You may have killed City Of Heroes!

... but I'll get to that in a minute.....

I have no doubt that whatever the real reason is behind CoH being shut down .... we wouldn't like it very much.

I BELIEVE, as someone stated earlier, that the loss of CoH is simply an act to increase stock value for the shareholders. Companies are always under pressure to make stock look good. Yes, traditionally to look good they will turn a profit. However, layoffs, budget cuts, and all kinds of other sometimes questionable tactics are used to make people believe stock has greater value.

See stock prices ARE based on real things like assets, liabilities, and income potential, BUT are also often driven by perception - basically what people think the company is worth, what they are willing to pay, and will it make them money. Speculation.

Just as the stock price of NCSoft increased some 15% after the CoH closure announcement, they dropped again a week later. Perhaps a correction after the initial surge, or perhaps (as I like to believe) a reaction to the negative press they began to receive from the petition and the savecoh campaigns.

Lets toss some numbers around for fun. CoH I understand makes $10 million /year. Even if they put time, effort, and money into marketing to say... double that.... you're looking at $20 million/ year. A lot to you and I, but not so to a company "worth" around $5 billion. Simply announcing the "sunset" of CoH... their stock surged 15%... thats an increase in their "value" of $750 million!!!!

Funny huh? You and I see that as a loss of real income... but to them its a tiny investment increasing share value. (Probably netted the executives some nice bonuses at the same time).

So, why our City? CoH is really small in their arsenal of games. Sure Aion may be losing money (I don't know that - just heard it) - but it still has potential in sheer numbers of players. Aion was in the 1 million subscriber range at one point - CoH peaked around 150k with the most recent below the 50k mark. I could probably find other examples but I think you get the idea.

Assuming all of this is correct... the best plan of action would probably to continue the bad publicity and continue to tank NCsoft stock prices. Even if we can't save CoH - we can at least send a message for them to tread carefully in the future.

Still can't wrap your head around them throwing away $10 million /year? Consider the most valuable thing to a software company.... the people. The people are the most valuable thing they have. Where we see a great team of Zwill et al and the community as a whole, they can see a waste of resources. Like having a goose that can lay golden eggs only pumping out tin. "They are only making $10 mil /year? They should be making $100 mil!" Already it seems they have found positions for the Paragon staff in new projects. Again.... an investment sacrificing CoH to better use the staff elsewhere.

Now....

A lot of people have been blaming Nexon for this situation. Which is entirely reasonable, after all, at 14.7% they are the majority shareholder, and again, anything NCSoft has done has been to increase shareholder value. This got me thinking. Who else is a shareholder? There is another 85.3% of NCSoft floating out there. Is it possible... that WE own it? Could CoH players actually be the evil shareholders that we are up in arms about?

My first thought was to look at mutual funds. For those not familiar, a mutual fund is a group of stocks put together as a bundle by a financial institution. Most of us don't keep track of all the different companies in our mutual funds, but there can be dozens - or even hundreds. Likely companies you have heard of like Apple, Microsoft, and IBM, but also many you haven't heard of...

So, in Google I typed "ncsoft mutual fund". The first hit I got was American Century Investments, which indeed includes NCSoft shares in some of their mutual portfolios. I then Wiki'd American Century Investments and found that CIBC owns a 41% stake in them. A top Canadian bank, an American Investment company, and a Korean software company. Sounds almost like a crazy conspiracy theory, but just one small example of how, in a very real way, any of us can be the evil shareholder pressuring NCSOft to increase their stock prices.... without even knowing it.

I still keep hoping that NCSoft will change their mind (however unlikely) or that they will sell it (very unlikely), or that Titan can pull some magic trick out of their hat. I don't like the thought of my toons being killed off. I love this game and I know everyone wants a reason for its ending. I hope this can help even in a small way to understanding. Just like any relationship, it helps to have some kind of closure.

Let the trolling begin....

Professor plum with the wrench in the library

Right... like anyone in their right mind would trust their money with brokers these days.

What? Well... guess there's a lot of people out of their minds.

"Already it seems they have found positions for the Paragon staff in new projects. Again.... an investment sacrificing CoH to better use the staff elsewhere."

I keep seeing things like this written as well as "better use of resources".

Am I incorrect in my understanding of the Paragon Staff employment being terminated the day of the announcement?

That's not a better use of resources, that's eliminate income plus profit (minimal or otherwise), as well as eliminate the positions that income was funding while losing any profits.

I checked out NCSoft stock a few days ago. It went up for about a week and a half then started back down again. It's value is now below what it was before the announcement.

First let's ignore the fact that the surge was likely due to Guild Wars 2 with one million pre-sales launching a few days before our announcement. Second the closure of City of Heroes simply wasn't reported in Korea, on NCSoft's corporate web site or even their game site (unlike the rejection notice last week) or on Korean MMO gaming sites or investor news sites. Our closer was a non-event in the eyes of the Korean investment community.

Yes, there should be a minor mention in the next quarterly report, buried among the footnotes compared to the highlighting of Guild Wars 2 sales which brings that quarter back to profitability. We are small fish. We are a coral atoll while their other games are continental land masses. The loss of our little island will be overshadowed by the newly discovered land of Guild Wars 2.

As for who else owns NCSoft, that's public record. First only 28% is owned by foreign investors. 10% is own my management, which is the founder/CEO/Director (he had 25% but sold 15% to Nexon); 9% by the national pension, 15% by domestic institutions, 13% by individuals and the remaining 9% the company is sitting on. So sure we might through some mutual fund in our 401K own a fraction of NCSoft, but we aren't Warren Buffet and don't own enough of anything to actually influence anyone.

Torment and Agony doesn't often day trade, but when he does, he wears a tinfoil hat.

I admit I only skimmed, but just to be sure I caught the gist of it... we should blame Canada, right?

First Hans Island, and now City of Heroes. Is nothing sacred??

(disclaimer: I'm not being entirely serious)