NCsoft Q4 report.

[Perfidus]

In a recent interview with Massively, Dan Stahl said: "Cryptic is focused on Star Trek Online and Neverwinter." Translation: We're pretty much ignoring everything else (Champions).

Yeah, but that's obvious. I really don't expect Champions to ever leave life support until they pull the plug, which could even be shortly after Neverwinter, unless Neverwinter really gets a lot of sustainable players. It just doesn't have the player base to justify many resources, even with the influx of ex-CoH people. As far as active players I'm pretty sure Champions' one server amounts to only the amount of people on Virtue alone, before the announcement. Maybe Virtue and a few of the lesser servers. But Virtue and Freedom almost certainly crushed Champions' numbers.

I say this all not as fact, however, but as opinions based on things I've seen and read.

[Segev]

That's kind of sad to hear, actually. Poor CO.

[Perfidus]

Champions had a chance at being something great. Atari made sure that never happened, and Perfect World never bothered to take steps to correct it once they took over.

[Peregrine Falcon]

Peregrine, you are confusing sales with profit.

No I am not. I'm well aware of the difference between sales and profit.

No.

They sold over 1 million boxes and they've repeatedly said that they're doing very well financially. MMOs, like most other products, are judged by how much revenue they generate. GW2 is generating a TON of money.

Look, I get that we all hate NCSoft around here. But calling GW2 a 'failure' is simply a lie.

If you want to say "I'll never try Guild Wars 2" or "I don't like it" then fine. But Guild Wars 2 is a financial success whose player base is actually increasing, it just won a ton of awards from a dozen or so websites, and no matter how much you hate NCSoft calling GW2 a failure is a lie.

[Kosmos]

Finally, NCSoft is making a ton of money. No matter what their stock price is, they're not in any financial danger whatsoever. Anyone who thinks so has no understanding of business.

To try to illustrate this point further to those who think NCsoft is in trouble...

Looking at NCsoft's 4Q report they (the consolidated companies that is) had 512,778 million Korean Won in reasonably liquid assets (cash, equivalents, financial instruments and accounts receivable) and their expenses for 2012 were 650,082 million Won (even including taxes). At that rate of expense they could literally give all their products and services away for 9 months, without cutting any costs at all, and only then would they have to start worrying about making payroll or keeping the lights on.

I'm sorry to have to say it, but getting CoH out of their hands at a fire sale just isn't going to happen.

[RuneSage]

[FatherXmas]

No I am not. I'm well aware of the difference between sales and profit.

First of all, at 45% of NCSoft's profits can people please stop saying that Guild Wars 2 is dying or that it's a failure? GW2 has already made a TON of money and it looks like their player base is actually rising instead of dropping.

Since NCsoft has NEVER EVER listed profits per game so where do you get your "45% of NCSoft's profits can people please stop saying that Guild Wars 2 is dying" information from.  All that the 4Q numbers list is 45% of game sales for GW2.  Hence my comment.

[FatherXmas]

[Perfidus]

I really do appreciate your fact-based posts FatherXmas but man is it a bummer to read them sometimes.

[Peregrine Falcon]

Since NCsoft has NEVER EVER listed profits per game so where do you get your "45% of NCSoft's profits can people please stop saying that Guild Wars 2 is dying" information from.  All that the 4Q numbers list is 45% of game sales for GW2.  Hence my comment.

Oh ok, I see what the problem is now. That was just a case of imprecise wording on my part. Sorry about that. Completely my fault.

The article that I read was very specific in that they said that GW2 accounted for 45% of NCSoft's Q4 Total Sales.

[MindBlender]

I put little faith in the stock market.  The "old days" of goods and services being the true measure of the health of an economy are gone.  If you had a hardware store and you needed money to expand or keep going at your current level, you borrowed from a bank.  That was FINANCIAL.  You sold more goods and services and paid back the loan at some interest.  Banks kept rolling on and so did your business.

THEN...financal changed to what people thought your company was worth (if you were public) and that prediction aspect of our economy is what causes the markets to blow like a cape in the wind.  So much of our economic health as a country and even world wide is based on fear and prediction.  Why is Greece causing our market to fluctuate so much?  Do we rely on Greece that much?  The economy is damned by the people that worry that it is damned.

Yes, I know that other parts of the world buy our goods and services and if they do not have the money to pay for them, we lose out.  I also know that unemployment causes fewer people to have access to income to purchase goods and services.  There are real problems around the world, this we know.  On the other hand we also know that the numbers of the stock market are not based on true fact as much as analyst and investors fears and predictions.

