MMORPG - COH profitability

[Copper Cockroach]

https://i.imgur.com/Fcx2a.jpg

[dwturducken]

http://video.adultswim.com/the-venture-bros/rubber-and-glue.html

[corvus1970]

ROFLMAO, Corvus!   I'm howling at Exec #3's lines!!!  8)

Thanks JR. I'm glad someone got a kick out of it :)

[Atlantea]

To keep this on-topic, here's a rather interesting post from the MMORG site in question.

Firstly, retention rate.  Yes the figure is month on month.  Further, anything over 90% is HUGE in the industry, like, industry leading level.  City of Heroes had that.  The one and only thing it didn't have was *any* commitment to marketing at all from NCsoft.

Every business in the world has what is called an attrition rate.  No matter how loyal your customers, people's situations change.  They move, they marry, they even die.  Basic business 101 says it this simply: "Any business that is not actively growing its customer base is losing it".  Any and every business in the world must do enough marketing to attract new custom to counter attrition rates or it will die.  NCsoft did no noticeable marketing of CoH at all except in some minimal cross-selling from its other titles that it did advertise and promote.

It is an unquestioned and unarguable fact that NCsoft completely failed to even try to grow the game's market, and allowed natural customer-base attrition to reduce market share unchallenged.  Check those facts any way you like, you won't change them.  NCsoft completely fail business 101 in this regard, and one surely has to suspect this was deliberate.  You don't overlook something that basic to all business.

This is why people say that NCsoft did their deliberate damndest to kill CoH.  It is that obvious, and the ONLY question about it is "Why?" not "Did they?".

Costs: Paragon Studios only significant costs were the business premises at US costs, and staff at US costs.  These would probably seem high to a company mainly based in Korea.  But they'd seem very low to a company based in Tokyo or Hong Kong, so you would expect most Asian companies to be quite happy with them.

80 staff was a ridiculously large number for CoH, and in fact many of those staff were primarily working on new projects such as the new game mentioned, never really contributing to the money-maker of CoX at all.  So while costs for staff were indeed far higher than needed or expected for this game, a large amount of that was in pure R&D for the next generation product (new games).  20 staff would have been more than enough to maintain the game, and even halving the staff to 40 would have meant easy full continuation, plus plenty of new products in the cash-shop every week, as was happening.

Again, a fact which is unquestioned and unarguable is that NO attempt was made to reduce staff to reduce costs.  In fact, our information is that a large number of those 80 were only taken on as GROWTH in the 12 months prior to the unexpected closure.  These additional staff were taken on to develop the next generation products, and to help add goods to the cash-shop faster.

If a game is at all questionable in income, why would you hire more and more unneeded staff?  The fact that they did so is easily confirmed.  Not only did NCsoft NOT try at any time to reduce unnecessary extra costs, they actively allowed Paragon to grow its costs in ways that did not contribute to the existing profit, and were only working on R&D of future products.

Profits:  City of Heroes made around 170million dollars US in its 9 years.  Not bad for something bought for under 8 million, eh?  Even in its final months it was certainly generating revenue of over $10million USD per annum, and this was growing with the further refinement and adoption of the new cash-shop (which doubled revenue after its adoption).  It would have been more profitable if NCsoft were not having Paragon hire more staff to work on R&D that did not directly produce any revenue.

As a professional in online business, with over 18years experience, I can see no possible way that City of Heroes and Paragon Studios were not profitable to at least 3-4 million per year, (unless someone at NCsoft were charging 4 million a year in wages to audit or oversee Paragon).

(Comment: The below is the most interesting part:)

Since annonymity bothers some, then let's put it aside.  My name is Ammon Johns, and I work as an Internet Marketing Consultant.  I speak at International conferences, and my clients are predominently large national and multinationals, including banks, insurance companies, online stores, charities, and portals.  I also work for small local and specialist businesses online.  I've worked for many of the sites you probably know and use yourself.  I don't specialise in the game development industry at all, but I work with every level of internet market.  I am considered a world expert in marketing online.

