In response to NCsoft's communication on October 2, I want to start by saying yet again that I appreciate the support that NCsoft has given City of Heroes and its community for eight and a half years. Throughout this entire ordeal, I have had the implicit understanding (and publicly stated) that without NCsoft supporting City of Heroes at the outset, there likely would not be a game for us to fight for. We appreciate everything that NCsoft has done over the years to help build our community--things such as sponsoring conventions, meet-and-greets, and Player Summits; acquiring the intellectual property rights to City of Heroes from Cryptic Studios in 2007; and the financial support provided to Cryptic and to Paragon Studios as both were just starting out. For years, NCsoft has embraced City of Heroes as an essential part of NCsoft and helped to build its community into the wonderful one it has become, and for that, we are grateful.
I am not sure what changed, what made NCsoft decide that City of Heroes and Paragon Studios no longer fits within the long term goals of NCsoft. From multiple sources, it is my understanding that City of Heroes was still doing very well. Indeed, looking at the data provided by NCsoft's earnings releases, City of Heroes seems to be a steady performer in the NCsoft portfolio, even better than games like Guild Wars, which has received a sequel and continues to be actively supported. Nevertheless, it has never been my intention to question the business decisions made by NCsoft. If NCsoft does not wish for City of Heroes to be part of its portfolio going forward for whatever reasons, then I will respect that decision.
However, I continue to strongly feel that NCsoft is not seriously considering the option of allowing the City of Heroes intellectual property and code to be acquired by a third party. To be blunt, I do not understand how NCsoft can honestly claim that it has "exhausted all options." As long as NCsoft owns the City of Heroes property, it always has the option of allowing it to be sold. The only way that all options could possibly be exhausted is for a contract to be signed and the property transferred, at which time NCsoft would no longer have any say in the matter.
Perhaps the statement meant to say that NCsoft has exhausted all options it finds reasonable. If so, then I still disagree. While I do not know the details of negotiations that have been occurring between NCsoft and former members of Paragon Studios and/or other game publishers, I am aware that they have been taking place. I find it impossible to believe that these studios and publishers have not been able to offer any reasonable offer for the property. Also, I have reached out to NCsoft multiple times in an attempt to discuss the situation myself, to hopefully either make an offer on behalf of the game's players or, at the very least, to inform NCsoft of factors that need to be considered in negotiations with other studios. With the exception of the legal department providing an e-mail address for players to express their thoughts to NCsoft, I have received no response to my communications. If this is the case, then I strongly feel that NCsoft needs to seriously consider whether what it finds reasonable is, in fact, reasonable.
So I hope you understand that when I read that NCsoft feels that it has exhausted all options for keeping City of Heroes active, I find that statement disingenuous at best.
I feel that NCsoft is still looking at this issue as a question of, "What reasons do we have to sell City of Heroes?" In my communications I have offered several, including the obvious answers of providing revenue for other projects and the positive public relations that would come from a game publisher working with a community to achieve something almost unprecedented in the industry: keeping a game alive even after its publisher feels that it is no longer part of its long term plans. Maybe NCsoft feels that it has exhausted all options in coming up with answers to that question.
However, I think that an even more important question is: What reasons does NCsoft have to not sell City of Heroes? Because this is the question that really has me scratching my head. Are there legal issues? Of course, but are they insurmountable? Obviously not, as proven by the fact that NCsoft itself acquired complete ownership of the game in 2007 from Cryptic Studios. Is NCsoft afraid that City of Heroes will become a competitor with the company's other titles? Then hedge your risk by retaining an ownership stake in the title with no investment obligation. If it performs well, everyone wins; if it does not, NCsoft has not lost anything.
Are there other issues that are preventing the sale? If so, then tell us, and together we can figure out some way to work around it or compromise on a solution. I currently work for one of the largest IT companies in the world, and my full time is dedicated to a client who is also one of the largest manufacturing companies in the world. In my experience, there is no such thing as exhausting all possibilities in the business world. When a company wants or needs something to happen, it happens. When a company says that it has exhausted all possibilities, that means that it did not want or need it badly enough to continue trying. To me, our current status is simply that we have not yet convinced NCsoft well enough that it wants to sell City of Heroes.
What I think that NCsoft is not realizing (or possibly grossly underestimating) is that we as a community have a lot more at stake in the game at this point than NCsoft. The reasons we need NCsoft to continue working to allow the game to be sold are much more compelling. I could write for pages about the time and creative energy (and in some cases, much, much more) people have invested in the game, and as individuals, I know how important that is. However, in this response, I will address something that might be more compelling: money. NCsoft has invested money into City of Heroes, but the fact is, so have we. In fact, we have invested more money into City of Heroes than NCsoft has, as evidenced by the fact that the game was earning a profit. We have more than paid back NCsoft in revenue, and until August 31, were willing to continue doing so.
