So TonyV, you believe that NCSOFT had been intentionally lying in they investor reports for years leading up to the closure of CoH as part of some grand plan to lay the groundwork for a justifiable reason to close the game?
How many times do I have to say this? More or less, YES. I think that "lying" might be a bit strong of a word to use, as I'm sure they probably don't view it as lying. You know as well as I do that almost all companies shift money around from point A to point B to accomplish various goals and convey certain appearances.
For example, how many companies are incorporated in Delaware? How many companies do you honestly think have
any connection to Delaware other than it being on some paper saying that's where they incorporated? Why do you think they do this? It's because the fees, taxes, and laws regarding corporations in Delaware are the most conducive to incorporation than any others in the United States, so some hugely disproportionate number of companies are incorporated there. (A quick Internet search turns up that 60% of Fortune 500 companies are incorporated in Delaware and 75% of IPOs happen in Delaware.)
Is this "lying"? I would argue that it's at least a bit dishonest. If I've been operating a business in, for example, the state of Georgia, taking advantage of the resources that exist here to build my company up to a point where I'm ready to incorporate, I intend to continue doing so after incorporation, and I'm indelibly associated with the state of Georgia (
The Home Depot?
Coca-Cola?
Delta Air Lines?), it seems to me pretty scummy to incorporate in Delaware and deny money that the state of Georgia desperately needs in its own budgets to continue providing services and resources to allow more people to start businesses and prosper. Yet not only is this practice legal, it is
extremely common.
Companies do things all the time that normal people like you and I would consider at least a bit dishonest, sometimes outright lying, but that are technically legal. Do you
really think that if NCsoft is going to launch a new game such as Aion that they're not going to do their dead-level best to convince customers and investors that this is the best game on the market and that people are flocking to it in droves? One way to do so is to take any kind of shared expenses such as, I dunno, corporate accountants, legal consultants, etc., and shift them onto studios and/or games that the company doesn't care so much about, games that are in other markets where they don't want to focus their efforts. Another is to take sales that can't really be precisely pinned down to City of Heroes sales such as game time cards or subscription fees and attribute them to games you want to make look better.
That's just off the top of my head, the most common things companies do in this vein. I'm sure that a practiced attorney could come up with more. And that's just assuming that what NCsoft is doing is strictly legal. I don't know how loose the laws are in South Korea. I do know that their version of the SEC isn't as stringent and that bribery and corruption are
not exactly unknown in the country. So is it really that hard to imagine that the numbers that NCsoft are reporting do not convey an accurate picture of what has actually been going on within the company, but an ideal picture of what they want investors to think is happening?
It's only natural to dismiss facts if they don't agree with our "gut". But how did closing our game, if it was doing as well as you are suggesting, help them?
My rationale for what I believe has
never solely been my "gut". I have repeatedly said, and I'll say again, that I have been told by multiple sources within Paragon Studios that City of Heroes was doing very well. I've even had people go so far as to say that it was doing better than appearances within the IR reports at NCsoft would have it appear to be doing. I was told some of this even before the August 31 announcement.
So someone is either lying, or at least mistaken. When such a conflict arises, I ask myself who has more of a motive to lie (or more likely to be mistaken), and who has more to lose? The Paragon Studios thing is done. NCsoft
clearly has more of a motive to protect its reputation and income by clinging to their position than some schmoes who have moved on and gotten new jobs with other companies, especially since
we're not the only people questioning it.
I also ask, who has been a more reliable source of information in the past? Well, we do know that NCsoft has been doing bupkiss for marketing the game, and they have committed what I consider at least two egregious lies when: 1) they told us that "all options have been exhausted", and 2) they shoveled the whole "
unsuccessful in finding a suitable partner" spiel on us via MMORPG.com. (And I have to point out that although Lincoln Davis made the statement, I do not personally pin the blame on him for this lie; he is the head of corporate communications, not executive management and not the financial guys who are spinning the numbers. I'm almost certain that he was only relaying a message that was given to him by higher-level management. He's basically the Zwillinger of the NCsoft corporate overlords.)
It also just doesn't make sense to me that Paragon Studios was committing to so many resources, staffed up to double what would be normal to work on another game, going full steam ahead with development of new features, items, and expansions for City of Heroes, if the management of the studio had any clue at all that they were considered in trouble or if he considered their income "paltry" over the last year or two. If Paragon Studios management didn't honestly believe that the game was doing really well, I have to ask you, why in the world weren't they going into big-time cost-cutting mode trying to save money and increase their bottom line? Meanwhile, everything that NCsoft has done since indicates that they are scrambling to consolidate operations and management at the home office in South Korea, really focusing more on the Asian market than the North American one.
No company would intentionally upset their customer base unless there was an upside to it, so what was it?
It's really simple. I really believe that NCsoft had no idea whatsoever that the outcry at the closure of Paragon Studios and City of Heroes would generate. I honestly believe that they expected to announce that it was all shutting down, people would say, "Gosh, that's too bad. Oh well, time to move on to Guild Wars 2!", and that would be that. I honestly believe that NCsoft has not one drop, not one microscopic speck, of clue when it comes to how western gamers tend to get attached to their game, their development staffs, and not so much to companies, how we don't view these games as just interchangeable cogs, that when one shuts down, we don't simply move on to the next big thing. So there's the bulk of your answer: NCsoft never considered that shutting down Paragon Studios or City of Heroes would upset their customer base.
And why would they? They had shut down Auto Assault, Exteel, Dungeon Runners, and Tabula Rasa without much outcry. The closest they came was Tabula Rasa, but to be blunt, that game hadn't really been around long enough to generate the intensity of feelings people had towards it to match what happened with City of Heroes. To be fair, if City of Heroes had shut down in early 2006, there probably wouldn't have been much outcry about it, either.
And what's the upside? As I've said repeatedly, I believe that NCsoft's current strategy is to consolidate operations and management to their South Korean corporate offices. The upside is that they have one less foreign subsidiary that they have to worry about, one that was probably getting a bit antsy due to what I think were (valid, in my opinion) feelings within Paragon Studios management that they were being jerked around and not supported by their publisher like they should have been. NCsoft had already had one subsidiary blow up on them and weren't keen on a repeat. The upside is that they wouldn't have to risk that. Just shut the whole thing down and be done with it.
