Author Topic: NCSoft Stockwatch  (Read 708918 times)

Kosmos

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Re: NCSoft Stockwatch
« Reply #180 on: November 05, 2012, 01:08:29 AM »
$80 million is extremely ridiculous, especially considering that the game is 8-1/2 years old.  Just to put this in perspective, this is more than the budget of all but the biggest blockbuster movies that come out.  Making a top-tier AAA brand new game would only run at most around $100 million; typically it actually costs much less.  Don't be fooled, $80 million is a slap in the face, NCsoft's way of telling everyone who asks that they're not going to sell the game, and the fact that they later said that they had "exhausted all possibilities" in keeping the game alive is an insult to its players.

I can't prove this, though I hope that at some point others will come out publicly regarding this, but I've gotten from multiple reliable sources that several attempts at negotiating reasonable terms for sale--counteroffers to NCsoft's opening move--were attempted and rebuffed.

This runs parallel to my beliefs/estimates. At most I could get up to $25-30M for CoH (engine, code base, content and IP including CoH2, etc), NCsoftcore's customer accounts for CoH players, Paragon Studios (which had already been disbanded and the office stripped) and some sort of hosting agreement for at least 6 months. The only really tricky things for valuation, IMO, are the customer account value and CoH2's value. Because after disbanding PS and tossing their customer goodwill on a bonfire, they'd gutted the value of the rest of assets. An $80M starting offer would make me think I was buying a bridge in a recently storm-wracked New York borough.

Colette

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Re: NCSoft Stockwatch
« Reply #181 on: November 05, 2012, 01:26:14 AM »
This kind of valuation is not my specialty, but yes, you could easily shoot City of Heroes, the Movie with an all star cast for $80 mil.

Ammon

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Re: NCSoft Stockwatch
« Reply #182 on: November 05, 2012, 03:58:02 AM »

TonyV

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Re: NCSoft Stockwatch
« Reply #183 on: November 05, 2012, 05:33:14 AM »
Alternately I can buy a game where someone already took all those early developmental risks, did the years of work, and launched it successfully, and strat taking money tomorrow.

I would agree with this if City of Heroes were making as much money and had the subscriber base that it did at, say, launch and if it were still polished enough that it competed with current games not just graphically, but mechanically.  But it's doesn't.  The value of the game has depreciated over time, not increased.  I'm not saying it's worthless, mind you; if I thought that, I wouldn't have attempted to contact NCsoft to try to work something out and I seriously doubt anyone else would have.

But this game didn't cost $80 million to make.  Optimistically, it might make $3 - $5 million per year, assuming that sales don't drop during that time.  At that rate, it would take at least 16 years to recoup your money, possibly more.  NCsoft knows that no one is going to buy a game that, if they're able to keep it up-to-date for another 16 years, MIGHT come in the neighborhood of making back what they invested in it, at which point they MIGHT, if all goes impossibly well, actually make a tiny pittance of profit on it.

Asking $80 million wasn't just unreasonable; like I said, it was a slap in the face.  In fact, $40 million would have been a slap in the face, too.  The opening position if NCsoft were serious should have been somewhere in the $5 - $10 million range, and even that would need to be negotiated down some before someone wouldn't feel like they were selling their soul to Satan for buying it.

Plus, as I said, it wasn't like NCsoft tried in earnest to negotiate that price.  They stuck to it and then put out this insulting communication saying they had "exhausted all efforts."  That's BS, plain and simple.  With no game making money, as it is now, the property is worth $0 to them.  Not literally, not mathematically, as I'm sure it shows up with some figure next to it (hopefully not anywhere $80 million unless they're outright lying to financial authorities), but practically, it's dead weight to them.  If I offered them $10 on December 1 for it (not $10 million; 10 dollars), that would be $10 more in their company coffers than there was before with what they're doing with it now.  So yeah, $80 million was a joke.

NecrotechMaster

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Re: NCSoft Stockwatch
« Reply #184 on: November 05, 2012, 05:52:50 AM »
from what ive read around here i heard that valve supposedly offered $3 million for coh, which i think was pretty generous as it was pretty close to that $5-10 million top range that tony was talking about

JaguarX

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Re: NCSoft Stockwatch
« Reply #185 on: November 05, 2012, 06:21:19 AM »

SURELY, stakeholders could be persuaded that 80 million Dollars US is pie-in-the-sky & NOT a realistic price = and therefor this "we;ve exhausted all options is a crock of "stuff"
I also noticed that the S.Korean Government has like 9% of the NCsoft Stock (I think), maybe there's some possibility of leveraging that = what government is going to think sitting on IPs forever = while essentially killing-off most/any of the innate value they may  possess (or might have have once possessed).


