MMORPG - COH profitability

[Atlantea]

It does occur to me that NCSoft could claim CoH was not making any money with a perfectly straight face.  And they wouldn't be lying.

It not only did not make money from August 31 to Nov 30, it lost money as they were issuing refunds.

I posted about this very idea on the MMORPG article:



Note that the phrase - "The studio was unprofitable before the shutdown" - does not specify a timeframe.

Thus it is legally not a mis-statement or lie. But it gives the impression that Paragon Studios had not been profitable for longer than the 90 days when they didn't exist except as a notation in the budget, yet NCSoft still had to keep the game running and were issuing severance checks and then refunds.

So yeah. For those three months COH and PS was a drain on revenue, but it was hardly their fault. As the original article says - the numbers support the anonymous sources claims. But NCSoft is doing damage control.

The way the statement is loaded is meant to lead you to make a certain judgement that is not accurate. You are meant to assume that NCSoft is claiming that Paragon Studios was non-profitable while it was still an active studio. But NCsoft is not actually SAYING that. And yet they can claim that it was not their intent to mislead if they were to be called on it.

This is a classic case of "Spin". And many people have fallen for it.

And yeah - somebody needs to call them on it.

[Grot 6]

My personal feeling is that NC Soft just wants out of the American market.

Seeing as some of those same names of directors have some stake in most, if not all of Korea's bread and butter companies- Leaman Brothers being the ones that worked thier books, The financial situation at the time of the closure of the game, past experience with the other two + titles that didn't do so well in the states.
I feel that these so called "Directors" are only using NCSOFT as a tax break/ cash flush, and they have no real experience with MMO's.
As a "Business", NCSOFT is a joke. I see them tanking if they continue on thier road to ruin, and I do see a slight chance that they rethink thier offhanded execution of the game that we all know and love. As a side note, where are you guys getting your numbers on NCSOFT's other titles? Aside from Guild Wars, GW2, and AEION, what other games do they have? As a second caviot off of that question- are those games primarily european, or asian in thier fanbase?

Ask, because I don't really know anyone who plays either of the titles, and seeing the abysmal execution of the GW2 launch, I really don't see the titles as really even making the sort of money that people actually think they make.

If anything, and knowing how things go over there, I see this as a shell company, honestly.

[Floride]

I don't think that's the point being made. The point is, if any of those games were arbitrarily shut down much like CoH was, they wouldn't get anywhere near the level of response they got from CoH.

That was my point. Sure other NC games have a larger profit margin and playerbase, but as far as I'm concerned the profit margin is an invalid arguement. A grinder game takes less manpower to create and manage and will always bring in more cash because of lower expenses. CoH had higher overhead, as does WoW. Doesn't mean Blizzard should shut it down too in favor of games with less overhead. Games like CoH and WoW will outlive games like GW2 because they have staying power. Staying power is a power given something by a solid core of users who will not stray and forgive all shortcomings. And *rolls eyes* please don't point out all the bugs in CoH, the point is you still kept logging in 'forgiving' it's shortcomings, you 'solid core' gamer you.

NC just didn't know what it had. Pehaps it did but just doesn't care. The fact remains there's an enormous (now) un-exploited market here. I was being hypothetical about an Atlas Park in Champions btw. I just would've thought by now that someone would've seen all the moolah to be made by this community and at least try to tap this market, even their attempts failed.
As for Atari running Champion's - I don't play it and that's what I get for using wikipedia!  :o

[FatherXmas]

That was my point. Sure other NC games have a larger profit margin and playerbase, but as far as I'm concerned the profit margin is an invalid arguement. A grinder game takes less manpower to create and manage and will always bring in more cash because of lower expenses. CoH had higher overhead, as does WoW. Doesn't mean Blizzard should shut it down too in favor of games with less overhead. Games like CoH and WoW will outlive games like GW2 because they have staying power. Staying power is a power given something by a solid core of users who will not stray and forgive all shortcomings. And *rolls eyes* please don't point out all the bugs in CoH, the point is you still kept logging in 'forgiving' it's shortcomings, you 'solid core' gamer you.

