Titan Network
Graveyard => Save Paragon Retirees => Save Paragon City! => Topic started by: omegaultima on October 16, 2012, 04:29:13 PM
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I just got this from the SaveCoH twitter: http://t.co/c1GuCSpH (http://t.co/c1GuCSpH)
The downside is that reportedly, we're losing people in game fast, and morale is going down.
We need a way to get more attention on this, fast. Anything that won't detract from our position, obviously.
Possibly dumb question, but have mass-mail requests for support been attempted in regards to some of the more public figures who might be able to help? Wishful thinking, yes, but an organized letter-writing campaign to people such as Stephen Colbert could get us major Public Awareness bonuses.
That's sadly all I'm able to think of at the moment, thought. Anyone else?
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Whoever anyone can think of to appeal to for support and coverage, I think it's most important to stress how underhanded and shady a corporation NCsoft is, especially because they're international with no roots in the Western Market. That might come off as xenophobic, but it's essentially the truth and you could garner a good bit of support from Western personalities that are proud of our industries over here. I mean, NCsoft really doesn't give a shit about us, so why not finally do some mudslinging and distortion of perception like all of the politicians love to do?
Always keep the fact present that we want to save City of Heroes, but also point out all of the other games and associated jobs that have suffered because of their gross mismanagement and unwillingness to adapt to the Western market. Being the latest victim with the largest and most passionate community of the 5 doomed MMO's makes us all the more relevant to those points.
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We are continuing to attempt to get the overt support of celebrities of any sort. If you know any, please reach out to them. There are several threads here with good letters and press releases that explain things clearly and concisely.
We are continuing to attempt to get the attention of the mainstream media. If you have any contacts, please reach out to them. Segev has an excellent press release in PDF form that you are welcome to use and disseminate.
We are continuing to reach out to other gamers, comics, and sf/f fan groups. If you have any contacts, please reach out to them. There are downloadable flyers you can use. There now a list of conventions you might be able to attend to distribute flyers and talk about the cause.
We are continuing to reach out to other special interest groups--parents of disabled children, adults with disabilities, people suffering from chronic pain, people suffering from psychological trauma who have found help within the game. If you have any contacts, please reach out to them. See the Testimonials thread for examples you can use of why they should care about the closing of this game.
At the moment it seems that our best option is to put so much external pressure on NCSoft that they become willing to sell the IP to someone who will actually care about the game and keep it running.
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We are continuing to attempt to get the overt support of celebrities of any sort. If you know any, please reach out to them. There are several threads here with good letters and press releases that explain things clearly and concisely.
We know Joaquin Phoenix played CoH in his mockumentary... not sure if it was part of the "mock" part or not, but it's worth a shot. I'm a regular civilian, though, so all I could find online was a snail mail address or two of agents or talent agencies related to him.
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http://tinyurl.com/9x9obxx
What about trying to appeal to game/tech people at news organizations like Todd Kenreck? (http://www.msnbc.msn.com/id/3033082/ns/technology_and_science-games/)
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If you have an idea try it. My 30 seconds of fame only works inside a limited platform. Outside that platform you are as effective as I am. If you get nowhere, say so, and see if someone else has a Kevin Bacon to get to the person in question.
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I've spoken in-game many times about this whole situation, and my personal take on it. Since this thread is an invitation for thoughts and ideas, this seems as appropriate as anywhere (other than a fresh topic) to share it here too.
Firstly a quick bit of background about myself. I work in Marketing (proper Marketing, not just advertising) specializing in Internet Marketing. Since 1997 it has been my full-time profession to build, buy, develop, and sell online businesses. I'm often hired to advise or assist companies in increasing their value prior to a sale or IPO (going public with shares), and frequently have guided companies all the way from start-up as a small business to setting up Internationally, or selling out to a global brand. This does not mean that my own opinions are always right, but it does mean I have a lot of experience and insights that may be relevant.
Now, here are my thoughts on the situation itself regarding NCsoft's decision to close Paragon Studios and CoH.
Point 1: NCsoft have no majority shareholder. The largest single shareholder in the company at the moment is Nexxon, who own less than 15%, having aquired 12% of NCsoft from the CEO back in June. This makes NCsoft something of a company run by committee, where no single party has anywhere near enough majority to see their own agenda through without support of other shareholders.
The decision to close CoH seems to have been taken very suddenly and swiftly after the purchase of that 12% share by Nexxon. I personally believe that until that time, the CEO of NCsoft had personally supported CoH, for many years, granting Paragon a lot of leeway and freedom to build their game. They'd even assigned extra developers to Paragon to develop new projects. That decision changed, swiftly, after the CEO of NCsoft ceased being the largest shareholder, with a larger holding at that time than Nexxon have now.
Suggestion 1: Teach people not to hate the CEO of NCsoft as the chances are he was our strongest supporter all these years.
Point 2: The board of directors at any publicly owned company have certain duties, foremost of which is a legal responsibility to look after the interests of the shareholders. As I mentioned already, there is no majority shareholder at NCsoft, so the shareholders may have mainly only one interest in common now - making money. It would thus be the duty of NCsoft's directors to serve the common interest of maximising profit and share prices for thse shareholders, even above their own wishes to have a flagship game that was something of a 'loss leader'.
Suggestion 2: Make sure people know not to blindly hate NCsoft, as they may be just as much a victim of circumstances as we are at this stage. They may not have much choice about closing Paragon unless we, collectively, can give them a realistic choice. The fact is that NCsoft stepped in and built and supported this game, with honor and a great amount of commitment for some years. While we know that has changed, we should not make assumptions about their motives if we don't mean to. They were our allies, and it is usually best to rebuild alliances rather than replace them. All the stuff about catching more flies with honey, etc, apply.
Point 3: One of the most commonly asked things I have seen is people wondering how closing a profitable business can possibly make sense. This is largely down to a thing called 'Opportunity Cost'. Let me explain it.
Imagine for a moment that I give you $10 to invest, and show you three people you can invest with.
The first has a great idea about superheroes, and says that for each $1 you invest with him, he'll turn that into $1.20 for you at the end of each year. That's a 20% growth every year. Wonderful.
However, the second guy I lead you to makes fantasy games that appeal to a wider base market, (it's mass-market over quality), but he can offer to turn every dollar you invest into $2 each year. He can double your money, because mass-market is, well, mass.
The Third guy just grins. He's name is Mr Nexxon, and he mainly invests in java-based games for browsers, facebook, and mobiles. These are dirt cheap to make compared to other games, and can yield mass-market profits even higher than the second guy's offer. He promises that for every dollar you invest with him, he'll give you 4 times your money back each year.
Now, here's where opportunity cost comes in. The way these get calculated is that for every dollar you invest with guy 1, you make 20 cents profit, but lose the opportunity to have made 3 dollars profit with that same dollar given to guy 3. The dollar spent to make back one dollar and twenty cents, cost you the opportunity to make back four dollars instead.
Now, you could take that ten dollars I gave you and put it all into the first offer because that guy was making something great. But the chances are that noone would ever again give you ten dollars to invest, because from their view, you're an idiot. From that ten dollars, each year you make 2 dollars profit and can't even buy me a dinner to thank me for the ten bucks. Instead of investing where you'd have made 40 dollars from the same 10 bucks. That, is opportunity cost.
If you put Investor's money into Paragon Studios, where it has all the higher costs of a US office, US staff on US wages, paying US taxes, etc ... Well, that's as much as it would have cost to make 10 games that could each have made back more money. Investors don't care if the game is fun, or of high quality. They care about the balance sheet. You only get a company chasing personal goals of quality when there is a majority shareholder who believes in that concept.
Suggestion 3: Its hard for some people to understand that the choice isn't between making some profit and no profit. Its about the degree of profit. A game that makes a profit is no good to shareholders if there's another game that makes more profit they could have invested in instead.
In a moment, I'll get to the positive of what we can do and why it is absolutely guaranteed to work if we can do it. Let me just address one other common question and misunderstanding first.
Point 4: Why have NCsoft not responded to offers to buy the IP? Well, because so far none of those offers have even come close to interesting them. This is not personal, it is business. Those shareholders follow the money. They obviously see more money from keeping the IP than from any offers made so far. I'm not surprised.