I seriously doubt that anyone or entity that owns a significant amount of stock in NCSoft, even say 5% is totally blind about this transaction. They probably knew about it when the decision was made.

I dont know about anyone else but I yet to ever hear about any major investor, especially on the professional level that have no clue on what major moves transpire in a company they have a major holding in, especially as something as big as a "realignment.

Many people get the view that investors just throw money at a company and forget about it. Yes, many small timers do but when you are talking about 5% and up of a major company it would be the first time in history that the person or someone hired by that person is not watching the moves the corporation make like a hawk. Although I dont think the government gives a hoot about what NCSoft sits on as long as they get their cut.

And remember 5-10 miilion is nothing for them. That's toilet paper money. I'm not sure myself what they are getting out of it by sitting on the IP, but given that the company havent been ran into the ground in at least these 5 years since they bought COX I assume someone in that place have some sort of sense. They might be thinking thta they might just want to use it later and if they sell and then decide they want to revive it, you think who ever bought it will want to 3-4 years later after getting the game up and running and assuming it's success, want to sell it for say $5 million that is a reasonable offer now? Suppose it valued at $20 million then. That is $15 million lost to get something back that they could have just kept in the first place. The downside, and the part that I cant wrap my head around is that if they sit on it, as time go by, less of a chance of it ever returning to it's glory days under them. I'm not sure what they are doing or trying but I'm not a CEO of a major game company and I'm sure it takes a little bit of a different logic than many of us understand. Or else we'd all would be big fat cat million and billionaires leading major corporations that is making more money with each passing year.


Ammon

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Re: NCSoft Stockwatch
« Reply #186 on: November 05, 2012, 07:01:11 AM »
Optimistically, it might make $3 - $5 million per year, assuming that sales don't drop during that time.
Let me say up front that in arguing with you, Tony, I in no way do not hold you in high regard and respect you.  Quite the opposite.  If I didn't respect you so much I'd not spend so much time on our discussion. :)  However, I stil, respectfully, disagree, and I want to explain why.

I think a lot of the people pouring over the figures for NCsoft were estimating that CoH was generating between $3 million to $5 million a year in profit.  So they agree with you here.  But this neglects two major factors. 

First is that Paragon was massively overstaffed with developers, many of whom were apparently working on new secret projects that were generating no revenue, and did not contribute to earnings for CoH.  Lets imagine for a moment that all of the 80 devs were on pathetic wages of $25k a year, and that's $2 million just in the wages they take home, before factoring in taxes, pension contributions and the various other costs.  In the companies I've been involved in we usually estimate it costs double the actual wage for each member of staff, so $4 million if all of those 80 developers were on a lowly wage of $25k a year.  Cutting the developers working on new secret projects unrelated to CoH, reducing staff to levels needed to maintain and develop CoH directly, would most likely double the profit of CoH at a stroke, and very possibly more than double.

Second is that CoH was pretty poorly monetized generally.  The in-game store was doing fairly well, but we all know it was still getting traction, and that much more could have been done with paid add-ons.  The attempt to add an advertising based revenue stream was frankly bad, and doomed to fail from the start.  Nothing was done with sponsorship, and merchandising (Mugs, Mouse-mats, Bags, Jackets, etc) was barely thought of.  Usually, again, these kinds of revenue streams can double the overall profits.

In other words, proper marketing, not being dictated Korean style from a thousand miles away, could have easily had CoH earning at least $12 - 15 million in profit a year. 

Let's face it, a huge part of our shock and surprise over the closure of CoH is because we all knew instinctively that it should be making good profit, and we'd all seen things NCsoft just didn't seem to see, or in some cases, actually dragged their heels over when the ideas came from Paragon itself.

NCsoft would have known precisely how much of the potential profit of CoH was being spent on staff, premises, and other expenses, and just how much of those expenses were effectively used in long-term investment rather than actually on keeping CoH profitable.  If they are valuing the company high, there is probably reason for it, and not all of that reason will be ego.  None of it will be unwillingness to sell at the right price.  A board of directors isn't allowed to do that.  They have to serve the interests of the shareholders, except occassionally where duty to the stakeholders may dictate taking a short-term loss to maintain a long-term position.

