MMORPG - COH profitability

[eabrace]

Modhat on.
https://i2.photobucket.com/albums/y38/eabrace/titan/th_moderator_hat.png

Folks, I get that some of us feel it's necessary to point out cultural differences in corporate operations in on either side of the Pacific in order to better understand the minds in charge of decision making at NCsoft.  However, do try to keep in mind statements generalizing a culture (even if it is corporate) can be interpreted as racist or xenophobic.

Do me a favor: before hitting submit, think long and hard about whether your point can be made without the words/phrases "in Korea", "Koreans", "Korean business models", etc.  (Same goes for generalizations about Asian markets and gamers.)  If your point can be made without those words, take them out of the post.  If your point can't be made without those words, then please think long and hard about whether or not the point actually adds something valuable to the ongoing discussion before submitting.  If it doesn't actually add value to the discussion, please just move along without posting the comment.

[emu265]

Huh.  Not meeting their profitability goals is certainly a nice cop-out.  "We shut it down because it wasn't shoring up $1,000,000,000,000 a year!!" or something similarly ridiculous.  NCSoft's lack of figures to dispute the source is also a red flag.

[Noyjitat]

Everytime I read about people saying the game was losing players and subscribers the more annoyed I get. When someone spends 30 - 50$ a month or the richer players spending that a week on the paragon market thats like buying 3 months of subscription time at 14.99$ a month. Thats so much more extra income that you can survive without subscribers. Which was the intent of freedom. Just a bunch of clueless fools that either never played the game or stopped playing after the pvp nerfs.

Hell the first post in the thread is a guy talking about the subscriber numbers dropping in 2009. Well that was right after the pvp nerfs so ofcourse for awhile we were losing players. but if you were paying attention as I was shortly after freedom launch and every update thereafter the servers were becoming more and more crowded and I KNOW more people were subscribing because of incarnate trials. Which Require you to be subscribed to join them.

[NecrotechMaster]

also posted in the media thread, but relates to this topic, is an article on massivly mostly reiterating about the previous article, but also saying that they are trying to contact ncsoft regarding this info and will provide update

[Quinch]

So, one universe-directed wish granted. I wonder if I can upgrade to "and hopefully they'll keep walking through the bear traps".

Also, posted a slightly more... polite analysis of Davis' reply on Massively. http://fyre.it/HcnQVp

[Noyjitat]

I'm almost guaranteed to get my mmorpg account banned if I continue to post in that thread. That gaming community always was a bunch of clueless fools.

[houtex]

Wow.

Man, this really *does* scream "mean poopie heads" more than anything else.  The Phrase would not seem to apply.  This ain't business.  This is just... awful, and I'll leave it at that.

I almost want to take my other posts regarding The Phrase, but... I'm going to hold back just enough to see if NCSoft does their due dilligence and even attempts to actually prove with 'facts' and such their case... but yeah, this really does seem personal all of a sudden.

So... yeah.  Wow.

---

Quinch, that is an awesome post in there.  Nice.

---

VV, this here statement:

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.

That's... really sucky.  Isn't there some sort of whistleblower rules that might come into play?  I am seriously curious, and naive, about what these 'exceedingly unpleasant' action could be, and how it could be that NCSoft would have that kind of reach.

/Enlighten me, so I'm properly scared of companies, as right now... they ain't nuthin' but a bug to be squashed.

[Triplash]

That gaming community always was a bunch of clueless fools.

Yeah I've noticed that about a lot of those comments.

It's always boggled my mind how people can be content with thinking rumors and assumptions are equal to facts and explanations.

[Starsman]

I'm almost guaranteed to get my mmorpg account banned if I continue to post in that thread. That gaming community always was a bunch of clueless fools.

You mean like the dude arguing the "server merger due to low population" we endured is prove of CoH's horrible situation?

Seriously: some people are actually claiming the US/EU server list consolidation actually meant servers got merged together due to low population...

[dwturducken]

Modhat on.
https://i2.photobucket.com/albums/y38/eabrace/titan/th_moderator_hat.png

Folks, I get that some of us feel it's necessary to point out cultural differences in corporate operations in on either side of the Pacific in order to better understand the minds in charge of decision making at NCsoft.  However, do try to keep in mind statements generalizing a culture (even if it is corporate) can be interpreted as racist or xenophobic.

Do me a favor: before hitting submit, think long and hard about whether your point can be made without the words/phrases "in Korea", "Koreans", "Korean business models", etc.  (Same goes for generalizations about Asian markets and gamers.)  If your point can be made without those words, take them out of the post.  If your point can't be made without those words, then please think long and hard about whether or not the point actually adds something valuable to the ongoing discussion before submitting.  If it doesn't actually add value to the discussion, please just move along without posting the comment.