Remember me saying earlier about helping to build and sell companies as a part of my job? Well, traditionally tech companies are worth much more than service businesses, because of that intellectual property. Typically a tech company tends to be valued at between 2-5 times its annual turnover, depending on the amount of patents, copyrights, trademarks and such it has. Partly because owning those rights stops any competitor in the world from doing what you have the sole rights to.
Now, from what I've seen and understood of the financial state of Paragon Studios and CoH, as a company it would likely (my opinion and estimate only) be valued at around $100 million as a complete business to takeover. Remember, that's isn't to make a profit for shareholders, that's it reasonable value, so to speak. In my professional opinion, anything lower than a value of around $50 million would be a complete insult.
I can tell you that I know (but cannot divulge my sources) that none of the offers made to NCsoft for CoH were anywhere near even half of that. Steam offered something like $3million plus some profit share. Imagine how such an offer as that must come across to a people whjo are known to be concerned about saving face and not insulting people. Wow. I wouldn't even speak to such insulting people either.
The other offers were all ridiculously low too.
That's not Steam's fault. To them, CoH is seen mostly as low-hanging fruit, able to be easily plucked. A game that is 8 yrs old, with small profits, in an ever-increasingly competitive market, and with a declining customer base. Oh, and during a recession.
But NCsoft are notdesperate to sell. Remember the lesson about opportunity cost.
If you were a billionaire, what would you think CoH could be worth as an investment if you put work into it? I'd personally consider 100 million to be cheap. Very cheap.
I bet to even the most pessimistic at NCsoft, they would expect that if the retained the rights, they could at any time launch a new game, basically CoH2, and make at least $20 million on pre-orders alone. So how can selling that opportunity ever be worth less?
Suggestion 4: Understand that NCsoft don't need to sell. CoH is a trademark they invested in and gave value. It won awards and survived 8 yrs. The Battletech trademarks behind Mechwarrior survived dozens of failed old games and still made a fortune later with the Mechwarrior series. For NCsoft to sell, there has to be a commercial reason to sell. A perception that they make more from selling than from sitting on the rights.
Point 5: Here's where we start to get more positive about what we can do. It is a good thing, in the long run analysis, that shareholders chase the maximum profit. It makes them very, very predictable and easy to lead. Control the money and you control them, utterly. And we are the customers. We are the market, and the money.
They know you have the power, but they think you lack the determination or skill to use it. They fully predict that players of CoH will have a big tantrum, lots of threats to ragequit on all future NCsoft games, and then quietly go buy GW2. We already surprised them in this once, and forced them to make a public statement they'd obviously never originally intended to. But that statement was just a dismissive gesture to say "You tried, but it can't be saved. Lose faith and move on". Why? Because they are terrified that we won't.
Negative PR is very very expensive and tricky to deal with. A single TV ad campaign to do 'branding' to correct or build a positive about a company costs over $100 million just for the USA alone, and it usually takes several such campaigns to have a long-term effect. Japan is no cheaper really as they are even more awash with advertising, and so it takes all the more for something to stand out, or sink in.
So, a campaign to fix negative PR just in the US alone would be worth probably as much as the entire Paragon Studios and CoH company was. Think about that.
So, what we must do is make them see that closing CoH is the more expensive solution. It presents an opportunity cost of many hundreds of millions in increased spending to undo negative publicity that can affect not just future sales, but also the base share values of the company too. Remember how in the figures we've seen the entire Western market was only around 5% of all revenue for NCsoft? Well, share values have fallen 6% since the closure notice. If they could be persuaded that it was the closure of CoH that had caused that, well, it means that they lost 6% to make about 2%. In other words, it would be cheaper for them to have run all their Western market for free, no profit at all, than to lose 6% of their share value.
Suggestion 5: So, here's how we force that decision. Keep talking about this. More importantly, keep spreading the news about those who are. Link to stories from your own websites, facebook profiles, twitter posts, etc. All of these things mean that search engines see these stories as more important, more widespread. That in turn makes those stories and site rank higher in searches for relevant words like "NCsoft" or "MMO" etc. Meaning that when people search for 'NCsoft' as well as finding the official homepage, and some share prices, etc, there will be all the negative press we are creating. Stories about how NCsoft have a questionable reputation, making ill-considered decisions. Right where people who were investing in NCsoft shares (or games) were searching.
This will cause people to be less eager, less sure, about investing in NCsoft. That will affect share prices, and mean NCsoft need more advertising and marketing to persuade people. Suddenly, the opportunity cost of not selling CoH is massively higher than ever anticipated. At which point, those same money-minded people who pulled the plus on our beloved game have no sensible option but to find a solution. Even giving the IP away if they must. They will follow the money. And we, you, and I, control that money.
Keep the faith. The fact is that they think that when the servers go down, its all over. The opposite is true. WHen we keep fighting, keep talking, keep spreading the message about how NCsoft make bad business choices, after they'd expected it to be over it will be three times more effective. It shows them there is no end to this fight so long as one fool is left to fight it. And they don't have passion on their side. They won't fight for a loss. They follow the money. We are the market.
Thanks for bearing with me.
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Thank you Ammon, that was brilliant and badly needed. I'm making this post half to thank you, half to make sure this thread stays visible longer so others will read it. I've always been aware this is our weapon, but you've put it very well and done a good defusing some of the personal angle as well. This post needs to read often.
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You sir - are a GENIUS!!!
Not for saying anything we didn't already intrinsically know ourselves in terms of "negative publicity gets results" but in the detailed explanation as to WHY.
And also just HOW MUCH power we actually have!
I have practically no business acumen at all. But even I can see that SOMETHING FUNDAMENTAL CHANGED with the debacle between Bioware and it's fans in regard to Mass Effect! The publicity of how badly they had mangled the ending was SO BAD that it forced them to act. And it was largely due to the inter-connected social networking that fans now have access to. They CREATED a groundswell of bad publicity. And they discovered they had the power to make a change.
I took note of that very early on and tried to remind people not to despair, but to get more active! And we had an immediate advantage. We were already instantly connected through the game and through the forums and through peripheral forums and links. Mass Effect fans may have had forums and such, but they didn't have the game itself as a place to spread the word.
And we had TonyV, god bless him. And because of those factors, we got the ball rolling MUCH more quickly even than the Mass Effect efforts did by a factor of up to weeks.
Well the game is going away and the forums with them. But there's the Titan network and many many MANY new Facebook pages for COH people to follow. Not to mention twitter accounts etc. In fact this caused me for the first time to make a facebook account so I could more easily spread the word and memes around.
As to your other points.
The decision to close CoH seems to have been taken very suddenly and swiftly after the purchase of that 12% share by Nexxon. I personally believe that until that time, the CEO of NCsoft had personally supported CoH, for many years, granting Paragon a lot of leeway and freedom to build their game. They'd even assigned extra developers to Paragon to develop new projects. That decision changed, swiftly, after the CEO of NCsoft ceased being the largest shareholder, with a larger holding at that time than Nexxon have now.
Suggestion 1: Teach people not to hate the CEO of NCsoft as the chances are he was our strongest supporter all these years.
Well sorry, but I think it's a little late for that now. Besides, even if he was our supporter before, he is NOT OUR SUPPORTER NOW. I'm sorry, but I have utter contempt for a "supporter" who doesn't even give us the time of freaking day! It's not what he's done for us before that matters now.
If Taek Jin-Kim wants us to not rage-hate on him, then he'd better GOD DAMNED SPEAK THE HELL UP AND EXPLAIN HIMSELF to us personally! If everything you say is absolutely dead-on right and he came across as sincere in explaining much of the same situation you did and he deeply apologizes but there's nothing he CAN do since he sold his stock...
Well. Okay. He would get a PARTIAL pass from me. I wouldn't consider him the villain of the piece. But a hapless tool who should have known better. But that's as much as I'd be willing to give him.