If you'd like some illustrations from other businesses, I'll happily share some, like how Amazon was losing billions of dollars a year in the early years to gain volume.  Many who don't know such strategies compared their practices to selling dollar bills for 50 cents a shot and thinking that if they only sold enough of them they make a profit :).  Fact is it got them the volume to negotiate deals from suppliers noone else matches.  Amazon can now sell goods for a profit at less cost to the consumer than most stores can even buy the goods from the manufacturer.  Such is the power of bulk discounts.  Some very strange seeming practices are loss-leader tactics that make solid sense, even when outsiders don't see it.


Suppose it valued at $20 million then. That is $15 million lost to get something back that they could have just kept in the first place.
Exactly right.  Plus add in the thing that there are two sides of value.  The value to the buyer, and the value to the seller, and they don't always coincide.  That you can't see why NCsoft value CoH so high is going to be partly because that's the point.  A company doesn't want all its strategies to be transparent and visible.  They obviously do believe that CoH is more value to them by far than any offers made, but explaining why might only open the door to rivals hoping to exploit the same knowledge.

Stick to a fact - Guys who have built a multi-million dollar game, who have that much business knowledge and strategy, value it higher than those outside do, right now.  Each have their own reasons and bets behind their positions.  NCsoft are not mad, or stupid, so when you work out the other reasons for them not selling cheap, you'll be closer to working out their true position and strategy. 

If we are in a fight with NCsoft, the last thing you ever want to do in a fight is underestimate your opponent, especially in terms of his strategy.  It is much safer to assume he knows exactly what he is doing, and prepare for that in your own moves, than to assume he does not.  There is good reason that many corporate executives study Sun Tsu, and understand that hiding your true intentions in moves is good strategy.  Appear stupid and you will always beat your opponent while the fool is still laughing at you.

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Re: NCSoft Stockwatch
« Reply #187 on: November 05, 2012, 07:45:04 AM »
Let me say up front that in arguing with you, Tony, I in no way do not hold you in high regard and respect you.  Quite the opposite.  If I didn't respect you so much I'd not spend so much time on our discussion. :)  However, I stil, respectfully, disagree, and I want to explain why.

I think a lot of the people pouring over the figures for NCsoft were estimating that CoH was generating between $3 million to $5 million a year in profit.  So they agree with you here.  But this neglects two major factors. 

First is that Paragon was massively overstaffed with developers, many of whom were apparently working on new secret projects that were generating no revenue, and did not contribute to earnings for CoH.  Lets imagine for a moment that all of the 80 devs were on pathetic wages of $25k a year, and that's $2 million just in the wages they take home, before factoring in taxes, pension contributions and the various other costs.  In the companies I've been involved in we usually estimate it costs double the actual wage for each member of staff, so $4 million if all of those 80 developers were on a lowly wage of $25k a year.  Cutting the developers working on new secret projects unrelated to CoH, reducing staff to levels needed to maintain and develop CoH directly, would most likely double the profit of CoH at a stroke, and very possibly more than double.

Second is that CoH was pretty poorly monetized generally.  The in-game store was doing fairly well, but we all know it was still getting traction, and that much more could have been done with paid add-ons.  The attempt to add an advertising based revenue stream was frankly bad, and doomed to fail from the start.  Nothing was done with sponsorship, and merchandising (Mugs, Mouse-mats, Bags, Jackets, etc) was barely thought of.  Usually, again, these kinds of revenue streams can double the overall profits.

In other words, proper marketing, not being dictated Korean style from a thousand miles away, could have easily had CoH earning at least $12 - 15 million in profit a year. 

Let's face it, a huge part of our shock and surprise over the closure of CoH is because we all knew instinctively that it should be making good profit, and we'd all seen things NCsoft just didn't seem to see, or in some cases, actually dragged their heels over when the ideas came from Paragon itself.

NCsoft would have known precisely how much of the potential profit of CoH was being spent on staff, premises, and other expenses, and just how much of those expenses were effectively used in long-term investment rather than actually on keeping CoH profitable.  If they are valuing the company high, there is probably reason for it, and not all of that reason will be ego.  None of it will be unwillingness to sell at the right price.  A board of directors isn't allowed to do that.  They have to serve the interests of the shareholders, except occassionally where duty to the stakeholders may dictate taking a short-term loss to maintain a long-term position.

