NCSoft Stockwatch

[Technerdoc]

I don't think that Wildstar will be the big next thing for them, just like they are printing money with Guild Wars 2 right now. In Guild Wars 2 there was the very sucessfull part 1 with that revolutionary concept without the monthly fee, people still had this in their mind, because all MMOs got monthly fees in this time. Now we are in a world with all this free to play games, but people see something evil in them, and now there is a game what is not free to play and this was something most people are looking for. It was a very clever marketing not to use the bad "free to play" words, but I'm thing that Guild Wars 2 is not that different from them, all in all it also had a item shop. Take the 50 bucks and spend it in any free to play game you want, buy character slots and a bigger inventory and so on... I don't see the difference, but people feels better when they have a box from the game and it's not called free to play. Did this also work with Wildstar? I don't know. I only see a niche title there and we all know what NC-Soft is doing with them sometimes... To bad for Carabine...

[Ironwolf]

I see right now where Wildstar is going and so does every gamer who has ever played an MMO.

They are going to be pressured to release it before its done. It will be bug filled and lack content with no end game at the time of release. This will tick off people who wanted more and then it will drag along for a year until they fix all the junk.

You can't do this any more - people have too much choice.

[FatherXmas]

Our "favorite" analyst firm for NCsoft, KDB Daewoo, just released their analysis of the 4Q and 2012 numbers.

Well they still have the stock as a Buy but they lowered their 12 month price target to 200,000 from 280,000 (it was 600,000 back in Nov 2011, oops).

Highlights include:

We attribute disappointing 2012 earnings to: 1) Blade & Soul's underwhelming performance (in contrast to the blockbuster hit of rival game League of Legends), and 2) a sharp decline in the number of players for existing games (Aion, etc.).

As for their optimism.

We anticipate new significant game momentum beginning this March due to the 1Q release of the mobile version of Lineage I (co-developed with top Japanese mobile game provider GREE), as well as from  Blade & Soul, which is scheduled to hit the Chinese market in 3Q (following a large-scale 1H beta test).   

We anticipate NCsoft will also launch a mobile version of Blade & Soul in 1H through one of Japan's leading mobile-gaming platform operators, DeNA. NCsoft plans to roll out its new title WildStar (currently being developed by US-based Carbine Studios) in 2H usingCD packages in the US and Europe. It also intends to launch  Guild Wars 2 in China, Taiwan, and Japan. An expansion pack for Guild Wars 2 is slated for a 2H release in the US and  Europe.
                   
We are not overly concerned about release delays or outright flops (as we have seen in the past), as current share prices and earnings expectations do not seem to price in prospects for new games.   

They revised their 2013 revenue number down 2.5% and profit estimate down 34.6%.  Before the party hats come out they are still saying profits will be up 13.4% over this year.

They are also guesstimating that GW2 revenues will drop, a lot, for the first two quarters and picking back up when the expansion comes out but nowhere near the 4Q number.  Basically they are indicating that 2013 sales will equal the 4 months of sales in 2012.  I believe these are excluding any income from the game coming to Asia.

Same with B&S.  They see it's numbers remaining flat, again excluding any sales when the game expands outside of Korea.

They also indicate that Wildstar will come out Q4 2013.

So from their perspective, all is well. ALL IS WELL!!

[Mistress Urd]

I see right now where Wildstar is going and so does every gamer who has ever played an MMO.

They are going to be pressured to release it before its done. It will be bug filled and lack content with no end game at the time of release. This will tick off people who wanted more and then it will drag along for a year until they fix all the junk.

You can't do this any more - people have too much choice.

Winner Winner Chicken Dinner! Yep. Let the early "founders" waste money during paid beta test before the game goes Free to Play.

[Blue Pulsar]

I have been watching NCSoft on Reuters and noticed something. Yesterday their stock dipped to 125,000 and then hovered around 126 for a while. Today, the same page, found here, says that their 52 week low is 126. However, they still show that the company dipped to 125 yesterday. Is that just a mistake on the website or am I misunderstanding something?

Edit: It must have been a glitch. It seems as though they fixed it.