At this point, I feel that I have to point out that this profit from City of Heroes is part of what has made NCsoft's other titles such as Aion and Guild Wars 2 possible by funding their development. Hopefully you can understand the anger and disappointment we felt when a mere three days after Guild Wars 2 launched--a game that our money funded--NCsoft in essence kicked us to the curb and has now repeatedly denied us the basic dignity of continuing to exist as a community. While the money we have invested may not give us any legal standing from an ownership perspective, I believe that it does put an ethical onus on NCsoft to do whatever it can to allow the game to remain active.
So I want to make this clear: We have not yet exhausted all of our possibilities. To date, I have tried my best to be as deferential as I could to NCsoft in the spirit of staying helpful and productive to the negotiation process. I have worked hard and with utter sincerity to convince NCsoft that allowing the game to be sold is a smart business decision, as I am convinced that it is. However, it seems that these efforts have failed to make a meaningful impact, and NCsoft is apparently unswayed by our appeals to allow the game to be sold.
At this point, I intend to continue increasing pressure on NCsoft to further convince them that they should want to sell City of Heroes. Starting now, I am going to step up our media efforts, including reaching out to mainstream media outlets to further explore the issues of people pouring time and creative energy into gaming services that can be shut down at any time, even when they are making a profit. I will also be reaching out to Asian media, particularly in Seoul, so that they stop thinking of this as just a problem "over there" and so that we can reach people in their own back yard. I am going to be increasing our publicity efforts, including mobilizing the community to show up at events such as comic and gaming conventions to get the word out further of what is happening to communities that share a common interest. I am going to start a campaign of informing NCsoft's customers via avenues such as game review sites and media that NCsoft seems to have become a company that is willing to needlessly kill off gaming communities. I am going to be performing in-depth financial research into NCsoft to try to answer some of my own personal questions, such as why it is willing to shut down a profitable game, lay off 80+ employees, and kill one of its most active communities to reallocate resources towards... what, exactly? I am going to be reaching out directly to NCsoft investors to ask if this is really the direction that they want the company to be headed in, in the hopes that if NCsoft management cannot be persuaded, the people paying their paychecks and allowing them to run the company can.
I also want to be crystal clear that these are not threats. I have always said and will continue to say that I will be intolerant of any illegal activities, including activities intended to physically intimidate anyone or deny service to resources such as game servers. However, I feel that we are well within our rights to express vocally and loudly that NCsoft has not exhausted all of its options. This has always been and continues to be simply a matter of willingness to engage in good faith negotiations, and I intend to do my best to make NCsoft reconsider the question of why they are not allowing the game to be sold. While I appreciate the sentiments expressed of how proud NCsoft is of City of Heroes and how special a place it has in NCsoft's heart, we need more than sentiments. I have given my e-mail address and telephone number to NCsoft; they have demonstrated that they know how to reach me. So please, let's stop with the sentiments and figure out a plan for how together we will be able to keep the game going in such a way that we all benefit.
Sincerely,
Tony
Perhaps to pull this back on track a bit -- I want to whole-heartedly save CoH -- and have gnashed my teeth a bit about how to go about it. Ultimately though, I think we need to continue to move forward reasonably, operating under the assumption that the only feasible way to save it is if NCsoft continues to operate it. Why? Well, NCsoft won't (
or can't) sell.
Please consider the following scenario, without having numbers --
If the CoH IP is worth 10 million US and it only makes:
----- about 1 million US per year in profit, then it would take 10 years to recoup the initial investment, assuming a straight line return.
----- about 2 million US per year in profit, then it would take 5 years to recoup the initial investment, assuming a straight line return.
----- about 500,000 US per year in profit, then it would take 20 years to recoup the initial investment, assuming a straight line return.
We can play with the numbers for the valuation and the profit all you want, but when we start talking scenarios like this, a few things become clear. When considering the time-value of money, waiting 5+ years to begin making a profit isn't necessarily a good use of money, expecially for an out of the blue company that wants this to be its first/flagship game. Also, someone raising money to make that purchase will need additional money to get it up and running. If we consider someone like SOE or EA though, flush with cash ant not necessarily looking to make a direct profit from the game, adding a game like CoH could make a "station pass" offering much more palatable to its consumer base. Note:at one time NCsoft was considering this for its stable of games.
At this point then, if big players are not interested, then I doubt smaller players will be able to afford it, unless the numbers are much more optimistic (as noted, the example numbers are made up). That isn't NCsoft's fault, and could explain the "exhausting all resources" statement at such an early date. For us, that means the only savior is NCsoft (especialy if they still receive some amount of profit), and that means we need to convince them it is worthwhile to do it -- for continued profit and reputation. Gazing at the I24 patch notes, I can envision a spike in sales much like when Freedom first hit. I also think there's a lot of upside that was being built into the gamein I24, especially the LUA scripting, to make content a lot faster and more efficient. I'm sure the Paragon leaders have done their best to convince NCsoft of this, and that's their job alone. Our job is to show NCsoft our passion -- that lots of us want it and lots of us will pay for it.