NC just didn't know what it had. Pehaps it did but just doesn't care. The fact remains there's an enormous (now) un-exploited market here. I was being hypothetical about an Atlas Park in Champions btw. I just would've thought by now that someone would've seen all the moolah to be made by this community and at least try to tap this market, even their attempts failed.
As for Atari running Champion's - I don't play it and that's what I get for using wikipedia!  :o

That's a false comparison.  Blizzard isn't going to shutdown WoW because a grinder is cheaper simply because it brings in $1 BILLION is sales every year.  Now if it was making only $11 million in sales a YEAR like CoH then the question needs to be asked if the costs justify the profits or would that money be better spent somewhere else.

And there isn't a "enormous un-exploited market".  CoH had a monopoly on this market for 5 years and when it's first direct competitor in the genre came out, sales plummeted.  That implies that the market was already at saturation, there is no more growth there.  Then big NA MMO company Sony comes out with DCUO.  So now there are three games directly targeting the same small market of players for this genre.

Yes we have a great core community.  But that's not enough to support a game in the eyes of big corporate players.  Sadly lots of gamers look for shinny and CoH simply wasn't.  Between older, lower rez textures marring an otherwise pretty landscape to our mitten hands and limits due to a (likely) 10 year old simple animation rig our game just isn't sexy enough to pull in new players and no amount of advertising will fix that.  It would require a CoV/GR level of investment in rebuilding all of the animations, all of the textures, all of the costume pieces with little or no new actual content (as in missions).  And $11 million in annual sales isn't going to allow the kind of investment needed to do all that. 

Sorry.

Edit: Sorry that's $1 BILLION a year, not a quarter for Activision/Blizzard.

[JaguarX]

That's a false comparison.  Blizzard isn't going to shutdown WoW because a grinder is cheaper simply because it brings in $1 BILLION is sales every quarter.  Now if it was making only $11 million in sales a YEAR like CoH then the question needs to be asked if the costs justify the profits or would that money be better spent somewhere else.

And there isn't a "enormous un-exploited market".  CoH had a monopoly on this market for 5 years and when it's first direct competitor in the genre came out, sales plummeted.  That implies that the market was already at saturation, there is no more growth there.  Then big NA MMO company Sony comes out with DCUO.  So now there are three games directly targeting the same small market of players for this genre.

Yes we have a great core community.  But that's not enough to support a game in the eyes of big corporate players.  Sadly lots of gamers look for shinny and CoH simply wasn't.  Between older, lower rez textures marring an otherwise pretty landscape to our mitten hands and limits due to a (likely) 10 year old simple animation rig our game just isn't sexy enough to pull in new players and no amount of advertising will fix that.  It would require a CoV/GR level of investment in rebuilding all of the animations, all of the textures, all of the costume pieces with little or no new actual content (as in missions).  And $11 million in annual sales isn't going to allow the kind of investment needed to do all that. 

Sorry.

sad but true.

[Twisted Toon]

As a non native speaker myself, I can say that from time to time I get to meet a native speaker whose english is so terrible that it cures me of all insecurities I may have had for a good while.

As for pikabko, he appears to be incoherent and that's different from not having knowledge about grammar. I also remember him mentioning something about Reagan administration, making references to Supreme Court and other subtle stuff that is not so obvious for an outsider without intimate knowledge of american culture.

No one can mangle American English like a true American.  :P

[Knight Light]

That's a false comparison.  Blizzard isn't going to shutdown WoW because a grinder is cheaper simply because it brings in $1 BILLION is sales every quarter.  Now if it was making only $11 million in sales a YEAR like CoH then the question needs to be asked if the costs justify the profits or would that money be better spent somewhere else.

And there isn't a "enormous un-exploited market".  CoH had a monopoly on this market for 5 years and when it's first direct competitor in the genre came out, sales plummeted.  That implies that the market was already at saturation, there is no more growth there.  Then big NA MMO company Sony comes out with DCUO.  So now there are three games directly targeting the same small market of players for this genre.

Yes we have a great core community.  But that's not enough to support a game in the eyes of big corporate players.  Sadly lots of gamers look for shinny and CoH simply wasn't.  Between older, lower rez textures marring an otherwise pretty landscape to our mitten hands and limits due to a (likely) 10 year old simple animation rig our game just isn't sexy enough to pull in new players and no amount of advertising will fix that.  It would require a CoV/GR level of investment in rebuilding all of the animations, all of the textures, all of the costume pieces with little or no new actual content (as in missions).  And $11 million in annual sales isn't going to allow the kind of investment needed to do all that. 

