costs about $20. I'm not sure how you would make a believable business card out of it though.
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Originally Posted by Riley_Delacroix
That depends. What's the going rate on business cards made of C4?
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I don't doubt we here at City of Heroes won't make a dent on NCsoft's profits. I also don't have a doubt that we WILL make a dent on their public image, however. NCsoft has never been seen as a "good" company in the likes of Valve, but this move puts them basically on the level of EA and Ubi, and that kind of infamy has its consequences. It pretty much means that NCsoft will always be an underdog on the Western Market.
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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.
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NCSoft never does that sort of thing. They're of the mindset of get it over with already, don't just drag it out for several years.|
Originally Posted by Electric-Knight
Why they wouldn't bother to shrink costs before just nuking the entire thing...
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If you look at the graph, CoH was already trending downward even with very high development speeds, with a high rate of new items being released on the market. Some money spent on marketing would have probably done wonders to bring in fresh blood and might have reversed the downward trend... but NCSoft doesn't seem to do much of any marketing in the western world.
If they had cut down development, we'd have almost assuredly seen a steep drop for the following quarter and again the quarter after, as revenue from the Paragon Market starts heading towards zero (there won't be any new shines to buy, and everyone that's VIP would continue getting more than enough points to cover everything they wanted). VIPs would then be pretty much the only revenue stream. What percentage of players are VIP? I don't think there are any official numbers given by the devs, but it's obviously not 100%, which means a further drop.
If they had killed Paragon almost entirely, the expenses would drop massively. Likewise, I'd bet the revenue would drop fairly massively as well. Probably not as much or as quickly, but CoH would definitely be on the fast track to death at that point. And personally? I'd probably leave if they'd killed Paragon. I was here during the days of the Freem 15, I remember quite clearly what that was like. I like our Dev team quite a bit, and I doubt I'll find another community like this one... killing that would have been a major disincentive to staying.
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Originally Posted by ShadowNate
;_; ?!?! What the heck is wrong with you, my god, I have never been so confused in my life!
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The thing is, a downward trend is pretty much the norm for MMOs. Even the mighty WoW has slid from its heyday of 11 to 12 million to around 9 million now. Sure they'll get a spike from Mists, but that will not reverse the longterm trend. No game does - except EVE perhaps.|
Originally Posted by Kitsune Knight
If you look at the graph, CoH was already trending downward even with very high development speeds, with a high rate of new items being released on the market. Some money spent on marketing would have probably done wonders to bring in fresh blood and might have reversed the downward trend... but NCSoft doesn't seem to do much of any marketing in the western world.
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It seems likely that NCsoft were banking on a DDO/LOTRO style boost in profits when F2P came in, but DDO and LOTRO benefitted the most from that because they were essentially the first AAAs to make the transition and there was less competition when they did it - it doesn't stand to reason that every game that followed in their footsteps would do the same, and it's worryingly short sighted of the industry if they think otherwise - in much the same way that EA/BW deluded themselves into thinking their Star Wars WoW clone would generate WoW style profits.
As with most MMOs, CoH's figures were in decline, but comparitively slowly. In 2009 revenue was just under 3m per quarter, in 2012 it's just under 2.5m. Given the utterly disastrous under performance we've seen in other MMOs in that period - like APB, SWTOR, TSW - that's not bad going.
That's what surprises me, indeed I think that's what surprises almost everyone. CoH wa doing pretty well considering its age, and had they cut costs that were not directly contributing to CoH itself (start with the 'secret project') I see no reason why they couldn't have maintained a relatively steady income for a long time to come.
Of course it's also likely that NCsoft didn't want a steady income, and so will throw the money they 'save' by killing PS into other avenues that they think will give a better return.
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I'm still baffled why there doesn't seem to have ever been a serious attempt to reach out to the Japanese market for all eight years of CoH's run. I mean, I've come across evidence that Paragon City had its own Little Tokyo of sorts, from Japanese fansites and communities long dead.|
Originally Posted by Kitsune Knight
If you look at the graph, CoH was already trending downward even with very high development speeds, with a high rate of new items being released on the market. Some money spent on marketing would have probably done wonders to bring in fresh blood and might have reversed the downward trend... but NCSoft doesn't seem to do much of any marketing in the western world.