Suggestion 2: Make sure people know not to blindly hate NCsoft, as they may be just as much a victim of circumstances as we are at this stage. They may not have much choice about closing Paragon unless we, collectively, can give them a realistic choice. The fact is that NCsoft stepped in and built and supported this game, with honor and a great amount of commitment for some years. While we know that has changed, we should not make assumptions about their motives if we don't mean to. They were our allies, and it is usually best to rebuild alliances rather than replace them. All the stuff about catching more flies with honey, etc, apply.
Way way WAY too late on this point. Sorry. NCSoft for all that we may have owed them in the past for keeping the game running, once again - that's PAST TENSE.
I very much like the point you made about negative publicity and how it's our tool to use. Which makes me confused as to why you would bother with the above point.
In fact all of your other points lead inexorably to the realization that spreading negativity about NCSoft and every product they own is EXACTLY what we need to be doing.
And more to the point - as far as negative publicity goes - it is VERY VERY GOOD TO HATE THEM. In fact, I want as much hatred of them to spread as far and wide and as fast as possible at this point.
Sometimes - just sometimes - hatred is a GOOD thing. A tool to be USED. A tool to be honed like a BLADE.
Mine is going for their jugular.
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Frankly, Ammon, I think this post needs to be stickied.
Not only for the sense and expertise behind it, but because you've given us two things we didn't have before:
You told us what, in your expert opinion, Paragon Studios plus the IP of CoH is worth
And
How much Valve offered for it. We didn't even know for sure they HAD offered anything.
In your opinion, is the IP of CoH still worth 100 million without a working studio behind it?
And in your opinion, can you guess how much the value of the IP will degrade over time (if any)?
This just hardens my resolve to make NCSoft the target of a personal ad campaign in every single one of my books from now on---books which are currently translated into: French, Japanese, Italian, German, Russian, Czech and Polish, and have their own separate UK publisher. I can do that with the Dedication: authors are traditionally allowed to write any sort of dedication they please and no one censors it. I can add a link to my website for a longer explanation of why, in my opinion, no one should ever again entrust their time, money and effort into a game created or owned by NCSoft.
There is only one book out of the 60-80 plus books that I have written that has ever gone out of print. Furthermore, that one will soon be back in print thanks to rights reversion and the Marion Zimmer Bradley trust which is putting it in e-book format.
What this means is that unless and until I actually ask my publishers to remove that dedication from the books I will be turning in from this moment on, it will never go away. Think of that: what is essentially a negative ad campaign that, while small in the eyes of the great world, nevertheless, costs me nothing and will never go away. And, I dunno, just what is the opinion of a New York Times bestselling writer worth? How many people is it likely to reach, I wonder?
I certainly hope NCSoft's PR firm, H&K, is watching these forums. I think I will just let that sink in for a while.
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Good points Ammon, but I have to ask.
1.) I think most of us agree if NCsoft were clear as to why the shut down would happen it wouldn't be so hard. So why not explain things? With this the game was making that 2% making means they were gaining. True if I were given $10 to invest right now I go with the higher return. But I'm not going to close the 401K I have going now to throw it at something new. NCsoft already invested in City of Heroes way back 8 years ago working with Cryptic. They bought Cryptics share so they Doubled the investment. Not only did they put $10 on City of heroes they added say $5 more (to by the cryptic ownership) To fully own the game IP. The Investment been made and were bringing in a that .20 on the investment. If they told Paragon studios to stop production of ISSUES and Store content that .20 would be .50 because funds to produce that extra content wouldn't be spent. By selling the IP they could then invest that lets go with $50 dollars using your example and put that to the high returns.
So by full shut down and not selling. Not only do they loose the .20 they also loose the chance to use the returns from the sell to reinvest.
2.) Hate against the CEO of NCsoft is more from the silent treatment and cold shoulder then the cut off. We have from day one accepted the fact NCsoft had the right to do this, just had no idea WHY do this. Tony V has made it clear to us to be respectful and not be the angry Mob. More Hero facing a threat then Villain on rampage. This is very hard to do but we are striving to follow his examples. If NCsoft came out with your explanation we might have accepted it. We Know this is a 8 year old franchise. We know the engine for the game is at least that old and the Devs as great as they are could only do so much.
A second reason for the NCsoft/CEO hate is that they gave the boot to our beloved Devs. This has caused more anger then the game shutdown I believe. One of the great things about City of Heroes was the Dev team was communicating and even the marketing who played hush hush with details had the Black Pebble as a voice to the players. A very open and honest way of doing things. Unlike NCsofts Don't call us, don't write us, you don't matter reactions. Sorry that anger slipped in there. Like I said we are used to an Open Honest approach from Paragon Studios. In a way they treated us as the Investors letting us know what was going on and what was being developed for our City. So when they were so harshly kicked out we Felt it, those were our friends and some might call our second family.
3.) From a Marketing view why didn't Ncsoft Advertise CoX more? many responses I seen on Facebook was "That's City of Heroes? Wish I knew about that game I would have joined up." or variations of "I played x amount of years ago I didn't know they were still around. I loved it then and hearing they been Updating regularly it's a whole new game." If done right they could have turned that .20 return to a higher profit margin.
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Thank you so much for the kind words. I'd really worried that posting so much would not have been so welcome, so thank you.
Allow me to respond to the comments and questions so far.
In your opinion, is the IP of CoH still worth 100 million without a working studio behind it?
And in your opinion, can you guess how much the value of the IP will degrade over time (if any)?
I truly would value the IP itself, including all of the trademarks, lore, etc, at around $15million to $20 million, but I do accept that in this my personal opinion adds a bias. Professionally, imagining if I were asked by a company what they should be willing to pay for it as a resource and business investment, I'd likely be more cautious and estimate $5 million to $6 million when it is divorced from Paragon Studios and from NCsoft given the current market conditions. But if asked by NCsoft what they should value it as, thus not divorced from their own trademarks and involvement and ability to make it succeed once before ... well its currently worth more to NCsoft than another buyer.
Over time, I would actually expect the value to increase in a way, because the current recession will not last forever. Right now, the fact that so many in the West are struggling to justify 'trivial' luxuries, like game subscriptions, with the economy as it is is actually making it less valuable in a way, and affecting the entire MMO and gaming market. In other words, over time I expect third-party estimates of its value to come up to NCsoft's value, or even overtake it.
Another reason that a 'change of focus' seems to be swinging more to the Asian market which is far far less affected by the current global recession, and is likely to be richer than ever compared to the Western market for at least the next 5 yrs. The fact that Marvel and DC have both been successful in hotting up the market in all things 'superhero' balances out currently between increased demand and awareness, against the fact that two leading brands are already supplying much of that demand, and make a high barrier to entry.
But in the longer term, I think alternate providers of 'superhero lore' that people are already familiar with will increase in value too. Likewise, while the current market thinking is that MMOs are in decline, fighting for ever small shares of a finite market that is somewhat saturated, I believe that this will reverse in time too. I think that CoH will grow in a kind of Retro appeal, and that our fondness for it will remain long after the feeling of betrayal and bitterness has faded somewhat.
It is very difficult to really put a value on these things because it really does depend on what it is wanted for. Trademarks and IP are subject to quite personal valuations that fluctuate massively with how the bidder envisions using the property. But one should always bear in mind that the domain name of business.com - with no actual site attached, just that domain name, sold for 200 million dollars some years back.
1.) I think most of us agree if NCsoft were clear as to why the shut down would happen it wouldn't be so hard. So why not explain things?
There are so many reasons likely to this that I could fill an entire thread with speculation. Let's say that part of it is that you don't talk about values of things, or what you might accept, unless you are sure noone would ever offer more. Another part is that with bad figures in Q2, looking like they actually needed or were particularly keen to sell CoH could have a negative effect on share values right away. You don't create speculation that you need money ... especially if you actually do. Generaly, companies keep their motives to themselves, and merely make up some good ones if they need to fix PR issues. Corporate secrecy is ingrained in corporate culture. More so when the company is publically traded.
2.) Hate against the CEO of NCsoft is more from the silent treatment and cold shoulder then the cut off. We have from day one accepted the fact NCsoft had the right to do this, just had no idea WHY do this. Tony V has made it clear to us to be respectful and not be the angry Mob.