Sorry.

Edit: Sorry that's $1 BILLION a year, not a quarter for Activision/Blizzard.

I disagree. It's all very logical but of course we all know how much logic has come into play in all this.

If it were possible, I would like to ask the Oracle to show me the world where NCSoft didn't utterly fail to promote City of Heroes in every market that it had access to. I live in a French speaking province that is rampant with gamers. The existence of the Vigilance server should have been touted far and wide around these parts, particularly when all servers became available to everyone, but the bottom line that comes across is that the great majority of people simply didn't know about us. That's all on NCSoft and I believe there was still a tremendous amount of possible growth, they simply left all the advertising to us and the game still did just fine.

Imagine what CoH would have done with genuine support from it's publisher.

[FatherXmas]

I disagree. It's all very logical but of course we all know how much logic has come into play in all this.

If it were possible, I would like to ask the Oracle to show me the world where NCSoft didn't utterly fail to promote City of Heroes in every market that it had access to. I live in a French speaking province that is rampant with gamers. The existence of the Vigilance server should have been touted far and wide around these parts, particularly when all servers became available to everyone, but the bottom line that comes across is that the great majority of people simply didn't know about us. That's all on NCSoft and I believe there was still a tremendous amount of possible growth, they simply left all the advertising to us and the game still did just fine.

Imagine what CoH would have done with genuine support from it's publisher.

I assume by Oracle you mean me?  I'm no oracle.

As for lack of advertising in Europe or Canada.  I can't answer that because I'm in the US.  But what kind of advertising did you want to see?  They advertised in magazines and when they went the way of the dodo they did what most MMOs do which is to put out press releases and offering interviews to the various MMO websites.  They had a presence in comic book shops and with box editions on store shelves.  Did you want TV because you weren't going to get it, not even when the game was earning $25 million a year, 5 years ago.  They even did a GameStop exclusive when GR came out.

If you want to blame NCsoft I'll blame them for not pushing time cards into the few stores that still carried PC games because when you don't have a current box set you need to show that your game is still around.  Sure the "Game" Card was a nice touch but it got lost among all the proxy currency cards for all the F2P MMOs.

Did you want newspaper ads?  Billboards?  A presence at every comic con or gaming con in NA?  You have to take into the cost of the advertising versus the number of new players that advertising brought in.  If it costs more than than you get from new players then it's not worth spending the money to start with.  That's why they looked to "free" advertising on MMO news sites.

I would love to hear what advertising options that they didn't persue that you think would have tapped new customers.  Speaking of you, what did you do to promote the game?  Word of mouth is a very effective means to promote a product.  Did you cajole your RW or online friends who weren't playing to try it?

[ukaserex]

As for lack of advertising in Europe or Canada.  I can't answer that because I'm in the US.  But what kind of advertising did you want to see?  They advertised in magazines and when they went the way of the dodo they did what most MMOs do which is to put out press releases and offering interviews to the various MMO websites.  They had a presence in comic book shops and with box editions on store shelves.  Did you want TV because you weren't going to get it, not even when the game was earning $25 million a year, 5 years ago.  They even did a GameStop exclusive when GR came out.

If you want to blame NCsoft I'll blame them for not pushing time cards into the few stores that still carried PC games because when you don't have a current box set you need to show that your game is still around.  Sure the "Game" Card was a nice touch but it got lost among all the proxy currency cards for all the F2P MMOs.

Did you want newspaper ads?  Billboards?  A presence at every comic con or gaming con in NA?  You have to take into the cost of the advertising versus the number of new players that advertising brought in.  If it costs more than than you get from new players then it's not worth spending the money to start with.  That's why they looked to "free" advertising on MMO news sites.

I would love to hear what advertising options that they didn't persue that you think would have tapped new customers.  Speaking of you, what did you do to promote the game?  Word of mouth is a very effective means to promote a product.  Did you cajole your RW or online friends who weren't playing to try it?