[JaguarX]

I have been watching NCSoft on Reuters and noticed something. Yesterday their stock dipped to 125,000 and then hovered around 126 for a while. Today, the same page, found here, says that their 52 week low is 126. However, they still show that the company dipped to 125 yesterday. Is that just a mistake on the website or am I misunderstanding something?

Edit: It must have been a glitch. It seems as though they fixed it.

They might be adjusting for currency exchange. aka the worth it was in dollars 52 weeks ago compared to today.

(A mere stab in the foggy darkness while blindfolded with a cow hide.)

[Blue Pulsar]

They might be adjusting for currency exchange. aka the worth it was in dollars 52 weeks ago compared to today.

(A mere stab in the foggy darkness while blindfolded with a cow hide.)

Well, whatever it was, the last 3 times I checked, the 52 week low was 127k won, then 126k won, then back to 127. I'm sure it's just something glitchy with the Reuters site.

Edit: Which is odd because it was 125 yesterday, and at the same time it said the 52 week low was 125. Maybe NCSofts sled ride is causing bugs in the software... >_<

[JaguarX]

Well, whatever it was, the last 3 times I checked, the 52 week low was 127k won, then 126k won, then back to 127. I'm sure it's just something glitchy with the Reuters site.

Edit: Which is odd because it was 125 yesterday, and at the same time it said the 52 week low was 125. Maybe NCSofts sled ride is causing bugs in the software... >_<

prbably just a glitch. Isnt the first time and probably wont be the last time.

[FatherXmas]

Well, whatever it was, the last 3 times I checked, the 52 week low was 127k won, then 126k won, then back to 127. I'm sure it's just something glitchy with the Reuters site.

Edit: Which is odd because it was 125 yesterday, and at the same time it said the 52 week low was 125. Maybe NCSofts sled ride is causing bugs in the software... >_<

Yahoo's page has the low as 125,000.

[gogoman]

I am a former employee of NCsoft.

I am glad to see that the analysts get it finally. I couldn't believe it when the stock went up to 360k KRW based on nothing but pure IR BS, but I have to say they had a really good CFO. I think Morgan Stanley's Sam Min is just the first one to really understand how revenue is made and what are the chances for NCsoft, namely nothing.

If I may shed some light on this:
While I was there until last year, there were always those projects for social and mobile, but in the end NCsoft is and will always be unable to produce anything that is not MMO. If you know about the CEO a bit, he was just extremely lucky that he built Lineage and then hired a good CFO to build this whole story of a multinational gaming company that is able to generate a presence in the US, has stable sources of revenue, good publishing capabilities, blablabla. That. was. all. pure. BS.
I can tell you from my personal experience that neither he nor any of his C-levels is able to provide leadership for a company. All discussions are about "why is the monster so easy to kill?" or "why do we not have that magic powder from the previous quest anymore". The CEO doesn't understand anything on a strategic business level, but always talks about product development. That is why - and here it comes - he eliminated all casual game developments as early as 2010. He tried to manage over quality, but as we all know, casual is not developed like MMO over quality, but over quantity. Same happened for their big announcement of social: big announcements and press-releases and today nothing is there, instead all development efforts got killed. And the CEO basically thinks that anything outside development is a pure cost-function and doesn't provide any value to the company. So then no wonder that their publishing organization is so incapable to localize a game outside Korea.

I think the CEO sold his stock to Nexon at a huge discount, because he knows that there is no future for NCsoft anymore. That's why he cashed in. He knew this: 1) Korean revenue is coming down because of the government policy to close down PC cafes after midnight. These users will then go into mobile, but there is no mobile offering from NCsoft, nothing. 2) Outside Korea, their revenue was shrinking, especially in the US and Europe. China clueless and 3rd party only. Japan total chaos with an organization falling apart. And Southeast Asia only opportunistic reactions, no strategic moves. 3) Social is kicking in, user-acquisition and retention marketing is becoming important, but Ncsoft has nothing to offer 4) Cannibalization of MMO's finally kicking in. I mean how many MMO's can Koreans play in a day?

And I don't event want to mention how the rest of the C-levels/the CEO's schizophrenic brother are...