If you'd like some illustrations from other businesses, I'll happily share some, like how Amazon was losing billions of dollars a year in the early years to gain volume.  Many who don't know such strategies compared their practices to selling dollar bills for 50 cents a shot and thinking that if they only sold enough of them they make a profit :).  Fact is it got them the volume to negotiate deals from suppliers noone else matches.  Amazon can now sell goods for a profit at less cost to the consumer than most stores can even buy the goods from the manufacturer.  Such is the power of bulk discounts.  Some very strange seeming practices are loss-leader tactics that make solid sense, even when outsiders don't see it.

Exactly right.  Plus add in the thing that there are two sides of value.  The value to the buyer, and the value to the seller, and they don't always coincide.  That you can't see why NCsoft value CoH so high is going to be partly because that's the point.  A company doesn't want all its strategies to be transparent and visible.  They obviously do believe that CoH is more value to them by far than any offers made, but explaining why might only open the door to rivals hoping to exploit the same knowledge.

Stick to a fact - Guys who have built a multi-million dollar game, who have that much business knowledge and strategy, value it higher than those outside do, right now.  Each have their own reasons and bets behind their positions.  NCsoft are not mad, or stupid, so when you work out the other reasons for them not selling cheap, you'll be closer to working out their true position and strategy. 

If we are in a fight with NCsoft, the last thing you ever want to do in a fight is underestimate your opponent, especially in terms of his strategy.  It is much safer to assume he knows exactly what he is doing, and prepare for that in your own moves, than to assume he does not.  There is good reason that many corporate executives study Sun Tsu, and understand that hiding your true intentions in moves is good strategy.  Appear stupid and you will always beat your opponent while the fool is still laughing at you.

yeah.

Kosmos

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Re: NCSoft Stockwatch
« Reply #188 on: November 05, 2012, 08:31:04 AM »
The game engine is basically 8 yrs old, sure.  But it has been subject to continued maintenance, development and improvement for all of those years.  Issue 24 is bang up to date and still has so many features other games have no comparison to.

The game engine is at least 10 years old, and the design is close to 12. You need to date to when the tools were designed, not when the first finished product using them hit the market. Also, it wasn't being developed or improved all those years. In fact, it was rarely being worked on during that period. And some of the work didn't go very well. Even Ultra Mode is rather disappointing - giving very poor performance for the graphics quality. It wasn't until the last 2 years or so that any significant programming work was done on the engine outside of Ultra Mode. Which is why we started seeing all the new mechanics added crammed into this last period.

I think you're making a gross miss-estimate in equating a game engine and code base built on it to other software tools and products. It doesn't comprise a group of copyrights/patents/trade secrets that have intrinsic value as the latter often do. Because game engines such as this one are so highly optimized for their environment (otherwise they'd be garbage), they are more properly compared to firmware in terms of life expectancy/portability than to software (not exactly, of course... I suggest it as a possible idea to change point-of-view). We're talking firmware in control circuits for a specialized piece of machinery sort of value. Which after 10-12 years is exactly nothing unless you're still selling the same product. No one in their right mind developing a new game would come to NCsoftcore asking to buy or license the game engine unless they were also getting the CoH code base, content, IP, etc. That is, unless they intended to sell the same product. Given that... the game engine, code base and developed content really don't add any value beyond CoH being a $10M/yr gross business with expansion potential. There were other assets that did add to that, but the game engine isn't really one of them.
« Last Edit: November 05, 2012, 08:46:28 AM by Kosmos »

Undercat

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Re: NCSoft Stockwatch
« Reply #189 on: November 05, 2012, 09:15:27 AM »

Atlantea

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Re: NCSoft Stockwatch
« Reply #190 on: November 05, 2012, 11:37:22 AM »
Holy shit...

That pings with the resonance of truth Undercat. Hell even the NUMBERS match up!

I didn't think anyone could make me hate NCSoft more than I already did. But this just... there are no words.

Do you mind if I re-post this to the COH facebook pages I'm a part of? Or direct links back? This is EXPLOSIVE and needs to be spread around.

The Fifth Horseman

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Re: NCSoft Stockwatch
« Reply #191 on: November 05, 2012, 01:07:21 PM »
Is it possible that a major part of that $80 mln is their perceived value on customer data and account data?
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Undercat

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Re: NCSoft Stockwatch
« Reply #192 on: November 05, 2012, 01:26:53 PM »
Do you mind if I re-post this to the COH facebook pages I'm a part of? Or direct links back? This is EXPLOSIVE and needs to be spread around.

