MMORPG - COH profitability

[chasearcanum]

Whoa, some serious modding just happened here.

It went from 4 pages --> to 3 pages, and responses I just read are gone.

That was trippy.

/em placate

These are not the forum posts you're looking for...

[corvus1970]

Uttering the phrase, "It's just business", needs to become illegal. So sick of it being used to excuse every heinous thing that corporations do.

I couldn't agree more. That and "I was just following orders."

[Little Green Frog]

In spite of The Avengers, repeated remakes of Spiderman and the Hulk. Thor, Green Lantern, Superman, Batman, Catwoman and more in the making - we think this whole Super Hero thing doesn't work - in Korea.

Korea wanted to shutdown an independant American studio and the studio said well if you won't work with us we will buy it out.

Korea said no after saying maybe.

Since CoH wasn't making WoW money putting up with uppity Americans wasn't worth the measely $12 million a year - if it was $120 million we would consider it.

Is it really necessary to make it all about nationalities of interested parties again?

[johnrobey]

Is it really necessary to make it all about nationalities of interested parties again?

I'm with you, Frog.  This isn't about NCSoft being Korean that I'm aware of; it's about how this corporation handled things with Paragon Studios, the CoH community, and the waffling things they say whenever they do talk about why and the circumstances around their closing CoH.

[dwturducken]

I don't think that it's about NCSoft being Korean so much as Paragon was American. Their last dealings with an American studio soured badly, so all of the "independent" American studios under their umbrella are likely under scrutiny. Also, decisions have been more centralized at the home office. Xenophobia is nothing unique to any particular nationality. Japan had it down for a couple of centuries, but I think that America has raised it to an art over the last twenty years.

[Kosmos]

"The studio was unprofitable before the shutdown."

This actually could be true. Note that they say "studio" and not "CoH". Paragon may have been unprofitable, what with the secret project, and especially if they were deliberately loading up the costs on the PS ledger by charging a fortune for hosting to move profits from tax heavy California to tax friendly Texas.

[Ironwolf]

It is not Xenophobia.

NCSoft has been a resounding failure everywhere they have tried to operate outside of South Korea.

Their style of operation and gaming choices reflect a complete unwillingness to change. Their latest "investments" in a slight merge with Nexon is more of the same. Note they didn't merge with Valve or any other western company. I am not racist nor waving the all American flag. I am saying they had an asset who they found hard to work with through either their fault or the studio's.

I see the reactions that NCSoft give and it is pure Corp speak for shut up and go away.

Now they are getting angry soon we win. The story isn't going away - it gets BIGGER.

[Todogut]

I've heard comments about CoH closing by people who say things like, "The game went free to play... that showed they were desperate and losing money... it foreshadowed the closing."

But, commentary on the MMOrgue (at 17 minutes) indicated that CoH had to go free to play... because the competition did. If a kid wanted to play a superhero MMO, and Champions Online and DC Universe Online were free while CoH cost $15 a month, which game would he pick?

CoH changing to F2P wasn't a sign that the game was doomed. It was a sign of the changing industry. But, the game was still making a lot of money.

Just not enough for NCsoft.

[TimtheEnchanter]

I'm with you, Frog.  This isn't about NCSoft being Korean that I'm aware of; it's about how this corporation handled things with Paragon Studios, the CoH community, and the waffling things they say whenever they do talk about why and the circumstances around their closing CoH.

If nationality has anything to do with it, true, it's not about NCsoft being Korean. It's about the differences between how NCsoft treats Koreans vs. Americans.

[Atlantea]

It is not Xenophobia.

NCSoft has been a resounding failure everywhere they have tried to operate outside of South Korea.

Their style of operation and gaming choices reflect a complete unwillingness to change. Their latest "investments" in a slight merge with Nexon is more of the same. Note they didn't merge with Valve or any other western company. I am not racist nor waving the all American flag. I am saying they had an asset who they found hard to work with through either their fault or the studio's.

I see the reactions that NCSoft give and it is pure Corp speak for shut up and go away.

Now they are getting angry soon we win. The story isn't going away - it gets BIGGER.

I agree. It is not Xenophobia on OUR part, but THEIRS that is the issue. We the players and community never even considered whether the nationality of NCSoft was an issue before the announcement of the shutdown. For days and weeks even after that it never came up. It finally came up when all attempts at communication were rebuffed and we were trying to figure out ANY reason for that or any of their other decisions.