Absolutely. Tony V was incredibly wise in this, and its one of the reasons I'm here to help, and believe that we can do this, and that this is the place to be sharing my thoughts and ideas on how.
It all comes back to that thing about no majority shareholder, and NCsoft being like a company run by committee. Everything is decided by votes. As we change the values, we'll start to swing more votes at NCsoft's meetings. I honestly do suspect that the CEO has been voting for CoH for some years. I'd hate to lose his vote at this stage and make it personal to him to oppose making the community happy. We need to keep the votes we had and win more through pressure. Not lose votes and turn people against us. The sooner we get a majority of those votes willing to sell cheaper, and the more generous some of those votes may be.
3.) From a Marketing view why didn't Ncsoft Advertise CoX more?
Did you hear how there was a separate version of the game for the home market? Well, in my experience, any company operating internationally always gives its own territory the lion's share of the marketing budget. So, here we have a Korean company, with great knowledge of the Asian market, and proven success, who would certainly have spent more marketing in their own country than anywhere, and who had it all fail spectacularly in that market they knew best.
Advertising is incredibly expensive. Its also very hit and miss. A famous quote is from Henry Ford who said "I know half of my marketing is working ... if only I knew which half". I know that early on, there were several experim,ents with marketing, and that CoH had a far larger marketing budget in the US and EU than it has had in recent years. And I know just as surely that the results of those expenses never justified the returns.
As I mentioned before, one single TV ad campaign, just in the US alone, tends to cost many tens of millions of dollars. That's like 5 years profit from CoH which may, or may not, even work. Companies work up to this sort of advertising with smaller 'test campaigns' in other media. It took WoW many many years to decide it could afford TV advertising, and that doing so would at least break even and reinforce their position as a market leader.
Quite simply, the test campaigns never justified larger experiments. Instead, CoH needed to leverage social media and viral marketing far sooner, and with more passion. It took them years to find Zwillinger, and even then I always had half a suspicion not everyone fully believed in what he was doing. I'd advised the UK branch of CoH to do a lot more marketing online before, particularly in social media and in viral, and they'd been blocked by the US office and head office from doing so.
Paragon Studios were awesome game developers with a passion, but it wasn't until Zwill joined that anyone was able to realise and leverage that. We always got the impression in the forums that they liked talking to us, but still regarded doing so as a distraction from their jobs, instead of as something that enabled and empowered them to do their jobs better.
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I'd have to disagree with you on a couple points, but I would love to hear your thoughts and if you can counter what I know.
It is the truism these days in the computer market that desktops are substantially going away, to be replaced by laptops, notebooks and tablets. To verify that, look how the price of desktops is plunging. City is designed to run (ideally) on a desktop; a laptop at worst. To that end, I would think the value of the IP is degrading, not rising, over time.
It is the truism among game studio people I have talked to that the days of the HUGE MMORPG are over. No one is going to get WoW numbers. Even WoW cannot get WoW numbers anymore (they are slowly losing players and income, income down over the last 4 quarters). People are going to perforce be competing for niche markets (which is not a bad thing, ask the candymakers who brought back Bonomo Turkish Taffy). But to that end also, the value of the IP is degrading, not rising. No one is going to be able to make 100 million dollars profit from City in less than...conservatively....10 years. And that assumes they can double the pre-August customer base.
Listening to SENSIBLE right and left wing economists, all are in agreement that the recession is the new normal, and that even the East is going to get hit with it. This is because the East is selling goods to consumers in the West, and the West doesn't have the money to buy them. To some extent, the East can sell itself the consumer goods the West used to buy, but that cycle can't go on for very long because wages are still a fraction of what they are in the West. So one day, probably soon, China and Korea are going to get smacked with what Japan is going through, and they, too, will have a hard time justifying visiting the BANG (internet) cafes for their MMO fix.
Your thoughts?
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Now, from what I've seen and understood of the financial state of Paragon Studios and CoH, as a company it would likely (my opinion and estimate only) be valued at around $100 million as a complete business to takeover. Remember, that's isn't to make a profit for shareholders, that's it reasonable value, so to speak. In my professional opinion, anything lower than a value of around $50 million would be a complete insult.
I don't understand how something can be worth so much more than the profit it made in 8 years(pretty sure that number is more, anyway). Then again, the prices some companies will pay for other companies often boggle my mind too.
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i been playing coh on a laptop since i started playing, 4.5 of the 6 years that i played coh were on the same comp (which i still have and use as my main comp)
once i get a more stable job and such i plan on building a nice gaming desktop, i do like laptops for mobility but there are serious limitations for gaming aspects of them
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I'd have to disagree with you on a couple points, but I would love to hear your thoughts and if you can counter what I know.
I'm sure that you have as much of an adoration for language as I do - particularly the English language, and how it lends itself to all sorts of creative play on words. I love the quirks of the language.
I'm minded of this because of two perfect examples of these quirks. I have always been amused that 'common sense' is generally good sense that is anything but common, whilst 'common knowledge' is usually very common, and not knowledge at all. :) The points you raise are all what I call 'conventional wisdom' which is very much akin to comon knowledge. It tends to be much more conventional than it is wise.
Yes, there is a massive growth in portable computing, but in large part this is in the capabilities rather than the divisions of market. Smart phones and tablets are getting smarter, and more capable of handling software that formerly only actual computers could possibly have managed. At the same time, realising that there are far more people with phones than with computers, companies have been striving to create leaner code that is better for this market - streaming video, java games, cloud hosting, and so on.
However, there are not actually any less desktop and laptop computers than there were. There are more. Its simply that people won't be as keen to upgrade their PC or laptop because, right now, they are just itching for the iPads and smart-phones a bit more. There are more PCs than ever, but people are making them last a bit longer.
Go into any gamers forum, facebook group, etc, and you'll find people showing off pictures of their latest gaming PC. Not their iPad or cell phone. Gamers like gaming rigs. Those are desktops, or better yet, full towers with lots of lights and fans. Something that can run for 48 hrs straight without needing to reboot, and certainly without overheating. Laptops are a little more casual, and for those who don't have the dedicated space for a gaming machine.
Yes, in the long term, the future of computing is about having it with you everywhere. I'd certainly suggest you have a look at Google Glass and other projects - mainly focused on making smart-glass and devices that are portable but hook into everything, giving everyone a sort of HUD aspect to information anywhere. But mainly the portable devices rely more than ever on a central hub somewhere. A Home PC server at the core that acts as the center and server for everything.
Meanwhile, the PC market isn't standing still either. Graphics are getting better and better, and customers expectations of graphics are rising. We expect our games to be full multi-media experiences now, with almost film-realistic quality visuals, great soundtracks, and professional actors. This is why a lot of investment has moved from PC games and console games into mobile/java app games. They have far lower expectations and are far, far cheaper to develop.
The PC gaming industry is fast becoming the new Movie Industry, with big budget productions that take years to complete. And if some are speculating that mobile is the end of the PC era, please remember back to when Betamax was claimed to be the end of cinema, and that within a few years all movies would be straight to home video. Don't hold your breath. :)
The 'truism' of the gaming industry regarding MMOs being over is just the final realisation that just because they all wanted to be the next WoW, never ever meant that every game could be WoW. One of the best things about CoH is that it predates WoW. It was a game made before the only motive for making an MMO was to be as successful as WoW. Instead, it was a game made to be a great game, a game made by and for people that love games. A game that won awards and pioneered and innovated. It was perhaps the last quality production made without investors basing the whole thing on mass-market appeal and a need to compare itself with WoW.
As you so rightly say, even WoW doesn't compare with WoW anymore. Its become a cliche of itself, playing its own cameo role of the worlds greatest geek MMO. Market share has declined largely because there is so very much choice competing for that same market. There's always a new shiney MMO that is attracting not new customers, but players of the other MMOs.
But here's what they don't say. Great games are what matters. And gameplay trumps graphics. Seriously, how many games other than an MMO has ever maintained player interest week after week for more than a year? Other than a group of guys gathering for Poker Night, not a lot.