Be my guest. Just be mindful that these facts, while suggestive, do not prove a causal link beyond doubt. Especially the coincidence of the asking price matching their initial losses---it may actually be the message I see it as being, but I would never attempt to testify to that effect.

I posted my thoughts here precisely because this is the heart of the community that was directly affected by NCsoft's actions. I haven't seen this connection made before and wanted to contribute my thoughts on the matter in an attempt to bring resolution to the questions surrounding the closure---to offer one more possible piece of the puzzle.

Facebook is not the heart of this community and as you can probably deduce from my post count, I'm not really big on starting firestorms. Moreover, I'm not altogether unsympathetic to their travails; my beef is what they did to me as a result. I was a perfectly satisfied customer. I could have forgiven the closure of a game that was actually losing them money. But the more I dug, the more I began to suspect it never had anything to do with CoX at all. And that really aggravated me. Their political-candidate-grade nullspeak only managed to inflame that aggravation.

So, if you have some other CoX community that is mulling about for answers to the question "why?", then by all means post away. But please be careful.

DamianoV

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Re: NCSoft Stockwatch
« Reply #193 on: November 05, 2012, 01:43:51 PM »
Just wanted to chime in with my own (obviously biased) perspective:

In brief, an object for sale has only 3 values: the revenue/utility you can get from it yourself, the amount someone else is willing to pay you for it, and $0.  The utility of CoH to NCSoft on Dec 1 is so close to $0 as to be indistinguishable from that number, and the price anyone will be willing to pay will be dropping like a stone as well.  If NCSoft is unaware of that at this point, they are fools of the first water, and fully deserve the loss of potential revenue that has, and will continue, to result.

Because you see, the true value here is not the code, the IP, the servers, the corporate structure, or even the devs, bless them all.  It is the _formerly_ active and loyal customer base.  And that value is already significantly depleted, being lost day by day, and will soon be so far diminished as to be effectively gone.

For NCSoft, at least.  Speaking as someone who's played and payed continuously since Day 1... that well has been well and truly poisoned.  Their only chance at getting anything tangible out of this debacle at this point is to sell it as fast as possible.... and they apparently have no such intent.  Too bad for them.  There are other companies to patronize and other services (Plan Z?) to support, after all.

Undercat

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Re: NCSoft Stockwatch
« Reply #194 on: November 05, 2012, 02:20:39 PM »
I have to admit, I have never heard about 1/2 the Tabula Rasa budget going towards the Garriots.

I just went and dug up some my sources, all of which are from exactly the same paper you reference. In this article the fee is stated as being $16 million each. Now the slight difference in magnitude doesn't bother me---exchange rates fluctuate and they probably use the current exchange rate each time they quote costs like these---the question is whether it was x1 or x2. I don't know. And, of course, NCsoft bought out the Garriott's newly-founded game company specifically to produce a next-gen MMO, after their non-compete with EA had expired from the prior sale of Origin. That cost went somewhere. But I admit that what, exactly, is being included in the 100 billion won price tag quoted for Tabula Rasa is unknown to me and may or may not include any of these.

The fact that the same paper is quoting the 43 billion won acquisition price of the Garriotts and their game company in the same breath (along with the 2 million share options) in this article is what led me to believe that the figures had been merged.

Quote
And Garriott had planned the trip and received approval from NCSoft to take the trip. Although *at one point* he wanted NCsoft to sponsor him (probably to help diffuse the costs), he ended up footing the $30million himself. Infact, he was already in training to go up into space during 2007 (source: Space.com

He did more than that. He convinced Kim to take a whole bunch of NCsoft employees on a null-gravity ride in the "vomit comet" some time before Garriott decided to take the actual trip to space. The plane ride was footed by NCsoft to the tune of $150,000, and Kim was one of the participants. There are numerous articles at Korea Times talking about Garriott's later trip to space and how displeased NCsoft was with it; moreover, the fact that they essentially fired him while he was in space says it all.

There are about 30 articles I went through by doing a site search at Korea Times. Wish I'd actually kept a log of each article so I'd know exactly where they were, but it wasn't my priority at the time.

Quote
Tabula Rasa was mainly a PvE game... it might have had the 3rd person action PoV (well, just like CoX really), but it was *not* a PvP focused game. It did have PvP, but you had to make the choice to go into it. It was not possible to go around just randomly ganking players. Sorry, had to correct that, as I played it from closed beta to closure.