I think Sam Min of Morgan Stanley was way to mild with 125,000 Won as target price. I am pretty sure they pulled a string to achieve growth in 2012. They always do funny things like "deferred revenue" and other BS. All their MMO's are coming down and there is no other thing in the pipeline that has serious revenue potential. If you play AION in Korea, all servers are dead, end-levels are empty, nothing going on, you can't even play certain tasks, ,as there are not enough players for it.

[Aggelakis]

If you play AION in Korea, all servers are dead, end-levels are empty, nothing going on, you can't even play certain tasks, ,as there are not enough players for it.

Isn't Aion like the number 3 or 4 game in Korea? This doesn't add up.

[NecrotechMaster]

but if 80% of the population is playing the #1 or #2 games, then only like 20% is left for #3 and #4

as they mention you can only play so many mmos at a time

[JanessaVR]

I am a former employee of NCsoft.
[snip]

So, it's as I feared/suspected - they're really just stupid.  No nefarious master plan, they're just idiots with no idea how to run a MMO-producing company.

[JetFlash]

So, it's as I feared/suspected - they're really just stupid.  No nefarious master plan, they're just idiots with no idea how to run a MMO-producing company.

Never attribute to malice that which can be adequately explained by stupidity.

[FatherXmas]

Aion's quarterly revenue is down 72% from it's peak three years ago (4Q 2009 to 4Q 2012) and 53% from only a year ago.  If there's a similar decline in active population then it can look like the servers are now empty (remember that argument).  They've been updating the game and I believe patch 4.0 is coming shortly (or maybe it's already out) with hopes it will reinvigorate the game.  That said the one analyst whose reports on NCsoft that I can find easily is forecasting Aion's sales to decline another 20% in 2013.

As for the mobile space they may have discontinued internal development in 2010 to a "buy what's working" tactic when they acquired Ntreev.  And they are hyping CCG style mobile games in Japan based on their MMOs.  I'm not familiar with what passes as a successful mobile game genre in Korea so I don't know if these CCG "conversions" will work there.

[Triplash]

They've been updating the game and I believe patch 4.0 is coming shortly (or maybe it's already out) with hopes it will reinvigorate the game.

I'm not quite clear. Do you believe Aion is perfectly healthy right now?

Because I can remember another game NCsoft used to offer that was being updated regularly, with a "reinvigorating" patch nearly ready for release. That game also appeared to be perfectly healthy, right up to the day it was scheduled to be shut down. Edit: A savvy analyst would most likely notice behavior like that when they see it beginning to repeat.

The definition of a "perfectly healthy" product may have to be re-examined when the company offering it are themselves the toxic presence.

[Ironwolf]

The trouble is they can't cut everything. It appears that NCSoft is playing a shell game. They are hiding the poor health of their games and the dubious releases of new projects by cloak and dagger means.

It really does appear Occam's razor is correct - the simplest reason for closing City of Heroes is incompetance by management.

[FatherXmas]

I'm not quite clear. Do you believe Aion is perfectly healthy right now?

Because I can remember another game NCsoft used to offer that was being updated regularly, with a "reinvigorating" patch nearly ready for release. That game also appeared to be perfectly healthy, right up to the day it was scheduled to be shut down. Edit: A savvy analyst would most likely notice behavior like that when they see it beginning to repeat.

The definition of a "perfectly healthy" product may have to be re-examined when the company offering it are themselves the toxic presence.

Yea ... Aion's worst quarter, the current one, still had sales 8-9x that of CoH's last reported quarter.  Size still matters.

Aion is definitely on a nosedive, just like CoH.  The question is where and when do they level out, with their hard core players not willing to leave.

Also let's face it, Aion when it was released was NCsoft's prettiest MMO to date.





It's possible that B&S is attracting Aion's players because it's the new "prettiest" MMO in the stable.

[FatherXmas]

The trouble is they can't cut everything. It appears that NCSoft is playing a shell game. They are hiding the poor health of their games and the dubious releases of new projects by cloak and dagger means.

Watchya talkin about Willis?  What shell game?  What cloak and dagger means.

[HarvesterOfEyes]

Aion is definitely on a nosedive, just like CoH.

Please clarify. What is this "nosedive" CoH is/was in?