NCSoft denied attempts at offers

Majority - a subset of a set consisting of more than half of the set's elements.

Nexon is a major share holder, the largest share holder but in terms of corporate ownership, not a majority, period. Also interesting is where Nexon got the stock. They didn't buy it off the market or directly from the company but it was from the CEO's personal holdings of which he sold roughly 60% of to Nexon. NCSoft didn't see a penny from this it was the CEO's personal payday.

The quarterly loss wasn't large. Yes it was the first in a very long time, longer than 8 years at least and it was a continuation of decreasing profits over the last several quarters.

Now factor in that the NA and EU regions revenues have decreased by 60% from 2009 to 2011 compared with an 8% growth in Asia. In the first half of 2012 NA and EU revenues dropped 30% from the first half of 2011 where Asia dropped only 10%. So where would you cut? What markets would you concentrate on? This isn't rocket surgery here.

Blade and Soul was already done and was released at the end of Q2. Localizing it to NA and EU is a lot less expensive than developing a new game. Guild Wars 2 was in the final stages of Beta and from all accounts was getting very positive revues. So those two games are off the table because they are done or nearly done and I imagine they would like to see revenues from both of them to offset any development costs.

WildStar is a still a few years away but is under the main offices watchful eye, there may also be politics involved depending who in the main office is backing it. That leaves Paragon Studio and CoH. It's an old title and paid back it's development costs years ago. It didn't even get out of beta in Korea so revenue growth by spreading the game into Asia is already a no go. It's revenues in NA and EU have been decreasing over the years and F2P didn't reinvigorate them.

As for selling it off. First NCSoft had to get their people to come up with a fair market value, for their shareholder's sake, it's sort of required. They may have felt it wasn't worth the cost to compute a fair price. Also besides the game assets we are also talking about the player database, which are customers. One of the most valuable assets a company has is a list of their customers. No business wants to sell off their customer list to a direct competitor. They would likely charge per head for that information and we're talking everyone who ever played or signed up for a demo. They would have to untangle that information from the master accounts and still maintain the links to the player database of characters and purchased items from the store.

But likely none of the offers reached a point that NCSoft would go ahead with the assessment of what the property was worth and it would likely not be finished before the game was shut down. And if a price was reached, the sale made and the game saved, the game would be without any of the existing developers, the new owners would have to rebuild a staff from scratch to maintain the game.

Three months is just to short of a period a time to build a relationship with NCSoft so they would even consider an offer for the game. You can't just show up in their lobby with a $25 million dollar bank check and have them take you seriously.

Father Xmas, in a widely held corporation, 15% ownership is a LOT of power. No, they couldn't push something through that the other shareholders opposed, but they can easily provide leadership to a lot of the others. Plus, if it was a sale directly from the President - there's almost certainly more of the story there, definitely representations made about how the company is going and perhaps setting the stage for a merger or forms of joint operations. So if Nexon is unhappy, they can pull together other unhappy shareholders, perhaps can sue the President based on promises made, and pull out of future deals. They've got a lot of pull. Enough to say "do something significant" and make it happen.

And the way it was done gives the impression of a "do it now" emergency action. I've seen projects under fiscal pressure. Deadlines get delayed, things change to focus more on immediate money than long term good, lots of stress and everyone in the company knows. From everything we've heard, this was as big of a shock to the people of Paragon Studios as the players. This was a rush decision to close the studio, not a long "we're not happy with the numbers coming from this department".

As for your analysis of selling it off - when it comes to putting a fair value on something, you can look at what value you'll get out of it in the future, or what you can sell it for. When they put a game on a shelf, the use value is zero. The price of what you can sell it for is based on what people is offering, and you'll never know what people offer unless you talk to them. There are "standard" valuations based on run rates (yearly income) to use as a basis, for a distressed property a 1 or 2 year run rate is a pretty good price to aim for.

But what you've just made is the case for "eh, to hell with it, it's on the shelf and it'll stay there". If that's true, that makes their statement even more of a lie and more of an insult to the players.

City of Heroes was the little MMO that could.

First Jack tried to kill CoH to eliminate the competition for his next (far, far crummier) MMO, Champions Online. Remember how Cryptic went completely silent for like an entire year after CoV's launch?

Then NCSoft just goes out to kill CoH because they want more resources to their generic soulless korean pvp grinders. If Nexon gets involved, their pay2win generic soulless korean pvp grinders.

If they want to focus on those then more power to 'em. I'm supporting SOE (the horror) because DCUO > CO. And that Marvel MMO sure doesn't look all that good--I can already imagine the broadcasts. "glf Wolverine dps pst!" "group looking for Hulk to tank Magneto NO NO IRON MAN TANKS MAGNETO PWNS IRON MAN U NUBS HIS SUIT IS MADE OF METAL!"

I jus wanna make my own heroes--not play preexisting IPs. Working next to the big boys was the way to do it. Save "you are the big boy" for the single player games.

I understand. People want someone to blame, someone to point a finger at. But the suggestion that Nexon had it out for Paragon or City of Heroes specifically or western regions makes no sense. What did we do to them?

Quote:

Originally Posted by Turjan Back in 2005, NCSoft CEO and founder Taek-jin Kim gave away 3.84% of his stock to his then wife for agreeing to a divorce. He still owned 24.69% of his company's stock in June 2012 when he elected to sell 14.7% at below market price to Nexon. This leaves him with just 9.9% of his own company's stock, meaning Nexon's CEO has a greater say in NCSoft's affairs than Taek-jin Kim now does.

It may have been below market price but not by a lot. Nexon's press release about the sale was dated June 8th at 250,000 KrW in cash a share (not sure if it was released after trading ended for the week or at the start of the trading day). NCSoft's stock ranged between 239000 to 251500 (close at 250000) on the 5th, 6th was a holiday, 257500 to 272500 (close at 267000) on the 7th and 262000 to 272000 (close at 268000) on the 8th. So the discount, if at all, depends on when the sale actually took place.

And Nexon's CEO isn't on NCSoft's board of directors, Taek-jin Kim still is Chairman of the Board and CEO. Nexon doesn't have any members on the board either unless you are implying they now own Taek-jin Kim and he is simply their puppet now.

It's true that both companies are looking to smartphone gaming as the next frontier. You only need to look at the companies that Nexon and NCSoft have acquired over the last year. I think they decided until someone comes up with a formula that works, it's better to work together to find that formula than let someone else find it first.