OK. I'll cop to using the wrong word. I wasn't making it a race or nationality thing, more of a "them" and "us" thing. I'm sorry if someone took it another way. The point I was trying to make was that NCSoft got burned (in their eyes) by a specific market, so they've changed how they deal with that market. Other subsidiaries in that market would be wise to watch their backs. Or something to that effect.

[Tubbius]

A short, simple assessment, having just read the MMORPG article. . . .

The NCSoft rep in that article comes off saying that the anonymous source's very specific statements and percentages are completely wrong.

As an English teacher, I look at this comment and reply, "Then, now, the burden of proof is on NCSoft.  If these statements being given as facts are wrong, then is it within the company's power to salvage its reputation by giving statements that are truthful?"

As it is, I have to say that I'm not convinced by this statement.  Maybe the percentages aren't 100% spot on, but to declare them totally wrong without giving any indication of the truth is odd.  It's well within their rights, as we're not entitled to any information at all as former customers, but it is certainly not helping their case in any way.

[Quinch]

I concur. Really, Davis' retort basically reads as a "no u".

[TonyV]

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

This is precisely one of my reasons for believing the anonymous source over NCsoft.  Here are my basic thoughts on the matter:

1) If the game was either not profitable or headed towards the territory of unprofitability, why would Paragon Studios management have tried to acquire the game?  This makes absolutely zero sense.  If the game was not profitable, then they wouldn't have even taken the game for free, let alone actually offered to pay good money to get it.

2) Why does NCsoft care if the company that acquires City of Heroes was "suitable"?  I mean, I can understand not selling it to someone who is going to kill it immediately, that would be bad PR.  But to say that not even the team that had been working on it for eight years was suitable to support the fans for years to come?  With all due respect, that's a bunch of malarkey.  The proposition that they shut the game down for our own good is a slap in the face of common sense.

3) Why would this anonymous insider say what he or she did, risking being sued if his or her identity were discovered, just to lie about what was happening?  As VV mentioned, this person has everything to lose and nothing to gain other than setting the record straight.

The thing is, prior to this article, I've heard from various people that NCsoft corporate tried on multiple occasions to throw Paragon Studios under the bus, to basically take the blame for the game and studio closure so that the publisher didn't have to face the negative PR of hamfistedly shutting down a profitable enterprise.

Up until now, I get the vibe that there's been an uneasy truce between the two:  NCsoft won't throw Paragon Studios under the bus and take the PR ding they rightly deserve (in my opinion, since they were the ones calling the shots), and Paragon Studios won't go airing dirty laundry about what was going on that caused the closure of City of Heroes.  It appears to me that truce is breaking down.  With this article, NCsoft lays the blame for the game's closure squarely on the doorstep of Paragon Studios and, to be blunt, us.

I honestly don't think that NCsoft will be able to keep a lid on this much longer.  I haven't talked to anyone with Paragon since this article was posted (geez, has it really only been less than 24 hours ago?), but I think the move NCsoft has played now, publicly stating directly that Paragon Studios was unprofitable, is going to have a bunch of people boiling mad and in the coming months more stuff will come out.  I guess time will tell.

I honestly salute the anonymous source who talked to MMORPG.  I have suspicions that I'll keep to myself, but I don't know who it is and honestly don't want to.  A lot of what he or she said is stuff that I've been hearing for months and trying to not-so-subtly convey to the community to let everyone know that we're not in the wrong here, but without some authority who would actually know what was going on speaking up, it was always just me winking and saying, "Trust me."  Of course, it's easy for me to talk all day about the subject and not have to worry about repercussions, but whoever this is really put themselves out there.

This is also why I'm really excited about the Plan Z projects and asking people to support them.  I am sincerely hoping that one or all of these projects can help break this notion that you have to have a big-time publisher with millions of dollars--and numerous strings attached to those dollars--to throw at a game to produce a high-quality product.  I don't want a community to ever have to deal with their developers still believing in a product with all of their heart and soul, just to have it yanked out from under them by a publisher because of the whims of corporate politics.

I've heard people saying that the era of really deep, engaging MMORPGs is dead, that this is the era of casual gaming.  I do think that there is definitely a place and a demand for causal gaming, but I think that the era of MMORPGs is alive and well.  I just think that people have woken up to how scary it is investing so much time, money, and energy into a product like this just to have it completely and utterly destroyed by clicking a few buttons.  Without any assurance that their work and creativity will last--indeed, with NCsoft making a dramatic example of how it doesn't--people are choosing to play more casual games that they care less about.  I mean, let's face it, if some developer shuts down another Bedazzled clone, will anyone really get worked up about it?