I can't speak for your corner of the world, but here in Mobile, Alabama, I remember when CoV came out. I went to Best Buy. They didn't have a copy. The PC game shelf was about 15 feet long, and WoW had about 12 feet of shelf space, with the other three going to games like Scrabble and the 100 games on a CD type thing. Game time cards? Simply not there.
CVS pharmacy had them up until December of '10, but I had to actively seek them out. There was never, ever anything that would have attracted a new player.
As for me, I started playing in Dec '05. I looked at the back of the box and figured it might be worth a look. I'd never heard of it before I found it in the far right corner of a shelf at Circuit City, looking for a Christmas present. I still don't get why they made it an MMO. Should have been a stand alone game to play without an internet connection. <shrug>

[Technerdoc]

It was the same here in germany. I was on the Games Convention, this was the time when Going Rogue was in developmenet but absolutly nothing was there to see from it, not even a poster or a flyer, no banner on the big gaming web sites just nothing. This wasn't much, the marketing was just not there and I never understand it.

[Knight Light]

No, I was referring to the Oracle of Greek myth. You have a lot of information but you're certainly no Oracle.

You wanna go ahead and ask for my credentials? Sure. I wasn't in the original beta but I'm an old timer by all accounts. I could say with a straight face that I've possibly logged more hours into City of Heroes than anyone else on these boards. I've half forgotten more about the game than most people ever learned. I spread the word about City of Heroes to every individual I met that could possibly have an interest. I got all my friends to try it and always provided a great experience for new comers to the game. I provided accurate information to people who needed [Help] across every server but Zukunft(sorry, I can't speak german). I never stopped playing, never unsubbed or moved to another game for a couple months. I played and helped people level until the very last day.

Maybe I wasn't going to get my TV ad but that doesn't mean it would have been a terrible idea. CoH wasn't given the presence in the media that lesser games have been given. No amount of you babbling logical facts is going to convince me that NCSoft couldn't afford a couple of tv spots a year.

The thing about City of Heroes is that it was niche game that had tremendous potential to reach outside it's borders. It's the kind of game that your little sister with no interest in comic books could sit down and thoroughly enjoy. It's the game you could introduce your wife to and she'd get hooked on it. There was an accessibility to City that you just don't find in other games. Put right up against every other MMO that's out there right now, simply as a means of communication, CoH was a deeply elegant tool. Marketed right, more than any other MMO I've seen, City of Heroes could have been a social media platform every bit the equal of Facebook. I'm not a marketing specialist but there is no way in hell that NCSoft did their due diligence on this. There was plenty of room to do more and stay within the budget.

[Minotaur]

You wanna go ahead and ask for my credentials? Sure. I wasn't in the original beta but I'm an old timer by all accounts. I could say with a straight face that I've possibly logged more hours into City of Heroes than anyone else on these boards.

I can probably challenge you on that. Basically never taken a break since I started in July 04, several hours every day with very few exceptions other than when somebody put a mechanical digger through my cable connection so I couldn't get on for a bit.

And I never saw ANY promotion anywhere for CoH in the UK. I only got a clue it existed when I saw a (comic reading, not sure if that's where he found out about it) friend playing it and thought "I could do that".

[Kaos Arcanna]

I started in early May 2004. My first 50 took about a year ... well over 1000 hours. I went on to have about 70 50s at the end. I also wrote a couple of vrtually novel length fanfictions about the game, so yeah. I played a lot. :D :D

[FatherXmas]

It was the same here in germany. I was on the Games Convention, this was the time when Going Rogue was in developmenet but absolutly nothing was there to see from it, not even a poster or a flyer, no banner on the big gaming web sites just nothing. This wasn't much, the marketing was just not there and I never understand it.

So this was 2009, 2010?  So a year or more after NCsoft massacred the Europe division down to a skeleton crew in 2008?  The staff that barely was able to get swag to a player ran herocon just down the highway?  Did they have anyone left there who could speak German or did they all get shipped to the US?

Did NCsoft have a booth at all there or did they but not have anything for CoH/Going Rogue?  If it's the first then they weren't supporting any of their games, not just CoH.

Personally I think they just don't understand advertising in the west.  In Asia with a high percentage of players playing out of gaming cafes, all you need to do there is to stock the cafes with posters or tie in offers of bonus time or goodies if you buy some time in the game.  Heck now in the US we barely have PC games in stores anymore except for the biggest of titles/series like WoW or Sims 3 with a sprinkling of new games that once sold out are never restocked.  It's sad when Target has a larger PC game display than Best Buy (would you like to buy a phone or a game console or a LED TV?  How about an iPad?  Laptop?  Refrigerator?).