Modern marketing and business is increasingly short-term. Ridiculously so. Everything is about the short term, and long term vision is no longer than a 5 year plan. Noone builds businesses thinking of empires to hand to their children anymore. Yes, this short-sightedness has caused the current economic woes, and it still hasn't changed. And this same 'big business' mentality is now what steers gaming too. What point in a game that lasts longer than the CPU that runs it? No game should be expected to have a life expectancy greater than the current technology, right?
They do not understand that some of us still enjoy firing up the original Sid Meirs Civillization and relishing that it had terrible graphics and superb gameplay. That we still are delighted to sometimes play the old games on a PS1, or even consider finding older games.
None of those pundits can tell you what we all know. That CoH is better today, after 8 years of play and development, than it was when it was first out. They cannot possibly comprehend that City is a game built on pride and passion for what could be built, not the desire to make a fast buck.
Remember that the intellectual property of City is not just the current game. City of Heroes is so much more than just its code. City of Heroes for the mobile is only possible with that IP. The CoH movie many people in the forums said they'd love to see? Only possible with the IP. More City of Books? Spin-off games of the PPD SWAT team, The game of the last days of the Kheldians? ALL dependant on that IP.
That's why I say the value of such is largely about what one wants to do with it. And what parts of it one is buying. Most buyers might want the lot even though they are only thinking of one part of use. NCsoft have a board of directors who's job it is to consider all possible uses and values of their IP. Right now, that's why I think they value it more highly than others do.
As for IP dating and degrading ... well, recently Robert Downey Junior made 2 films in a series that had nothing to do with Iron Man. There's a TV show called Elementary starring Lucy Liu that's also based on the same IP as the films I was mentioning. And an absolutely brilliant British TV show based on the same much used and ancient IP has been a massive success. So, tell me how much the value of Sherlock Holmes has decreased with time.
How about the current series of Red Dwarf X in the UK?
Was the Christian Bale batman worth less than the Keaton one, and less still than the Adam West version?
As a writer, you more than anyone are aware that great ideas last forever.
(And as an aside, that's a perfect moment to tell you how much I adored MZB ever since I first read my very first Darkover story)
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Well, I, for one, am hoping we can convince NCSoft that I am right and you are wrong--so we can get them to sell the IP at a bargain rate, and prove that you are right. I would much rather be wrong in this case, but getting the IP out of their clutches may in part depend on convincing them the value is degrading, not rising. Time to get out the Book of Five Rings and see if Sun Tzu can give us any guidance.
I am definitely in it for the long haul to make their lives as miserable as possible. After November 30, I fully intend to spend the time I used to spend gaming in hunting down every review of every NCSoft product and reminding people that it's not wise to invest your time and money in products produced by someone who has killed fully 1/3 of all of the MMOs ever canceled.
(And completely off-topic, you might like to know that the MZB Trust is currently putting all of her old out of print work into ebook format. A lot of it is pulpy, but there's a time when you want a beer and a pulp novel. And it appears my dear husband has the tag for doing covers for them all. He just finished the cover for Sword of Aldones, which later got rewritten into Sharra's Exile; some people prefer the original, and it's interesting to have both to see the changes she made.)
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I hope that future MMO publishers, and possibly the future holder of the CoH IP realizes that, the WoW, is an outlier of the bellcurve in MMO's.
That's the thing with the MMO industry, it really is a bell curve if you look at it. You have on one end, the older ones, like Ultima Online, Everquest that are still open but aren't bringing in as much, then the niche ones like The Secret World and Age of Conan, then the median ones (where MOST, like City of Heroes fall into) Then you get into where the monster WoW is... If you take the subscription numbers and put it in a program that calculates stuff like that you'll see the bell curve. Everyone WANTS the next WoW but they need to think that WoW is a statistical anomaly, even in the business world.
IMO, NCsoft would have had in their own right a "WoW type" monster IF they even managed to invest in ONE Pre-show commercial in the Avengers. ONE. A few million, but they would have brought in untold numbers of subscribers. Supers are the "in" thing now. Geek and superhero culture is taking off like wildfire. So I understand why they want to sit on the potential IP. I wonder if Infinite Game Publishing will put out a better offer once MWO takes off.
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So....on perusing a Cracked.com article on video-game addiction...I came across this--
http://english.yonhapnews.co.kr/Features/2010/01/13/48/0801000000AEN20100113009600315F.HTML
"Last month, South Korea's top court ruled that unlike online gambling -- games of luck that are banned by law in Korea -- acquiring game items takes time, effort and skill. Therefore, selling them is legal, as long as the real money that backs the trade goes through legal channels."
Is there some way we can use this? The highest court in Korea ruled in 2010 that all that time and effort we have put into purpling up, crafting up and enhancing up our toons is worth actual money.
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As much as I hope we could I doubt it.
Not only would we have not one but multiple nation laws, game laws, then there the game agreement. That does state they have the right to stop the game at their own whim.
So basically when we click agree we are signing over any rights to any monetary value of said in game items.
Thought I'm not skilled in any law jargon at all but that how I take it.
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I can tell you that I know (but cannot divulge my sources) that none of the offers made to NCsoft for CoH were anywhere near even half of that. Steam offered something like $3million plus some profit share. Imagine how such an offer as that must come across to a people whjo are known to be concerned about saving face and not insulting people. Wow. I wouldn't even speak to such insulting people either.
Ammon, would I be able to report that in an article I'm working on? I don't want to annoy your source.
Cheers.
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Advertising is incredibly expensive. Its also very hit and miss. A famous quote is from Henry Ford who said "I know half of my marketing is working ... if only I knew which half". I know that early on, there were several experim,ents with marketing, and that CoH had a far larger marketing budget in the US and EU than it has had in recent years. And I know just as surely that the results of those expenses never justified the returns.
As I mentioned before, one single TV ad campaign, just in the US alone, tends to cost many tens of millions of dollars. That's like 5 years profit from CoH which may, or may not, even work. Companies work up to this sort of advertising with smaller 'test campaigns' in other media. It took WoW many many years to decide it could afford TV advertising, and that doing so would at least break even and reinforce their position as a market leader.
Quite simply, the test campaigns never justified larger experiments. Instead, CoH needed to leverage social media and viral marketing far sooner, and with more passion. It took them years to find Zwillinger, and even then I always had half a suspicion not everyone fully believed in what he was doing. I'd advised the UK branch of CoH to do a lot more marketing online before, particularly in social media and in viral, and they'd been blocked by the US office and head office from doing so.
Paragon Studios were awesome game developers with a passion, but it wasn't until Zwill joined that anyone was able to realise and leverage that. We always got the impression in the forums that they liked talking to us, but still regarded doing so as a distraction from their jobs, instead of as something that enabled and empowered them to do their jobs better.
Sadly I think they prioritized other games more. There used to be a period very recently where I saw Aion ads on YouTube all the time (in the sidebar), I've never seen this for CoH.
Maybe Aion was lucky and it was the first time they used YouTube for advertising with it, while they had already cut CoH's budget completely due to past failures?
Or they support Aion more because it is so huge on their home market? =/
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Well, I'm hard to reach due to RL for a few days.
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Ammon, that is indeed a most rational and erudite description of the state of play you've laid out there - top job :)
It touches on a point I confess I've been feeling a little guilty about in my attempts to create the visual iconography for The MMOKiller (http://s1339.photobucket.com/albums/o714/MMOKiller/) and that's basically Taek-jin Kim's role in all this.
There's absolutely no doubt that TJKim was Tabula Rasa's strongest supporter. It was him who recruited the visionary Garriott brothers with an up front cash sum, and then doggedly backed them year after year, to the point it became a company injoke at functions when he announced that "Tabula Rasa will be coming out this year". I don't think he was doing so simply for the investment return - I truly believe TJKim is a visionary himself. He did after all create NCSoft and saw it rise from nothing to one of the two biggest gaming companies in Korea.
But I also believe he's a flawed visionary - or at least a visionary with a blind spot. As far as I can see, his Achilles' heel seems to centre around marketing and communications, a fact which would fit actually if one assumes he's a geek-type visionary. This explains his apparent singular inability to grasp the differences between Korean culture and the west (it also explains what benefit he's hoping to gain from getting into bed with the more marketing-savvy Nexon).