The above are my own findings from digging through many sources, and from using my contacts and network.  That's not to do the big "I am", that's simply to head off anyone asking if I know what I'm talking about.  I will welcome discussion to challenge any of my own findings, just cite your sources and experience when you do so.  Oh, and no anonymity, right? ;)

I did a name search and instantly this site floated to the top:

http://www.ammonjohns.com/

Along with a host of other sites that mention him. Including his twitter feed and his entry in linked-in.

Maybe we should contact him?

(EDIT: Although maybe we should contact him and ask him if he in fact made this post himself and not an imposter, just to be on the safe side.)

(EDIT#2: Just thought I'd mention the reason why I'm posting this and re-posting his comment is - I'm just thinking that if this is for real, I wonder what expertise he might lend to our cause? If nothing else, a guy like that has to have some interesting connections. )

[Lily Barclay]

To keep this on-topic, here's a rather interesting post from the MMORG site in question.

I did a name search and instantly this site floated to the top:

http://www.ammonjohns.com/

Along with a host of other sites that mention him. Including his twitter feed and his entry in linked-in.

Maybe we should contact him?

(EDIT: Although maybe we should contact him and ask him if he in fact made this post himself and not an imposter, just to be on the safe side.)

(EDIT#2: Just thought I'd mention the reason why I'm posting this and re-posting his comment is - I'm just thinking that if this is for real, I wonder what expertise he might lend to our cause. If nothing else, a guy like that has to have some interesting connections. )

He's the fourth member of team wildcard. He's Ammon here.

[Atlantea]

He's the fourth member of team wildcard. He's Ammon here.

(Homer Simpson)  "D'OH!"  (/Homer Simpson)

Never thought I'd do this to myself, but ---

https://i.imgur.com/d8uduPY.png

[Lily Barclay]

(Homer Simpson)  "D'OH!"  (/Homer Simpson)

Never thought I'd do this to myself, but ---

Lol. It's ok. Reading NCSoft's stupidity must be having detrimental effects. XD

In seriousness, we're lucky to have the big guys on our team. NCSoft messed with the wrong community.

[Terwyn]

I believe that qualifies as a relativistic weapon aimed at NCSoft, now, doesn't it?

[TimtheEnchanter]

I believe that qualifies as a relativistic weapon aimed at NCSoft, now, doesn't it?

Relativistic weapon? You mean like a bomb that curves space?

[Terwyn]

No, I mean what happens when you accelerate a tiny amount of mass to an extremely close percentage of the speed of light.

Rough numbers, one gram accelerated to 90% of the speed of light will have the equivalent of 1.2 x 10^14 joules, or the equivalent of 29 kt of trinitrotoluene (TNT). The bomb dropped on Hiroshima, for comparison, was only about 15 KT.

In non-metaphorical parlance, Ammon's comments are far outside what NCSoft is prepared to deal with.

Essentially, NCSoft has three (or more) possible options in its response - disprove, deny, or disappear.

The problem is, if it tries to disprove Ammon's statements, it will have to do so contrary to the available evidence.

If it tries to deny the statements, it will simply appear to do what it has always been done - evade answering necessary questions.

And, if it tries to make the statements disappear, those statements would be proven right by proxy.

All in all, this puts NCSoft's PR office in a tight spot. He obviously knows what he is doing.

[Mentalshock]

Relativistic weapon? You mean like a bomb that curves space?

Why am I not surprised that the minute I press the button to respond to this, the other half of the hive mind has already done so?


   Basically, the sum total of the reason why Sir Isaac Newton is the DEADLIEST SOB IN SPACE.

[Victoria Victrix]

I can confirm this is our Ammon, since this statement is in part cut-and-paste (or rephrase) of things he has said in our discussions of Team Wildcard strategy.