Just for giggles I turned off Adblock and hit a bunch of MMO sites to see what was being advertised.  I saw the unreleased Marvel game being heavily promoted and Pathfinder.  That was about it.  I would be upset if I saw ads for NCsoft's other games but they simply don't advertise in our market.  I assume because I don't think it's worth it.

Edit:  Wait, from what I can tell the last Games Convention was in 2008.  Gamescom started in 2009 and NCSoft wasn't a feature attraction there until 2011 with GW2 and Wildstar and just GW2 in 2012.

[FatherXmas]

No, I was referring to the Oracle of Greek myth. You have a lot of information but you're certainly no Oracle.

You wanna go ahead and ask for my credentials? Sure. I wasn't in the original beta but I'm an old timer by all accounts. I could say with a straight face that I've possibly logged more hours into City of Heroes than anyone else on these boards. I've half forgotten more about the game than most people ever learned. I spread the word about City of Heroes to every individual I met that could possibly have an interest. I got all my friends to try it and always provided a great experience for new comers to the game. I provided accurate information to people who needed [Help] across every server but Zukunft(sorry, I can't speak german). I never stopped playing, never unsubbed or moved to another game for a couple months. I played and helped people level until the very last day.

Maybe I wasn't going to get my TV ad but that doesn't mean it would have been a terrible idea. CoH wasn't given the presence in the media that lesser games have been given. No amount of you babbling logical facts is going to convince me that NCSoft couldn't afford a couple of tv spots a year.

The thing about City of Heroes is that it was niche game that had tremendous potential to reach outside it's borders. It's the kind of game that your little sister with no interest in comic books could sit down and thoroughly enjoy. It's the game you could introduce your wife to and she'd get hooked on it. There was an accessibility to City that you just don't find in other games. Put right up against every other MMO that's out there right now, simply as a means of communication, CoH was a deeply elegant tool. Marketed right, more than any other MMO I've seen, City of Heroes could have been a social media platform every bit the equal of Facebook. I'm not a marketing specialist but there is no way in hell that NCSoft did their due diligence on this. There was plenty of room to do more and stay within the budget.

The oracle comment, I thought you were being sarcastic, calling me a know it all.  :-\

Well if you want to compare e-peens I joined up a week or two before Issue 2 in August of 2004 along with a group of friends.  Most who became bored within 6 months or decided they didn't have enough free time to warrant $15 a month.  I spent several years starting late 2005 helping players on the Tech part of the forum to get the game to run since CoV upped the requirements as well as needing a graphics driver upgrade.  It's not 2nd nature to everyone.   :o

Enough of that.  Could they have advertised it more, beyond the initial introduction of CoH, CoV and around the time GR came out.  Sure.   It might have even been worthwhile if they knew the best way to get it in front of likely eyeballs.  But they went the cheap press release route.  They couldn't get stores to stock even a few copies of any of their games on shelves.  Good Vs Evil which was suppose to be a big Walmart exclusive was messed up with the game not appearing on the shelves in most stores a month or more after it was suppose to.  Don't know if it was Walmart of NCsoft that messed up but it sort of takes the wind out of your placement in the circular for that week if the stores didn't bother to put it on the shelves and nobody was willing to check to see if it was just sitting in the back, unstocked.

Also since the time the game first came out, around me we lost CompUSA, Electronic Boutique and Circuit City leaving only Walmart, Target and Best Buy stocking PC games (in theory GameStop which absorbed EB stocked PC games but not much of a selection, no resale value).  And Best Buy's PC game department, along with their Movies and Music departments were displaced by their every growing phone store.

Gamers buy what's in front of them.  And with shelf space being slashed to bare minimums and limiting inventory to what sells regularly, pretty much any MMO that wasn't WoW older than six months vanished from the shelves or they at least didn't bother restocking after the original shipment ran out.

At least they did try offering the game on Steam for a very short time, I remember support issues on the forum.  Of course both CO and DCUO are still offered on Steam but for some reason NCsoft never choose to make their presence more permanent, especially now that their games are subscription free or hybrid.