It was part of the attempt to UNDERSTAND them that brought NCSoft's nationality into the equation. We couldn't figure them out. We were trying desperately to understand what mindset could produce these decisions, because just simple "corporate mindset" didn't seem to cover the bizarre (to our way of thinking) decisions. So we were FORCED to consider the culture and nationality to attempt to get a handle on the thought process. Thus the threads on "Kibun" and Korean culture and how they related to the particular corporate culture of NCSoft.

And most of us have not made a judgement call on the culture itself. We don't assume that their culture is better or worse than ours. But we feel we have to include it in the equation in order to make informed conjecture and decisions.

Assuming your culture and way of doing things is superior and another culture is inferior and refusing to adapt your business practices to the other culture a single iota would be more of a sign of Xenophobia than what we have been doing on these boards.

[johnrobey]

And done.

Thanks Rae!  You, TonyV, and theQuinch are my new favorite heroes for the day! (the latter 2 for what they posted at MMORPG.com in response to their article.)  I'm very much hoping the Korean Times journalist picks up this story again.

[ukaserex]

There's one side, there's the other, and somewhere in the middle is the truth. Can't remember who said that but its pretty a good guideline.

I recall writing something on the CoH forums "There are three sides to every story: His, hers and the real one."
The same is true now.  :)

[FatherXmas]

My take on the various points of the story.
       

CoH was profitable even before they converted to Free to Play but were even more so after the conversion.

There was a bump in sales the first quarter of Freedom according to NCSoft's quarterly reports but it vanished the next quarter as the game hovered between $2.5-3 million a quarter.

The studio's total annual operating cost was 4 million USD.  They grossed 12 million in revenue annually.

I don't believe the studio cost, not in NorCal adjacent to Silicon Valley and not with 80 people.  The 12 million in annual revenue does jive with NCSoft's revenue numbers for the last 12 months the game sales were broken out.  Now I might believe that's the portion of the studio cost devoted to CoH development.

NCSoft paid $8 million USD to buy CoH. They wanted $80 million USD to sell it. They only value it at $3 million for tax purposes.

And...?  They got a good deal and they weren't willing to part with it.

CoH had a high retention rate. Subscribers had a stick rate of 95-98%.

There were a lot of old timers like me who were joined and they stayed because the game just clicked with them.  However in the last year or two, only those devoted to the game were left, which is why the retention rate was so high.

NCSoft has no plans for a CoH 2.  Paragon wanted to do it but NCSoft was growing ever more uncomfortable with a Superhero IP, worried that it wouldn't work in today's market.

This lends credence to my "will it play in Busan" theory.  They didn't see the genre doing well in their primary market of Asia and weren't interested in funding the development of another game in the genre.

Brian Clayton tried to orchestrate a management buyout of Paragon starting over a year ago because it became progressively more difficult to deal with NCSoft. They had created a Kickstarter page and a campaign video, but it never went to press.

I will assume this is true but considering NCSoft wouldn't sell off what was a short lived MMO with a shrinking population, Auto Assault, back to it's developer NetDevil, what did Brian expect?  Going back to the $80 million sell figure, if true, I could see that be the price of all the player/customer data.  NCSoft would be giving up to a new industry competitor a very important asset, their customers.  And not just the active ones but everyone who ever played the game or tried the demo.

They (Paragon) had a second project in the works. It was a compromise to not being able to make CoH 2.  It was the show "Lost" meets Minecraft.  You crash-landed on an island and you were able to build your own fortress and weapons. You teamed up with other players to tackle the mysteries of the island.

Again with the "will it play in Busan?"  The current crop of "new" MMOs from NCSoft (Aion on) all fit in a certain mold.  If this idea didn't, well...

NCSoft tried to work with Paragon, they really did.  But the profits were not what they needed to be, and CoH/Paragon were the weak link in NCsoft's lineup moving forward.

Nothing to comment about here.

Oh, and it's "Understanding is a three-edged sword; there is your side, there is the other side, and then there is the truth."

[Victoria Victrix]

Well, the "anonymous source" of the article matches point by point with what I have heard from B.  But how the anonymous source PHRASES what he said is different from how B. speaks, which leads me to believe that the "anonymous source" is someone other than B. who also formerly worked at Paragon Studios.

