I hate to say this...but, I think it's really over for our beloved game.

It's my belief the decision to cut CoH from the NCSoft stable was motivated more by potential shareholder response to NCSoft dipping $6million into the red in Q2 2012 than by any profitability (or otherwise) of Paragon Studios and CoH itself.

NCSoft invested heavily - and by heavily I mean HEAVILY -in Blade & Soul, particularly in marketing for its launch in Korea. On top of that, Aion has stopped pulling in the megabucks it used to, but the game still does have about 2.5million subscribers (though that has been declining steadily since its peak in mid 2009 of 4million) so ticking them off might not be a clever move...

So what options does that leave the bosses of NCSoft? Profits had been declining in pretty much a straight line from $39million profit in Q2 2011 down to a LOSS of $6.6million in Q2 2012. Loss in big business means push the panic button. Fast.

Axe Aion? No can do - too many subscribers, especially in the domestic market, and it is still at least vaguely profitable - besides, they're a little precious about Aion considering it was the flagship product that saw their profits soar in 2009 by a reported 836%...

Check out this graph -

-from this article published on August 8th 2012, just 3 weeks before the announcement of CoH's closure
http://mmofallout.com/2012/08/08/ncs...wn-revenue-up/

You can see from that graph that the line right at the bottom is Guild Wars - but axing Guild Wars was out of the question with its sequel just around the corner. CoH had effectively bottomed out - in profit/loss terms, it wasn't going to lose them any money, but it was extremely unlikely to bring them in more than it was currently doing.

In order to boost shareholder confidence the axe had to fall somewhere - and where better than half a world away? CoH looked stagnant on the graphs, and they wanted to send a clear message that their eyes were fixed solidly on the future. The dip in profits was a glitch, GW2 sales would recover those...but that would only show in the next quarter's results. Action was required NOW!

And so the axe fell on us.

Where does this leave the "future" of the game - or more precisely the IP? Well now there's the interesting thing...previously when NCSoft has canned a game (Tabula Rasa, Auto Assault) it came as no surprise, and no-one expected to see any trace of them again once they'd been scuttled and sent to the watery depths of Davy Jones' MMO locker. But CoH is a different matter...

Don't forget that NCSoft have steadfastly supported the franchise for 8 years now, through many ups and downs, including the acquisition from Cryptic. The same cannot be said of any other title they've canned. There is no question that the game will close on Nov 30th, the servers will be switched off, and CoH as we know it will have come to an end. But that doesn't necessarily the end of CoH itself.

NCSoft WILL make up the profits they lost this year - GW2 is such a success there's no doubt of that. So at the end of the day, I don't believe the decision to close CoH was a simple case of profit v loss, it was a decision motivated by fear of share prices falling.

Which means NCSoft never lost confidence in CoH at all.
Bizarre, no?
But that's business.

So if they didn't lose confidence in CoH there's no reason to suppose they don't still consider it an asset. Now, given that their declared intention is "not to support the franchise in future" because the company is taking "a different direction", there's every reason to suppose they'd be interested in selling said franchise on, seeing as their future direction is away from the genre.

Will they sell though?
TBH I have no idea. All we can do is wait to see what NCSoft do. And in the mean time, I will be spending what time we have left patrolling the streets of Paragon City

Thanks for the links.

I hope "Larry" isn't her financial adviser cause he can't read a quarterly or annual report if he confuses revenue with profit.

Second, stating again, Nexon does NOT own NCSoft. They own roughly 1/7th of NCSoft while "foreign" investors own nearly twice that. There's been no announcements about changes in the board of directors or senior management since the purchase.

The only "public" statements about aspects of the purchase, mentioned in phone transcripts of the quarterly investor's earning call, relates to a two year partnership where each company gets to "pick the brain" of the other about revenue generation and game design. Nexon uses a cash item shop only model. NCSoft's main source of income in Korea is from PC Bangs, where customers pay by the hour to play their games on top end gaming systems. Even in their other regions in Asia the standard method is by time card by number of hours a user wishes to play in a month. Two very different income models.

the real point is not the profit that they did make but the profit in relation with the money that they invested. For example if they invested £100,000,000 and they got a yearly profit of £ 1,000,000 they should have to close down the game post haste before the stockholders would hang them. Why? Simple because if they would deposit the money in a bank they would get at least twice that amount of money with the yearly interest and without any risk.

Yeah, I was seeing estimates in the 65k-80k range for a while. Some folks would throw out the 100k number, but that always seemed a bit dated, and felt like it was just one of those things that people mentioned later on because it had been mentioned in the past.

I knew I should have broken that down some rather than just laying it out there as 150k/year.

That's intended to be an "all-in" number. Dental, 401k, AD&D, Life, Health and whatever else is part of their benefits package. Add to that real estate, desktop hardware, software, energy bill, pens and whatever else is part of their operating expenses.

Now, I'm not going to try to come up with a summation of those various expenses that come up to $150k/year. Rather I'm just going to point back to my prior employer. I won't name them but you've heard of them and they had a very simplistic method of determining FTE expense for purposes of budgeting - a number very close to 150k (but not exactly). So this isn't a number I came up with, some finance dweebs did. There's a lot we don't know about Paragon's expenses, I'm simply offering a simple way to estimate expenses that I know is used within the industry.

I've had several friends working QA for different game companys in the southern california area and they all made anywhere in the low 30k to mid 40k (the one on the upper end was a lead for his team). The others were small companies, while the latter worked for a studio that made current generation console games for all 3 of the game consoles on the market.

Say whatever you will about when Melissa opens posts the PS studio books on line or how you've fingured exactly how much the game was losing money by, if the game was in such terrble condition, the entire studio wasn't operating in the manner as if it was.

If the game operated at a loss, then why would PS want to purchase the IP and keep the game going?

And in order to do so, they need financial backing, which means investors. How would you get money from investors on a product that has proven to be failing as some have ascertained?

If this game were operating at a loss, then why was it such a shock to every single employee at the studio, including management?

To, these things tell a different story than what some people think is going on with regards to the finances of this game.

While Mrs. Lackey's husband or whoever did their fact checking, they may not necessarily have a background in finance, but that doesn't mean he knows people who do, or people who can provide further information than what we have.

Trying to put down the information she provided because you think you know better doesn't prove you right either. This is a person of reknown character that has the respect of many people (not juts fans), and has offered her services in multiple ways to help save this game in one form or another. I'd say that places her head and heels above people that come to these boards and try to crap all over them with their "superior knowledge".