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It wouldn't be that hard selling the idea of CoH to the Japanese. The art style might not automatically appeal to them, but if it netted a lot of Japanese players in the past, surely they could have tried a more aggressive marketing campaign over there, right?
And if they were able to get a Korean version of CoH out there early on, how difficult would it have been to make a Japanese-language server?
This is grand and puts a huge black eye on NcSoft. Both Carbine and Arenanet are probably looking at the "out" clauses in their contracts "with" their products because they can certainly claim intentional corporate sabotage. Another burden of proof, that they knew they were going to do this, the NcSoft Game cards stopped promoting CoH and showcased only two games; Lineage 2 and Aion. NcSoft planned this and waited for the big Guild Wars 2 launch to carry it out so the NA market would look good for investors, but it was only a momentary spike.
What ticks me, like many others and this article stated, is subscription time. I am currently paid through October 2013. I did so wanting to see the end of the incarnate system and the final resolution of the Battalion. Based of the Dev panel such things were in the works. I do not want time in Aion (Guild Wars 2 is superior in every way) or Lineage 2 (GW2 PvP is superior in every way.) Nor will I be pre-ordering this obvious Final Fantasy clone Blade & Soul (again, GW2 is a smashing success why should I.) My main reason for saying no to all three of these games is what happened here.
At this point we are filming our farewell video for the game because we won't be back online (after Sept. 30th) until next year. Because of the continued silence I feel the damage has been done (crying as I type this). The Devs are dispersing into the workforce (I can't blame them in this economy), the players are dispering (those that had little invested anyway), and time is on NcSoft's side. They can now state its impossible to bring it back, and probably will. However, as the article states, the trust that the NA and European markets have in their company will tank. Hopefully, Arenanet and Carbine can escape with their games and future product relatively unscathed.
As for me, at this moment in time, I want one thing, my subscription time (after Nov. 30th) reimbursed (and not in subscription time for games that were tanking here and caused this mess to begin with.)
*gets off soapbox*
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And with the 15 developers/5 support staff (or how ever many it was), dont forget to add on the Community Team, who were NCsoft employed, and not Cryptic employed.|
Originally Posted by Zombie Man
Totally agree. Fan blog is fan blog. No new information was added. No real industry analysis was added that was not already present on the forums here. Links were to fan-based responses... not to actual analytical data.
I think we all agreed it was dumb to sink a profitable venture. And WRT the 60-80 employees Paragon Studios had: remember that a fair number of them were beginning work on a different project. CoH was once run by a skeleton crew of 15 Developers (and 5 Support). It could still continue nicely with perhaps just 30-40 developers. |
It wasn't until the management shake up when the Garriotts were ousted from their management roles, that the community management became the responsiblity of the studio developing the game and not the publisher. It is still in effect now, as you dont find the Lineage 2/Aion community people covering each other. Before the shake up, at least in the EU, i know that the CM's helped back each other up, so if one was away, someone else could easily step in to fill the breach.
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I agree.|
Originally Posted by EvilGeko
That was an interesting article, but I think the lack of authority in support weakens its impact considerably. Really, it could have been written by a fan of the game and it appears that it was.
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The author's analysis appears correct to me. For the most part, it's developed clearly. Even the tone, for the most part, is reasonable rather than blatantly hostile, something we haven't seen enough of in the past few days. It's a much better strategy to point out NCSoft's logical and business errors than to complain about how unjust its actions feel. A business can ignore one customer's feelings, but it can't get around logic so easily.
However, reading from the point of view an uninvolved third party, my reaction was, "Where's the proof?" Even some of the statements for which support was available, such as statements about the amount of negative press, didn't have citations to that support. This (incorrectly, in my view) calls the conclusions of the article into question. I don't expect it to influence anyone's analysis of the situation, which is unfortunate. Rather, I expect it to be written off by outsiders as the grumblings of a bitter fan. This isn't a fair or correct conclusion, but that's the one I expect.
In sum, while I'm mostly pleased with the article, and it certainly can't hurt the way things stand, I think players are exaggerating its impact.
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Interesting information indeed, but there's a serious lack of supportive evidence for things like CoH backlash impacting GW2 sales. While I'd agree that people are pist and many are likely Never going to touch another NCSoft product, I doubt that there are enough who won't purchase GW2 to impact sales numbers greatly.