So yes, they didn't either grock the how to advertise in the west or using digital hubs like Steam as a store front the way Cryptic or Turbine does once real stores vanished.  I don't think they totally abandoned us or their other games, they just didn't understand how things are here.  And it may also have been a control issue.

And what it looks like in Europe that they farmed out the running of Lineage II and AION to third parties, 4Games and Gameforge respectively.  So it looks like they are washing their hands of day to day operations there, getting someone else to handle the dirty work and just get a cut.

Wouldn't it be funny if they let Nexon take over running Lineage and Aion in NA for a cut of the item shop?  But no they've already created their "western" game management subsidiary.  Unless they are looking to sell the whole thing off for a cut.

Hmmmm.

[Knight Light]

No, I don't think you're a know-it-all, your posts have yet to leave me with the impression that you know everything. =oP

Kidding aside, I thank you for all the information you provide and I believe your viewpoint is necessary to keep us grounded but I believe down to my bones that NCSoft could have done lots more to promote the game and it's not good enough to say they didn't know how. You're a giant multinational corporation, you don't know how to do something, you hire somebody that does. They couldn't even employ a public relations person that was smart enough to tell them "You want to do what to City of Heroes? What are you stupid?" I have no doubt that City of Heroes could have easily been a household name in the hands of a more competent publisher.

[FatherXmas]

No, I don't think you're a know-it-all, your posts have yet to leave me with the impression that you know everything. =oP

Kidding aside, I thank you for all the information you provide and I believe your viewpoint is necessary to keep us grounded but I believe down to my bones that NCSoft could have done lots more to promote the game and it's not good enough to say they didn't know how. You're a giant multinational corporation, you don't know how to do something, you hire somebody that does. They couldn't even employ a public relations person that was smart enough to tell them "You want to do what to City of Heroes? What are you stupid?" I have no doubt that City of Heroes could have easily been a household name in the hands of a more competent publisher.

You mean like what Sony has done with DCUO?  Well lets wait four years and see if they are still promoting it, assuming it's still around.

You can't say either Warner Brothers or Sony don't know how to promote it's products.  Wait, when was the last time you've seen an ad for it?  :P

[Victoria Victrix]

In front of the Hobbit 2D showing across the country are ads for WoW and GW2.

Imagine what would have happened if in front of showings of Iron Man 1 there had been ads for CoH.

[Terwyn]

In front of the Hobbit 2D showing across the country are ads for WoW and GW2.

Imagine what would have happened if in front of showings of Iron Man 1 there had been ads for CoH.

Or in front of the Avengers...

Or any of the X-men films...

Or, for that matter, in front of Hancock. :)

[FatherXmas]

Let's see, Iron Man came out in May of 2008.  CoH still had around 70% of it's peak subscriber base.  Hmmmmm.

The question becomes how much?  How much to put together and show a theater quality trailer in front of a major motion picture.  With over a billion in annual sales it would be chump change for WoW but ArenaNet probably poured the majority of their ad budget for the year into that stunt rather than trying TV spots for the holiday season.  Also do we know if the ads ran just the opening weekend or are they still being shown?  I know they weren't in front of the midnight showing I went to, but that was just the vanilla 2D showing.

Also WoW: Mists of Pandaria and GW2 are both "new" titles, less than four months old while CoH/V would be celebrating it's 4th anniversary with Issue 12 just around the corner.  This would be before ultra mode so the graphics wouldn't be as pretty compared to other games at the time and on a 60 ft screen it might have looked downright bad with our relatively low poly models and limited high resolution textures and stilted (rooted) game play.  Of course WoW:MoP went with a rendered trailer and GW2 only showed a sequence of quick flashes of game play that for the most part didn't fill the screen, going to a mosaic of the logo.  And it was only 30 seconds long.

Also it's the holiday gift giving season.  The point was to highlight these two games as possible gifts.  No such reason in May, other than college graduation, in a poor job market. 

"It's too bad you have to move back in with your folks but here Davy, have a game that will suck up all your free time when you should be sending out resumes or working three part time jobs while waiting for someone to hire you.  I'm sure there are full time jobs for 18th century literature majors who were on the six year plan."  :roll:

Honestly, the best chance to get your money's worth is while the game is still new and during the gift giving season.