But he does support his company's creations, there's no doubt about that. Let's not forget that when Cryptic wanted to up stumps and head off to pastures new, NCSoft went to great effort to acquire the CoH IP and create Paragon Studios specifically to continue the support of the franchise. So when the CoH closure announcement said "The continued support of the franchise no longer fits with our long-term goals for the company", I found that to be the most telling phrase. It says to me that basically TJKim is no longer the one holding all the cards, pulling the strings, etc etc.
These "long term goals" are obviously the ones that coincide with Nexon's, and also explain the use of that wonderfully nebulous corporate phrase "a realignment of company focus and publishing support".
So from a certain perspective, it could seem that TJKim has been caught up in an escalation of events that are leaving him behind, almost like he's a victim himself...
...however...
...it was TJKim himself who elected to sell 2/3 of his personal NCSoft stock to largest rival Nexon, effectively entering both companies into a partnership. Kim created NCSoft, so this decision to essentially sell control of his own company to his biggest rival certainly was not taken lightly. So no, whatever's going on here, he can't really be seen as a victim. He knew what he was doing, and one must also assume that if he'd really wanted to keep CoH alive, it would still be alive today.
But yes, I still do feel a little guilty poking at him with visual gags. He has supported us diligently for eight years after all. But then I think "If I had a loyal dog for eight years and it suddenly turns round and bites me one day, would I still respect it? Trust it? I think not..."
I don't know if it's valid to snipe directly at Nexon with bad publicity (even though I actually already have with images like this (http://i1339.photobucket.com/albums/o714/MMOKiller/NCSoft%20the%20MMOKiller/voicesshutdown_zpscd61a311.jpg)... ;) ) but I'm definitely at the point now where I feel that while NCSoft have been our friend for years, any bad publicity they get from us now is their own doing not least for the fact that they're giving us the 'mushroom treatment' here when we've been paying them good money for nearly a decade.
So I certainly endorse the idea of forcing a "realignment of company focus" of our own by getting them to shell out to fix damaged PR. They've shown how much they valued our loyalty by turning round and biting us - perhaps it's time we showed them that we can bite back ;)
(btw, as an aside concerning visibility, when I Googled 'MMOKiller' just now, the second entry was the thread on this forum with the Photobucket account...perhaps I might put the word 'NCSoft' more prominently on the Photobucket account too)
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Point 3: One of the most commonly asked things I have seen is people wondering how closing a profitable business can possibly make sense. This is largely down to a thing called 'Opportunity Cost'. Let me explain it.
Imagine for a moment that I give you $10 to invest, and show you three people you can invest with.
The first has a great idea about superheroes, and says that for each $1 you invest with him, he'll turn that into $1.20 for you at the end of each year. That's a 20% growth every year. Wonderful.
However, the second guy I lead you to makes fantasy games that appeal to a wider base market, (it's mass-market over quality), but he can offer to turn every dollar you invest into $2 each year. He can double your money, because mass-market is, well, mass.
The Third guy just grins. He's name is Mr Nexxon, and he mainly invests in java-based games for browsers, facebook, and mobiles. These are dirt cheap to make compared to other games, and can yield mass-market profits even higher than the second guy's offer. He promises that for every dollar you invest with him, he'll give you 4 times your money back each year.
Now, here's where opportunity cost comes in. The way these get calculated is that for every dollar you invest with guy 1, you make 20 cents profit, but lose the opportunity to have made 3 dollars profit with that same dollar given to guy 3. The dollar spent to make back one dollar and twenty cents, cost you the opportunity to make back four dollars instead.
Now, you could take that ten dollars I gave you and put it all into the first offer because that guy was making something great. But the chances are that noone would ever again give you ten dollars to invest, because from their view, you're an idiot. From that ten dollars, each year you make 2 dollars profit and can't even buy me a dinner to thank me for the ten bucks. Instead of investing where you'd have made 40 dollars from the same 10 bucks. That, is opportunity cost.
If you put Investor's money into Paragon Studios, where it has all the higher costs of a US office, US staff on US wages, paying US taxes, etc ... Well, that's as much as it would have cost to make 10 games that could each have made back more money. Investors don't care if the game is fun, or of high quality. They care about the balance sheet. You only get a company chasing personal goals of quality when there is a majority shareholder who believes in that concept.
Suggestion 3: Its hard for some people to understand that the choice isn't between making some profit and no profit. Its about the degree of profit. A game that makes a profit is no good to shareholders if there's another game that makes more profit they could have invested in instead.
This is only true if you're not sitting on a pool of cash so large that you can do both. At this point any enterprise that makes more than you can otherwise make on the money markets is worth continuing with. I've seen several posts suggesting that NCSoft is hugely cash rich atm, so am slightly confused how this works.
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This is only true if you're not sitting on a pool of cash so large that you can do both. At this point any enterprise that makes more than you can otherwise make on the money markets is worth continuing with. I've seen several posts suggesting that NCSoft is hugely cash rich atm, so am slightly confused how this works.
Indeed it doesn't make sense.
http://global.ncsoft.com/global/ir/financial01.aspx (http://global.ncsoft.com/global/ir/financial01.aspx)
That's from year end, but unless NCSoft has somehow managed to blow through $577 million in the last 10 months, they should still have quite a bit of cash available. We'll know in a couple months.
To me, the only thing that makes any sense is that the company management wants to centralize all development in S. Korea for non-financial reasons. GW2 and Wildstar were too far along to kill without incurring massive losses, but as soon as those break even it wouldn't surprise me if ArenaNet and Carbine get gutted. Paragon was an easy target -- even if they were re-investing COH profits in the 'secret project', NCSoft corporate wasn't subsidizing that so they don't take a huge loss.
That seems to me to fit all the pieces of the puzzle -- "Realignment of company focus", financials not adding up, seeming unwillingness to consider selling despite interest from major investors, the inside reports about how their management operates on sites like glassdoor, and so on.
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The "my loyal dog turned and bit me after 8 years!" comment is why I have been strongly suggesting we leave an "out" for NCSoft and all involved if they capitulate. Leave them a way to not just salve the wounds we've given, but make it look like they bravely and brilliantly resolved things as the heroes of the tale. So long as the solution goes the way we want.
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We are continuing to attempt to get the overt support of celebrities of any sort. If you know any, please reach out to them. There are several threads here with good letters and press releases that explain things clearly and concisely.
Still trying, every time my dad says he's made plans to go over to Bobs he doesn't feel well that day. I told him to call his other friend that plays with him (Musician friend) and ask. He lives near Keego Harbor MI. I forget which city, one of the rich ones. He doesn't live far it's just a problem of timing. I'm sorry it's taking so long....
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I'm sorry it's taking so long....
No need to feel bad about it. Any help is certainly appreciated, but there's no need to press the issue. We've all got other things to think about that need to be taken care of. ;)
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Ammon, thanks profoundly for your analysis. I hope it gets the exposure it deserves around here.
So....on perusing a Cracked.com article on video-game addiction...I came across this--
http://english.yonhapnews.co.kr/Features/2010/01/13/48/0801000000AEN20100113009600315F.HTML
"Last month, South Korea's top court ruled that unlike online gambling -- games of luck that are banned by law in Korea -- acquiring game items takes time, effort and skill. Therefore, selling them is legal, as long as the real money that backs the trade goes through legal channels."
Is there some way we can use this? The highest court in Korea ruled in 2010 that all that time and effort we have put into purpling up, crafting up and enhancing up our toons is worth actual money.
As someone who deals with taxing authorities on a regular basis, I can say that this is a road we definitely don't want to take. The moment that unrealized in-game items start getting treated as property, we risk having to pay tax on gain from in-game sales or other gains with respect to those items.
I don't have a problem with paying tax on something like selling my account for real money, which is something the U.S. tax system taxes anyway. (The U.S. system requires me to pay tax on the gain from that sale even if it's illegal!) But I (and most people, I imagine) don't want to get into a situation where exchanging influence for an IO is potentially a taxable event because it's bartering of goods.
This is something the IRS has looked into from time to time, and the main reason it hasn't done more is that no one has provoked it into making the effort. (Well, that and the cost- surprising as it sounds, the IRS is chronically too short of funds to accomplish much of what it's ordered to do.)
