please read.

Um, yes.

At the risk of going in circles here, a lot of us here have seen charts showing REVENUE coming in from CoH -- VIP subscriptions, money spent on Paragon Points, timecards and whatever else.

Has anybody seen/CAN anybody link anything concrete showing CoH's expenses such as salaries, rent for office space and equipment, insurance and everything else, OR anything else showing "net" income after expenses instead of the "gross" revenue numbers we've seen so far?

That would be nice.

Originally Posted by mauk2 Evil_Legacy became one of my favorite posters with two words. "Kick Rocks." I laffed so hard. Never change, E_L!

No, no one can give any concrete evidence on either side. However, we have had multiple second hand reports of Paragon personnel saying that the game was profitable and no one in a position of responsibility saying that it was not. With that being the only information available, I figure it probably was showing a profit.

Assuming that Paragon's employees averaged $60,000 a year salary, it cost roughly 4.8 million a year to pay them. I'm sure actual salary fluctuates above and below that, but it is unlikely that any of them were making more than $100,000 a year. Even if they were ALL making 100k a year their collective salaries would not exceed $8 million a year.

It has also been estimated that CoH was bringing in $3-4 million a month, for a total of roughly $42 million a year.

It is HIGHLY unlikely that operating costs for the game exceeded $38 million a year.

Hard facts? No. A reasonable estimate? Absolutely. Even if the game was only making $2 million a month and employee salary was $8 million a year there was still around $16 million to pay the rest of the operating costs out of. I would wager that the operating costs did not even come close to that, especially since they probably own the office space outright and have no rent to pay.

They clearly weren't spending much money on advertising, so that leaves equipment costs. Most equipment only needs to be bought once, so that's not a recurring expense. Utilities probably didn't eat into that much either.

Unless CoH's revenue completely tanked practically overnight (which, from all reports, was not the case), it is entirely reasonable to conclude that it was still turning a profit. A huge profit? Probably not, but it wasn't losing money either.

You don't need the exact numbers to come to the conclusion that CoH was not losing money. But we can't say how MUCH money it was bringing in either.

Originally Posted by Dechs Kaison See, it's gems like these that make me check Claws' post history every once in a while to make sure I haven't missed anything good lately.

You are off by a minimum of 30% for tech talent in that part of the country. Even if the dev team were bottom rung newbies you'd still be low by 20%. I have support desk workers making $65k in the Midwest.

We also don't know what, if any, continuing royalty payments were going back to Cryptic. And just speculative on my part, but shuttering the business entirely may have presented far more lucrative benefit to NCSoft for tax and closing cost consideration than either selling it or putting it on life support. Businesses often have more incentive to kill a line entirely due to all the write offs they can lump in there. And not having to pay huge severances per employee contracts.

Regardless of profitability, businesses only invest money in an entity that shows signs of growth. It's called return on investment. In today's economy, with interest rates so low, there's even more demand from investors to show a big return, as just "making money," when all you can get is 2% from same, isn't enough.

And nobody disputes that this game has been shrinking for years now. It wasn't an attractive investment for NCSoft any longer. And it won't be to anyone else either, other than as a hobby perhaps.

that would be very high - I'd have thought $35-45k would be nearer the average - remember it includes junior support and admin staff as well as senior developers. However other salary costs add to this - pensions, insurance, agency fees etc - roughly assume the same again as the salaries so you 6-8 million is probably of the right order still.

This again looks to be a serious overestimate - this would be the equivalent of over 200k VIPs or others spending a similar amount monthly.

office space would likely be a few 100k a year but even if they do own the building there are still costs involved as that capital cannot then be used to earn income.

equipment needs to be regularly replaced - assume office equipment will be depreciated over 3-5 years, computer equipment over 1-2, buildings over 10-50. As such it definitely is a recurring expense.

You are also totally neglecting the two largest expenses - data centre charges and bandwidth charges - those are probably in the order of 7 digits sums.

Then there's taxes and duties - neglect those and you go bust when the government comes knocking.

its not about it being profitable - its about it being sufficiently profitable. If you earn more from putting your cash in a bank than running the business then thats the better place for it if you are making decisions based solely on profits.


I'd suspect CoH was earning a profit but whether it was hitting the ROI required was probably borderline. - That doesn't mean to say someone else with lower corporate overheads couldn't make it work.


Personally I was expecting to see another couple of years with the game and possibly an option to bring out a successor but that's clearly not going to happen with NCSoft.
I'm still holding out some hope that a buyer will be found eventually but tbh I can't see it being completed this year - I'd expect Summer next year would be the earliest now as anyone taking over will need to build the studio back up - probably with new staff - and that is going to take time.

If NCSoft had looked at selling the game before closing the studio it would have been far more desirable as the support and knowledge would still be in place and would have been worth a lot more.

Slight correction here.

CoX's revenue last quarter was approximately $2,469,437 which gives about $822k per month. And that's not every month...it's down to that and likely to decrease still.

An estimate for 2012's total revenue for the year is looking to be in the high $9mil or low $10mil.

Current cost is not known and can change either direction, there seems to be signs of cost cutting on their part over the years but then there's some indication of increased cost from the f2p implementation.

The only cost number i have seen is 8 years out of date but it was $18mil/per year. That's probably not very helpful, i'm sure it's very different now but maybe some skilled number crunchers can get a ballpark figure from that.




Forbes article when CoH was new so i'm sure the cost to market the game has shrunk since.