I had heard that there was virtually no PvE content or experience in it at launch and that the real focus of the game was PvP, like Aion, but as I said, I didn't play it. I didn't play Aion until rather recently, either, after they had developed quite a bit of PvE content for it. If I hear that the focus of a game is PvP, I seldom pay any attention to it at all. (edit: I should point out that this is one of the reasons I'm leery of posting my comments outside this forum---such things actually do influence some people who are just feeling about for opinions and don't take the time to verify those opinions. I have a client, for example, who had a bad experience with HP and refuses to deal with them any more. None of my other clients have this issue---they didn't have the bad experience. Should I take this client's bad experience prima facie and not use HP products anymore? See, this is one area that I'm very careful about. Games, on the other hand, I'm not so careful about... ;) )

Quote
If CoX is just purely an innocent bystander in the fight between Garriott and Ncsoft, then why did it take almost a year for the closure to come through (and this was after the final judgement from the Garriott Vs NCsoft court case)?

It didn't. The xenophobia set in almost immediately, as you can easily verify by reading the various postings from American NCsoft employees about how they were treated by their Korean supervisors. It wasn't an accident that Korea clamped down on their US operations as tightly as they did. I'm sure they felt pretty badly stung by their social experiment of letting an American head the show for several years.

As for the closure of CoH, Richard Garriott's lawsuit regarding compensatory damages for his forced stock sale is probably what made them decide to throw in the towel completely. I suspect they viewed the entire American social and legal systems as being just too much bother. Develop at home and ship it abroad; no need to worry about obnoxious court systems that award huge damages to wayward employees with "poor work ethics." What it was, exactly, that finally put the wheels in motion is a question I cannot answer; what it was that set it into motion is a little more clear to me...or are you claiming that NCsoft's experience with Tabula Rasa had nothing whatsoever to do with their unwillingness to use American developers?
« Last Edit: November 05, 2012, 02:37:20 PM by Undercat »

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Re: NCSoft Stockwatch
« Reply #195 on: November 05, 2012, 02:36:31 PM »

Colette

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Re: NCSoft Stockwatch
« Reply #196 on: November 05, 2012, 03:26:34 PM »
Wow...

...that's all I can say, Undercat. Excellent analysis. Because this Garriott guy struck out, the Koreans wanna go hide under the covers. It defies all logic of course, yet it explains so much.

Thanks for unveiling all that. So the folks at NCSoft, lost in their xenophobia and their grudge, really do have their fingers in their ears as we on the other side of the Pacific and the language barrier throw a vocal conniption of our own.

Pfft! What a pathetic way for this great game to end. Sure wish it had never been sold to NCSoft in the first place.

NecrotechMaster

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Re: NCSoft Stockwatch
« Reply #197 on: November 05, 2012, 03:36:55 PM »
Wow...

...that's all I can say, Undercat. Excellent analysis. Because this Garriott guy struck out, the Koreans wanna go hide under the covers. It defies all logic of course, yet it explains so much.

Thanks for unveiling all that. So the folks at NCSoft, lost in their xenophobia and their grudge, really do have their fingers in their ears as we on the other side of the Pacific and the language barrier throw a vocal conniption of our own.

Pfft! What a pathetic way for this great game to end. Sure wish it had never been sold to NCSoft in the first place.

it really is pathetic, but i agree with tony that if coh didnt get bought by ncsoft the game could have ended many more years ago

however to see something like this happen is inexcusable and they shouldnt be allowed to get away with it

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Re: NCSoft Stockwatch
« Reply #198 on: November 05, 2012, 03:59:50 PM »
You know, that's one of the reasons I've been steering clear of the various Garriott discussions. I know a lot of people are fans, and there's the whole controversy over the resignation letter being used to force him to exercise stock options early (and the resulting lawsuit). However I remember hearing about his 'joyride' right after TR launched and thinking some very unkind thoughts about the type of person who would spend that kind of money on diversions while his huge budget game was floundering.

TBH, if I were Taek Jin Kim, I probably would fired him, too. I doubt I would have closed TR, because there was always the potential it could be salvaged and make up some more of the losses, but who knows.

I really hope that the closing of COH and "realignment of company focus" are not fallout from that fiasco. It would be a shame.

My thoughts on Garriott's joyride through space are similar to those of CoH. If TR failed, then fine. Let it fail properly without putting a knife in its back, bow out gracefully and open source or sell the IP to somebody else who wants to keep the project running, even if they're bad at it (such as Garriott himself who tried to buy the IP).