In other words, two people, who are telling the same story.

If you are wondering why the source needs to be anonymous, it has been indicated to me very strongly that even though most former Paragoners now have jobs, NCSoft can and will take some unspecified but exceedingly unpleasant action against them if they ever have confirmation on who is making the leaks.   I  believe the person telling me this, based on NCSoft's actions in the past.

On the one hand, we have former Paragoners, who have always been honest with us, and who have always listened to us.  Most of whom finally have found new jobs, and thus have nothing to gain or lose by telling us the truth as long as their identity is protected.  And who would not need their identity protected if what they had to say corroborated what NCSoft has to say.

On the other hand, we have NCSoft, which has a history of outright lying, betrayal, and simple deceit that has gone on from the time they entered the US marketplace.

I know who I trust.

[Atlantea]

I will assume this is true but considering NCSoft wouldn't sell off what was a short lived MMO with a shrinking population, Auto Assault, back to it's developer NetDevil, what did Brian expect?  Going back to the $80 million sell figure, if true, I could see that be the price of all the player/customer data.  NCSoft would be giving up to a new industry competitor a very important asset, their customers.  And not just the active ones but everyone who ever played the game or tried the demo.

What customers? There's an extremely negligible percentage of former COH people who have gone on to play GW2. And almost every one of those was pre-ordered before Black Friday. 

Look around, do you see very many people who were players and fans of City of Heroes who are willing to trust their money to NCSoft again? I sure don't.

What is it they hope to gain by sitting on data that's useless to them? I say again - all those accounts? GONE. Useless. They've gone to other non-NCsoft games ANYWAY.

But then again, if they are truly intending to completely abandon the Western Market as a whole anyway, I suppose that bad press wouldn't matter to them in the long run. They know they're not going to be doing business here within 2-5 years anyway.

[Surelle]

It's interesting how the total silence that NCSoft has put forth for four months straight is suddenly broken.  My first reaction was,

"Boy, that anonymous source must be pretty high up in the Paragon Studios food chain to get such a reaction, and is dredging up NCSoft's Chief of Corporate Communications to boot!"   :P

Little did they know that, instead of blindly closing down one NCSoft game launcher for the last time and then clicking the next one open as soon as it was available, we not only screamed bloody murder instead but the cacophony has gotten louder and more stubbornly set in its ways as time has gone by.

[Victoria Victrix]

You know, here is another factor.  Ask who stands to gain or lose by lying.

Former Paragoners gain nothing by lying about how profitable the studio was.  Absolutely nothing.  They have jobs.  If NCSoft discovers who is talking, they can actually lose by lying.  And if they are uncovered as lying, they lose their reputation.

NCSoft on the other hand has everything to gain by lying, and nothing to lose if they are uncovered as lying, because in the west I think their reputation is finally shot and is bleeding out.

[Terwyn]

And by now, if they start to tell the truth, it's already too late.

We hit their Femoral Artery. :)

[Little Green Frog]

I agree. It is not Xenophobia on OUR part, but THEIRS that is the issue. We the players and community never even considered whether the nationality of NCSoft was an issue before the announcement of the shutdown. For days and weeks even after that it never came up. It finally came up when all attempts at communication were rebuffed and we were trying to figure out ANY reason for that or any of their other decisions.

It was part of the attempt to UNDERSTAND them that brought NCSoft's nationality into the equation. We couldn't figure them out. We were trying desperately to understand what mindset could produce these decisions, because just simple "corporate mindset" didn't seem to cover the bizarre (to our way of thinking) decisions. So we were FORCED to consider the culture and nationality to attempt to get a handle on the thought process. Thus the threads on "Kibun" and Korean culture and how they related to the particular corporate culture of NCSoft.

And most of us have not made a judgement call on the culture itself. We don't assume that their culture is better or worse than ours. But we feel we have to include it in the equation in order to make informed conjecture and decisions.

Assuming your culture and way of doing things is superior and another culture is inferior and refusing to adapt your business practices to the other culture a single iota would be more of a sign of Xenophobia than what we have been doing on these boards.

Please... Just stop.

[Aggelakis]

This is why we can't have nice things. Please stop bringing race, country, creed, ANYTHING other than FACTS that you KNOW into the picture. You cannot guarantee that anything is being done because it is a Korean thing vs a business thing vs GIANT JELLO thing. So please just stop.