I suspect the South Korean court didn't have to worry about those types of issues because the tax base involved in most Asian systems is explicitly focused on taxing the value exchanged in transactions rather than the gain to individual taxpayers.
I'm much more comfortable with the recognition of player IP rights in things like character appearances, biographies, AE arcs, and the like, which generally don't change hands for gain, than with something like this.
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Well, I, for one, am hoping we can convince NCSoft that I am right and you are wrong--so we can get them to sell the IP at a bargain rate, and prove that you are right.
As you rightly stated before, the current conventional thinking is that Mobile is the only way to go, and that MMOs are no longer a good investment. I merely state why I'm personally certain that this conventional wisdom is wrong. One of the reasons that I believe the IP will not degrade in value is because time will tell. Despite the predictions, another game will come along that disproves all the current trendy theories and investor models. If you wait long enough, the wheel always turns full circle. MMOs will come back into fashion, and again, will suddenly be overvalued again, despite all the lessons of the past years. That's simply how investors tend to be.
Ammon, would I be able to report that in an article I'm working on? I don't want to annoy your source.
Certainly, though of course it will just be 'hearsay' in so far as its just what I personally have testified about another. I'm keeping my source secret to prevent any of it hurting the source, so there's no danger of quoting me annoying or damaging my source.
It touches on a point I confess I've been feeling a little guilty about in my attempts to create the visual iconography for The MMOKiller (http://s1339.photobucket.com/albums/o714/MMOKiller/) and that's basically Taek-jin Kim's role in all this.
Don't feel guilty. As you say, his own decisions are what is being criticised, and rightly so. We are now in a fight, and even when two fighters respect each other, they still aim to hurt the other to win. Its our duty to hit him hard enough that we win. I merely say that you fight better when you understand your opponent, especially in why he is opposing you. Understanding the fact that TJK has made business decisions, and knowing what will make him fight harder, and what will make him throw in the towell more easily is what it is all about. :)
This is only true if you're not sitting on a pool of cash so large that you can do both. At this point any enterprise that makes more than you can otherwise make on the money markets is worth continuing with. I've seen several posts suggesting that NCSoft is hugely cash rich atm, so am slightly confused how this works.
No resource is ever infinite. All the money NCsoft have is allocated somewhere. And its someone's job to bet their entire career and professional reputation on allocating it where it can do the most. That person is the one who did not have faith in CoH or Paragon as a smart use of money for the next quarter, next year, etc.
As Victoria Victrix explained a few posts ago, the current thinking in the market of game makers is that mobile is the way to go, and that MMOs have had their day. Its like when the cancel a top TV series that is really popular - not because it no longer makes money, but because the costs have spiralled to the extent where despite being profitable, the costs in making that profit have grown to the extent that cheaper investments can make a lot more profit. The expectations of the MMO market make developing an MMO more expensive than it ever was, with people demanding top class graphics, and more depth of content than ever, which means way higher costs to develop. Its not that MMOs are dying, but it is seen that there are cheaper investments that yield a far higher ROI (return on investment). The Chief Financial Officer is not hired to allocate resources to games he loves. His job and duty is to allocate money to where it will give the most returns, and stop allocating money to where it yields lower returns than the desired threshold. Its not personal, its business.
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As Victoria Victrix explained a few posts ago, the current thinking in the market of game makers is that mobile is the way to go, and that MMOs have had their day. Its like when the cancel a top TV series that is really popular - not because it no longer makes money, but because the costs have spiralled to the extent where despite being profitable, the costs in making that profit have grown to the extent that cheaper investments can make a lot more profit. The expectations of the MMO market make developing an MMO more expensive than it ever was, with people demanding top class graphics, and more depth of content than ever, which means way higher costs to develop. Its not that MMOs are dying, but it is seen that there are cheaper investments that yield a far higher ROI (return on investment). The Chief Financial Officer is not hired to allocate resources to games he loves. His job and duty is to allocate money to where it will give the most returns, and stop allocating money to where it yields lower returns than the desired threshold. Its not personal, its business.
Safe there are no costs, it is self-funded.
it is literally "ok, I'm taking $10, and setting it on fire so noone else can have it."
Not good business practice.
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Safe there are no costs, it is self-funded.
Nothing in business or investment is 'safe'. Ever. Money itself is nothing more than a promise to give you back value later.
There are always costs. Self-funded means that it paid back what you put in, and happens after the fact, not before. To think that something has no costs, or is self funded is a fallacy that is very old, and the reason we have such old sayings as "Don't count your chickens before they are hatched".
See also all the stuff I explained earlier about opportunity costs.
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Its not personal, its business.
It's also not personal when your town gets blown up because a defective missile decided to level that instead of the strategic target a few blocks away.
Stop using "it's just business" as a means to excuse everything that business does. Since the recession began, I've had to hear that phrase uttered by somebody almost every single day. It's time for it to stop. The mindset has been going on for far too long and is an enabler for corruption. It's time for society to evolve, and time for people to start taking responsibility for their actions. Profit doesn't justify the means more than any other "end" does. Everyone needs to stop treating it like a god, wherein people are always 'righteous' and unanswerable to anyone, when they take action in its name.
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Nothing in business or investment is 'safe'. Ever. Money itself is nothing more than a promise to give you back value later.
There are always costs. Self-funded means that it paid back what you put in, and happens after the fact, not before. To think that something has no costs, or is self funded is a fallacy that is very old, and the reason we have such old sayings as "Don't count your chickens before they are hatched".
See also all the stuff I explained earlier about opportunity costs.
Should have been "save" not "safe."
NCSoft has not put money in to CoH in years according to their balance sheets. There was 0 money saved by closing it down, only money lost coming back from the studio.
The way they were funded:
Paragon Market collects funds. From these funds come the money to operate Paragon Studios. Money left over went to NCSoft.
Shutting down Paragon Studios and the game, no money goes in to Paragon Market.
Hence, no money is saved by this action, as the money to fund the studio is no longer being generated.
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I've seen the opportunity cost argument mentioned multiple times, and quite frankly, I have to admit I don't think it applies in this instance... if we have an accurate understanding of the financial situation.
In short, IF NCSoft's revenue stream from CoH continued _despite_ shutting down CoH, THEN the example provided and associated argument would hold water. It doesn't... this is a negative scenario for both cash flow and profitability, full stop.
This is not a situation where they already have the cash and are deciding what to spend it on. This cash stream is entirely dependent upon maintaining the service they have chosen to shut down. And if they're counting on sentiment and goodwill to maintain that revenue stream via their other products, well, I'd suggest they seek psychological counseling... that level of delusion is dangerous.
Now, if CoH was NOT profitable, different story. If they were looking at a required full-scale hardware replacement, another possibility. If somewhere along the line the viability of CoH and Paragon Studios' other project were entangled and conflated, definitely. Barring such additional considerations, however, I don't think the straightforward opportunity cost argument adds up.
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Stop using "it's just business" as a means to excuse everything that business does.
That is certainly not my intention. I am merely stating that not to excuse, or judge, but simply to say its purely about money. They don't care about your feelings, unless it affects their money. To use your own war analogy for a moment, in a war you are most likely to be shot by someone who shoots you because he is a soldier told to do so. He doesn't know you, or care about you. He may not even care about the cause of the war or any of the moral or political issues. At the end analysis, you get shot because he's doing what is expected of him as his job as a soldier. Doesn't make you any less shot, but it does help you understand what kinds of propaganda may or may not influence that soldier. If he shot you because he's paid to be a soldier and shoot you, all the political arguments in the world may not sway him. Instead just offer him a better paid job to shoot someone else.
I don't like that mercenary attitude, but that's beside the point. This is reality. Most people do some pretty poor things without a thought. Like foreclose on a mortgage not because they dislike you, or have any analysis or thought about it at all, but just because their manager told them to send a foreclosure form letter to every case in pile A. They are just 'doing their job'.
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No resource is ever infinite. All the money NCsoft have is allocated somewhere. And its someone's job to bet their entire career and professional reputation on allocating it where it can do the most. That person is the one who did not have faith in CoH or Paragon as a smart use of money for the next quarter, next year, etc.