I feel muchly the same way about CoH. If CoH was to fail, fine, but don't put a knife in its back and open the code up to people who want to let the game continue.

I mean, if Garriott or Paragon Studios couldn't run their respective game, fine, I just wish they were given the chance.

I hate this sort of thing where an IP can be hoarded by people with no intention to do anything with it when it still has potential. I'm completely fine with the concept of patents and copywrite in general just against this sort of sitting on good things to make slightly less good things more profitable.
« Last Edit: November 05, 2012, 05:37:44 PM by Osborn »

Ammon

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Re: NCSoft Stockwatch
« Reply #199 on: November 05, 2012, 05:44:32 PM »
You know, that's one of the reasons I've been steering clear of the various Garriott discussions. I know a lot of people are fans, and there's the whole controversy over the resignation letter being used to force him to exercise stock options early (and the resulting lawsuit). However I remember hearing about his 'joyride' right after TR launched and thinking some very unkind thoughts about the type of person who would spend that kind of money on diversions while his huge budget game was floundering.
I'm with Codewalker on that. 

But more than that, have any of you ever worked with Corporations?  Legal looks over everything which means most of even the simplest decisions take months.  Basically, sure, the CEO can often bluster past that, but it is prety darn rare and so against corporate culture.  If you want to start speculating and creating conspiracy theories, ask yourself why a corporation, with running stuff past legal teams even before blowing their noses, put out a forged letter? 

My only logical conclusion is that, for whatever reason, NCsoft were certain Garriot would acknowledge and agree with the letter when he landed.  I honestly can't think of any realistic rational alternative that fits with the fundamentals of how corporate culture works.  NCsoft were lead (by something) to believe that Garriot would ratify their letter, and instead found themselves in a massive lawsuit.  But his brother got a nice promotion in the same company right about the time the letter was done ...

Anyway, that's very wild speculation that I'm not presenting as anything but a purely personal speculation and opinion.  Certainly not an actual allegation that NCsoft were set up for a sucker punch in the courts that gained a massively overpaid person even more millions.


If we are to look at coincidentals and circumstantial evidence for clues about why CoH was closed, you know that the most likely is simply the 5 year timeline.

In an earlier post I bolded the words '5 year plan' because these are absolute golden words in marketing and investment.  Well, funnily enough, the decision to close CoH and paragon came really close to that 5 year date - how close I can't know without knowing when the decision to purchase Paragon was first touted (thus how much of the lead-in to buying time was in the 5 year plan), and how much sunsetting was included.

Business today is ruled almost utterly by the 5 year plan.  Too much so for my tastes by far, but I generally have to fit all my own work into such plans by my clients, and speak in their language, so I'm all too familiar with the term and its importance.  Businessmen and investors don't even move into an investment without looking for their exit strategy (the bit where they get out again with a ton of profit).

I would be utterly amazed if there were not a 5 year plan for Paragon Studios and CoH, or rather, a 5 year plan within Paragon, that they worked to, and a higher level 5 year plan of performance management that NCsoft refered to all along.  The decision to close Paragon Studios may literally have been made 5 years ago, based on performance indicators at various milestones, and especially at the 5 year stage.  Either the company, project, or product hits its targets (KPIs) at various points, or sooner or later it reaches a deadline at which it is scrapped.  No excuses, and no "But its so close now".  They draw hard lines just as professional gamblers do, and for the same reason.  If it hasn't paid off as expected by a certain time, you cut your losses and move on.

Now, I'm not presenting this as what happened either.  We can't know.  But I can tell you that this is precisely what gets most companies and products shut down.  They are given deadlines and performance targets, with a certain amount of leeeway, but at a set point a blunt decision is made with no grey area.  It either hit the target or it didn't.  If 5 years of knowing targets didn't let people hit them then another 5 months won't either.

The one fact we have to stick with is that offers of buying the IP didn't tempt a company (people paid to make money, not make personal decisions or play politics) to sell.  Whether or not their valuation was realistic, it will NOT be personal or political reasons, but ones that go into a balance sheet.  Let's not make it any more complex, or add any conspiract theories that just cloud the issue.

The root issue is very simple.  NCsoft value the thing far higher than any bidder so far has.  Our one hope is to lower the value they perceive it having, or at least to add in extra value in some way to getting rid of the problem.  Isn't that clear enough without needing to speculate much more?