But if people actually have some assurance that there is a game out there that can't be shut down unless the developers and the community wills it so, I think there would be a big market for it.

[Minotaur]

Modhat on.
https://i2.photobucket.com/albums/y38/eabrace/titan/th_moderator_hat.png

Folks, I get that some of us feel it's necessary to point out cultural differences in corporate operations in on either side of the Pacific in order to better understand the minds in charge of decision making at NCsoft.  However, do try to keep in mind statements generalizing a culture (even if it is corporate) can be interpreted as racist or xenophobic.

Do me a favor: before hitting submit, think long and hard about whether your point can be made without the words/phrases "in Korea", "Koreans", "Korean business models", etc.  (Same goes for generalizations about Asian markets and gamers.)  If your point can be made without those words, take them out of the post.  If your point can't be made without those words, then please think long and hard about whether or not the point actually adds something valuable to the ongoing discussion before submitting.  If it doesn't actually add value to the discussion, please just move along without posting the comment.

I think this is very difficult to do. In the UK, we have a lot of industrial investment from the far east, mainly Japanese and Korean since the 80s but more recently also Chinese.

There has been a long stream of legal cases resulting from the cultural differences, usually something like the following:

A management job comes up
A well qualified European is passed over for somebody much less well qualified from the home country
The European takes them to an industrial tribunal and wins
The company pays out compensation but does the same again next time

The most egregious one of these I remember from years ago was actually a Japanese firm rather than Korean and the reason for not promoting the European was because he "had a face like a potato" (and no I'm not kidding, this was said in the tribunal, I did have a quick search for the case but couldn't find a report, the case is 20 or so years old).

Pretending that there are no cultural differences is silly, but I agree a sense of balance/fairness needs to be maintained.

[Technerdoc]

When this is really true and Paragon Studios was losing money so why didn't they say this when they close the game? There are so many smaller MMORPG out there, no one can tell me that when they are profitable a City of Heroes with such a fanbase was it not. You don't need 80 people to keep the game running and merging the servers was also a point where I never understand why they didn't do this in all the years. This sounds very fishy to me, I don't trust a company when they closing a game that way they have done with City of Heroes and all the other games like Tabula Rasa. It's simple to say now "...but we was losing money" but this is a little bit to simple for me.

[Floride]

So NCSoft is now openly lying about the games profitability.
So... what WAS the reason they shut it down. They had to have one.

Maybe it was personal. Maybe some NCSoft executive's wife left him for a guy she met in CoH, and the executive took childish retribution on the game.
LOL, after typing that I realized it's the only explanation so far that makes sense!  I'll stop now before I end up starting rumors ;D

[WildFire15]

So NCSoft is now openly lying about the games profitability.
So... what WAS the reason they shut it down. They had to have one.

Maybe it was personal. Maybe some NCSoft executive's wife left him for a guy she met in CoH, and the executive took childish retribution on the game.
LOL, after typing that I realized it's the only explanation so far that makes sense!  I'll stop now before I end up starting rumors ;D

With the idea that Paragon wanted to buy themselves out over a year ago and following the mess with the Garriots, NCsoft may have wanted to make some sort of example of them to their other studios, or make themselves look strong in front of their investors. It does seem pretty clear NCsoft didn't trust Paragon or CoH any more, especially with them shooting down a possible sequel.

Also, according to TonyV, he's spoken with people who said NCsoft wanted to let Paragon fail. I dare say NCsoft let Paragon hire and work on a new project so they would fall into the red, seeing as City of Heroes on it's own wasn't doing that for them. I'm surprised they waited so long to pull that card, but I dare say it was a set up so if Investors asked why a profitable game was shut down, they could point to the studio and say 'see, not doing well'.

[Manga]

With the pieces of information I've been collecting added to this article, I think I now have a pretty clear picture of why NCSoft killed City of Heroes.  The progression of events now makes perfect sense, and probably looked something like this:

1.  Way back over a year ago, Brian Clayton gets sick of increasing and ridiculous demands from a now unstable and for some reason paranoid and panicked NCSoft.  Whatever the reason for their behavior, Clayton sees the writing on the wall - that sooner or later, the minor squabbles he has to negotiate will become an epic butting of heads.