What is your basis for saying that all of NCsoft's funds are allocated?
I've looked at their annual reports. NCsoft has had a large cash surplus the last 3 years at least. I haven't tracked down earlier reports as they don't have them linked anymore.
Opportunity costs would be a valid argument if they were strapped for cash, but they apparently have more of it than they know what to do with. Their current ratio is very, very high -- they have 50% more current assets than fixed assets, and 200% more than their total liabilities, including long-term.
If I was an investor, I'd be asking them (1) Why are they sitting on so much money instead of investing it? and (2) Why are they closing down profitable ventures when there's no immediate need for the funds elsewhere?
I did manage to find a more detailed breakdown -- as of Dec 31, 2011, they had 59.1 billion Won ($53.5m USD) in cash, and 423.6 billion Won ($383.6m USD) of "other" short-term (easily convertible to cash) assets. From the reports it looks like most of that is its own stock (213 billion Won worth of common stock) that it's bought back.
Oh, I found something veeeeery interesting. On Dec 31, 2011, NCSoft reported to their auditors that the total value of their "Industrial property rights" (alternate terminology for Intellectual Property) for the company, worldwide, was 2,220 million won - just over $2 million US. That's for all their IP, worldwide.
Most of NCSoft's intangibles are wrapped up in accrued Research & Development costs. That's probably what they stand to be able to write off by shutting down a studio.
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I don't like that mercenary attitude, but that's beside the point. This is reality. Most people do some pretty poor things without a thought. Like foreclose on a mortgage not because they dislike you, or have any analysis or thought about it at all, but just because their manager told them to send a foreclosure form letter to every case in pile A. They are just 'doing their job'.
'Reality' is a construct of society and is in a constant state of flux. We have the capability to change reality, at least as far as the elements of reality that would not exist were it not for humans.
Other factors need to exist in the minds of businesses besides profit. I'm not suggesting we can change that overnight, but things like "It's just business" or "They're just doing their job" excuses their actions. It's like we're telling them it's all good as long as they're doing it for profit. As if that is somehow 'better' than doing it in the name of a god, or nationalism, or (insert cause here).
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To take it to the extreme, "Just following orders" is often not considered a valid defense in war crimes trials.
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'Reality' is a construct of society and is in a constant state of flux. We have the capability to change reality, at least as far as the elements of reality that would not exist were it not for humans.
Other factors need to exist in the minds of businesses besides profit. I'm not suggesting we can change that overnight, but things like "It's just business" or "They're just doing their job" excuses their actions. It's like we're telling them it's all good as long as they're doing it for profit. As if that is somehow 'better' than doing it in the name of a god, or nationalism, or (insert cause here).
Using either conformation bias or adaptive preference formation to deal with the cognitive dissonance generated by doing something at your job you would consider morally objectionable in your personal life is how this is usually achieve. Either that or you just really don't care.
To be honest though we all do it. Most of the time it's to protect our self esteem or our egos when things don't go as we had planned or hoped. It's when we do this to make ourselves feel better when our actions harm others that it becomes dangerous. Intentional, unintentional or by following social norms or orders from a superior, it really doesn't matter it's the marginalization of the suffering or injury of others for your own personal comfort.
And no, we don't have to accept it even if all we can do is address directly when it shows up like it did here to let others know how we feel. That's how change starts.
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While I find this and other threads fascinating, I'm a bit lost and confused. What exactly are wedoing now? What actions are we to take to put more pressure on NCSoft? I'm having a difficult time pulling that out of all the philosophizing and Business Financing 101 discussions.
(Apologies if I come across a little snarky, I have a chronic illness that causes constant pain and I'm in the middle of a nice size flare up. It makes a bit short sometimes. )
Edited for missing word.
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To take it to the extreme, "Just following orders" is often not considered a valid defense in war crimes trials.
Finally someone brings up Nazis, even if only by allusion!
To go back to VV's point from yesterday about the game being a relic of a desktop-dominated tech world, that's more a technical problem than a legal one. They could fully intend to rework the game on a new engine/infrastructure and re-release it as CoH2, rather than bet on us hanging around or even growing our numbers while the devs and programmers made the changeover incrementally, glacially. Do I think it'll happen that way? Of course not. Do they have it in the back of their minds? Likely.
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While I find this and other threads fascinating, I'm a bit lost and confused. What exactly are wedoing now? What actions are we to take to put more pressure on NCSoft? I'm having a difficult time pulling that out of all the philosophizing and Business Financing 101 discussions.
(Apologies if I come across a little snarky, I have a chronic illness that causes constant pain and I'm in the middle of a nice size flare up. It makes a bit short sometimes.)
No apology necessary, the thread does indeed seem to be listing to port a bit, as it were ;)
I think the gist of the ideas here so far is that we might have some success by forcing NCSoft to waste resources correcting negative PR. If they have to do this to the extent that such damage limitation would cost them more than whatever it is they're saving by closing CoH, then it's a victory for players over arrogant and unfeeling corporate thinking. That line of thinking is certainly behind the MMOKiller meme concept - and the beauty of that one is it's free and doesn't require full page advertising and such. All it requires is that the MMOKiller images at the Photobucket site (http://s1339.photobucket.com/albums/o714/MMOKiller/) be grabbed by as many of us as possible and spread as far as possible (Facebook, Twitter, other forums etc) until the meme starts to stick.
Resistance thinking there you see...if you can't win a conventional fight, don't try - use unconventional tactics instead ;)
At the risk of keeping the thread listing however, I will just add a comment about NCSoft assets. While the company was awash with cash in 2011, don't forget they lashed a load out in 2012, so much so that they posted a loss in Q2. So if you were looking for something they were spending all that cash on, there you go. Here's a link to their Q2 financial results report :-
NCSoft-Q2-2012-Financial-Results (http://www.scribd.com/doc/102444902/NCSoft-Q2-2012-Financial-Results)
I'm an artist and numbers don't really agree with me, so I'll leave it to the more numerically capable here to take that info and dissect it ;D
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based on all the numerical evidence presented i do have to agree with codewalker
if i were an investor and saw the company which had a VERY large amount of wealth in loose assets thats not particularly invested in anything and they were closing down a profitable and very potential game w/ studio i would question investing in the company
also as said if the total value of all of ncsofts IPs was barely over $2 million, we would have to assume that coh alone would be maybe $500,000 (+/- 250,000) (very rough estimate, dont take too literally)
also based on other threads, valve potentially offered ncsoft somewhere around $3 million for JUST coh along with profit sharing and ncsoft basically ignored it, which is more baffling and raises many questions (why would ncsoft turn down an offer for 1 IP which the offer was 150% of the total value of ALL of their IPs?)
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So, what we must do is make them see that closing CoH is the more expensive solution. It presents an opportunity cost of many hundreds of millions in increased spending to undo negative publicity that can affect not just future sales, but also the base share values of the company too. Remember how in the figures we've seen the entire Western market was only around 5% of all revenue for NCsoft? Well, share values have fallen 6% since the closure notice. If they could be persuaded that it was the closure of CoH that had caused that, well, it means that they lost 6% to make about 2%. In other words, it would be cheaper for them to have run all their Western market for free, no profit at all, than to lose 6% of their share value.
Suggestion 5: So, here's how we force that decision. Keep talking about this. More importantly, keep spreading the news about those who are. Link to stories from your own websites, facebook profiles, twitter posts, etc. All of these things mean that search engines see these stories as more important, more widespread. That in turn makes those stories and site rank higher in searches for relevant words like "NCsoft" or "MMO" etc. Meaning that when people search for 'NCsoft' as well as finding the official homepage, and some share prices, etc, there will be all the negative press we are creating. Stories about how NCsoft have a questionable reputation, making ill-considered decisions. Right where people who were investing in NCsoft shares (or games) were searching.
This is what i will be focusing on the most. Everyone here can link articles - i'm sure that very many have - but if it is done in sufficient numbers and search engines start displaying negative results for NCSoft then that has to be worth a great deal to us.
[edit] - the 2 paragraphs at the top are from Ammons post early in this thread, sorry - not so good at taking a part of it and having it display properly....