He is also VERY famous in internet marketing circles.  In fact, he is, literally, the first person to ever call himself an "internet marketing specialist."

We're very privileged to have him, and we list him as lead on Team Wildcard pitches.

[Terwyn]

Considering I recently graduated from a marketing program, I know his name from several of my textbooks covering on-line marketing. :)

We are really lucky to have him.

[Tubbius]

WOW.  :o

This man very clearly knows his stuff.

Looks like the ball's in NCSoft's proverbial court.

[Captain Electric]

NCSoft will not squirm at all because of a comment that is buried beneath an article that is piling up with hundreds of comments.

Get in touch with the Korean Times reporter who took statements from Mercedes and the Korean business analyst, and have them do a nice thorough interview with Ammon, one of the world's most respected Internet marketing specialists. Everything Ammon said in that comment--say it to the Korean Times.

Bam.

About time we give NCSoft another black eye, anyhow; I think they're starting to get a little too cocky over there. We need them to sell the game and IP; but that's never going to happen if they make an uncontested habit out of throwing Paragon Studios and City of Heroes under the bus for the "strategic" blunder they made.

[Terwyn]

NCSoft will not squirm at all because of a comment that is buried beneath an article that is piling up with hundreds of comments.

Get in touch with the Korean Times reporter who took statements from Mercedes and the Korean business analyst, and have them do a nice thorough interview with Ammon, one of the world's most respected Internet marketers. Everything Ammon said in that comment--say it to the Korean Times.

Bam.

About time we give NCSoft another black eye, anyhow; I think they're starting to get a little too cocky over there. We need them to sell the game and IP; but that's never going to happen if they make an uncontested habit out of throwing Paragon Studios and City of Heroes under the bus for the "strategic" blunder they made.

That was my thought. If those statements become known, we have contact. Boom. :)

BIG boom. :)

[Lily Barclay]

NCSoft will not squirm at all because of a comment that is buried beneath an article that is piling up with hundreds of comments.

Get in touch with the Korean Times reporter who took statements from Mercedes and the Korean business analyst, and have them do a nice thorough interview with Ammon, one of the world's most respected Internet marketing specialists. Everything Ammon said in that comment--say it to the Korean Times.

Bam.

About time we give NCSoft another black eye, anyhow; I think they're starting to get a little too cocky over there. We need them to sell the game and IP; but that's never going to happen if they make an uncontested habit out of throwing Paragon Studios and City of Heroes under the bus for the "strategic" blunder they made.

Rae forwarded the article on to the Korea Times guy. Hopefully he reads the comments, or has his own analysts undoubtedly come to the same conclusion.

[Captain Electric]

That is great to hear, Lily.

There's another component here as well.

Paragon Studios isn't just a studio name. Those guys and gals were and are our friends. I don't have to tell anyone this. They played the game alongside us. They were fans too. For many of us, we considered our devs to be on the same team: our team. They were devastated right alongside us. The commitment and sweat they put into the game for all those years mixed with our commitment and sweat--and in the end, so did the tears.

These are our friends. And because of NDA agreements and career survival, their hands are simply tied. They can't defend themselves, they can't defend all their years of hard work, they can't do anything about the lies coming out of NCSoft. NCSoft is just smearing mud all over our friends faces, spitting on their hard work, their reputations, their dignity and honesty.

Another PR black eye is the only appropriate response. Anything less is tantamount to standing by and watching.

[Atlantea]

That was my thought. If those statements become known, we have contact. Boom. :)

BIG boom. :)

Big BADA Boom! :)

[Atlantea]

These are our friends. And because of NDA agreements and career survival, their hands are simply tied. They can't defend themselves, they can't defend all their years of hard work, they can't do anything about the lies coming out of NCSoft. NCSoft is just smearing mud all over our friends faces, spitting on their hard work, their reputations, their dignity and honesty.

Another PR black eye is the only appropriate response. Anything less is tantamount to standing by and watching.

Damn STRAIGHT!