2.  Clayton takes a risk and calls a department heads meeting (you don't want a meeting like this at low levels, so someone leaks to NCSoft) telling them what's happening, and basically asking them for support in a management buyout attempt.  He explains that it's very risky, because NCSoft could retaliate by removing all management.  They agree and stand behind him, and he starts to proceed.

3.  He opens negotiations with NCSoft, fully aware that this could be a huge success, or he could get himself and all the Paragon management fired.  What happens instead shocks even him - NCSoft threatens him that if the subject of a buyout is ever brought up again, that all of Paragon Studios will be punished as a result.  He doesn't know what they mean by punished, but he is shocked that they would punish *everyone*, not just the managers, so he backs down to protect the studio and people's jobs.

4.  NCSoft smells blood in the water after Clayton's first negotiation failed.  They begin making even crazier demands, and attempting to micromanange the operation of Paragon Studios, bypassing management completely and issuing edicts directly to employees.  They give the studio completely unobtainable goals, warning them that they *must* meet these goals or there will be consequences to people's jobs.

5.  At some point, NCSoft notifies Paragon management that the studio will be absorbed completely into NCSoft Korea and that Paragon management will no longer be necessary.  This would be around the time we got the NCSoft launcher without much warning. 

6.  Clayton sees the inevitable at this point, and realizes that it's not just management jobs that are in jeopardy, it's the U.S. based employees and developers as well.  NCSoft is trending toward centralizing all operations in Korea *anyway*, and their recent contact with him and other managers gives them just the reason to dissolve the studio and bring CoH directly under NCSoft Korea operation.  And he believes the wheels are already turning.  The layoffs are coming *very* soon.

7.  In an effort to save the jobs of the good people at Paragon Studios, Clayton tries a roundabout method of negotiating again with NCSoft about a management buyout, trying to win the independence of the studio without pissing off the mother ship.  He does not believe they will actively punish the entire studio over his attempts, because he believes they are reasonable.  And he believes the risk is negligible because a lot of people would be losing their jobs anyhow.

8.  NCSoft does not reply at all to Clayton's request for negotiation.  The painful silence lasts for quite some time.  Then comes their answer.

9.  A few days before Aug 31st, NCSoft prepares a memo to Paragon Studios managers and employees.  The entire studio is closed.  Everyone is fired.  City of Heroes will be shut down immediately.  The night of August 31st, everything ends.  This is the punishment that NCSoft has been threatening, and it's worse than any of the managers who agreed to attempt a management buyout could ever have anticipated.

10.  Clayton does not tell managers or employers right away.  Instead, he urgently pleads with NCSoft to give him more time to negotiate.  They give him 90 days - on the contingency that he can no longer save the studio.  They will give the game 90 days, and he will have that time to prove himself to them.

11.  We all get the announcement that Paragon Studios will shut down on August 31st, and City of Heroes will sunset 90 days later.  Paragon Studios employees get the notice at the same time.

12.  Clayton, now supported and emboldened by the collective will of CoH players, begins negotiating with NCSoft in earnest.

13.  NCSoft uses the negotiations to warn leftover and former employees and Clayton about keeping quiet, and about reigning in player protests.  They have the intention of carrying through their punishment of Paragon Studios, but they string Clayton along, long enough to ensure a quiet sunsetting.  It does not work.

14.  NCSoft blows off all attempts at a buyout of City of Heroes.  The shutdown continues on schedule.


The latest press release from NCSoft confirms a lot of the story, oddly enough.  Up until the attempted management buyout, NC felt Paragon was okay as long as they did as ordered and followed the mother ship loyally.  After, though, they felt Paragon was a rogue element that must be purged, and they came close to doing so.  When that was no longer enough, it escalated to cutting off the rogue limb entirely to preserve order within the company.

[Quinch]

It's an... interesting theory, but it kind of lacks proof. Some bits, like the NCsoft launcher, were announced way in advance as well.

[FatherXmas]

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.

MMOs are essentially a service.  Now there are plenty of MMOs out there and they are fighting over the same set of customers, since the customer only has a fix amount of money and time to devote to playing MMOs. 

Now if a customer in one of your games becomes bored and want to try something else, the company would want them to play another of their games and not a competitor because of a chance of losing them for the long term.

So why would you empower a new company, a competitor, with your precious list of customer without compensation?  What if this new competitor starts producing additional MMOs that they can now market to your now shared customer list?

There were far more players who have joined and quit CoH over the last 8 years than those who were left at the end.  It wasn't a "small" list.  Some number of those players also play(ed) NCSoft's other titles as well, and may still be.  Would you be willing to give a competitor a direct line to them?  How much would you price that information?