Not an economist, so feel free to correct my rant, but with all that is being discussed in this thread, I wanted to post my thoughts on just why NC Soft stock prices mean little to me.  I want the company to fold under the weight of their own arrogance.

[FatherXmas]

Well back in the "old days", value was the play.  If a company made steady earnings, keeping up with inflation, sending some of those earnings back to investors in the form of dividends, a stock was relatively stable.

Then came the pharmaceutical and high technology booms around 40 years ago (God it's been that long?  Apple turns 37 this year).  Growth then became the hot thing to invest in.  It wasn't good enough to have a "reasonable" profit, it needed to grow every year.  That meant either your sales had to increase either by attracting new customers or raising prices or lowering costs, or a combination of both.  Problem is at some point your market reaches saturation and it devolves into stealing customers from your competitors while not losing any of yours.  As for costs technology can and did improve productivity which was a way of keeping costs under control but once that was tapped to it's limits someone realized it was cheaper to ship your parts to poorer countries where cheap (relative to the US) labor could assemble and then ship back the final product.  Problem with that is now fewer people can afford your product since all the well paying (relative to retail or food service) manufacturing jobs have been shipped off shore.

As for Greece the problem with them (and Spain) goes back to the formation of the EU and when most of its members (the Eurozone) switched to the Euro.  Before that countries with poor economies didn't really impact on other countries in Europe because the exchange rate between currencies could be adjusted as the economies of each country fluctuated.  That changed in 1999 when all the exchange rates between each country became fixed from that point on.  Now when the economy of Greece falters due to it's crushing debt it doesn't just affect themselves but all the member states in the EU.  Since the EU is a major trading partner with the US, even if the US doesn't have a significant amount of trade with Greece, Greece's actions affect the EU which then affects US.

[Twisted Toon]

Growth then became the hot thing to invest in.  It wasn't good enough to have a "reasonable" profit, it needed to grow every year.

And 20 years ago I thought that was a stupid concept to run a business by. Not that I'm a business person, then or now.

I'm just saying that I would be happy with a reasonable profit, not necessarily a percentage of profit growth every year. As long as I make more than what I spend, I'm good.

Of course, that's basic economic good sense. Something the world seems to have lost...

[FatherXmas]

And 20 years ago I thought that was a stupid concept to run a business by. Not that I'm a business person, then or now.

I'm just saying that I would be happy with a reasonable profit, not necessarily a percentage of profit growth every year. As long as I make more than what I spend, I'm good.

Of course, that's basic economic good sense. Something the world seems to have lost...

This problem happened because new rapidly growing industries couldn't be evaluated the same way as large old businesses.  It was better for them to constantly reinvest profits back into the company to keep growing instead of giving some of that back to the investors.  So analysts started using earnings growth to judge what a fair price would be for a "new" company in a new market.  Eventually someone decided it would be better to rate all companies on that criteria.

Going back to Apple for example, they didn't have dividends until Jobs passed because he always believed it was better to keep investing it back into the company.  Plus IIRC he believed dividends were part of what old stodgy companies operated (ie IBM).  However when a company as $10 billion in cash on hand at the end of their 2012 fiscal year (and earning another $5 billion in cash in their first quarter 2013, which is after the $2.5 billion they paid in dividends), enough is enough.

[Kosmos]

This problem happened because new rapidly growing industries couldn't be evaluated the same way as large old businesses.  It was better for them to constantly reinvest profits back into the company to keep growing instead of giving some of that back to the investors.  So analysts started using earnings growth to judge what a fair price would be for a "new" company in a new market.  Eventually someone decided it would be better to rate all companies on that criteria.

It's not really a problem. It's simply a recognition by investors and analysts of a new reality brought about by a technical revolution. I personally don't hanker for a return to valuing dividends over stock splits, as that will indicate that the period of vast opportunity provided by the onset of the Information Age has come to a close. What happens then is that the upstart companies don't attract investors due to limited return potential and the industry leaders remain unchallenged. This allows them to produce something like Windows 8 or Blade & Soul every year or two and still make a reliable profit due to investor timidity limiting competition. Thanks, I'll take revolutionary economic times over that, even with all the stock chaos and nutty Daewoo analysis that comes with it.

[Knight Light]

at 45% of NCSoft's profits can people please stop saying that Guild Wars 2 is dying or that it's a failure?

No.

They sold over 1 million boxes and they've repeatedly said that they're doing very well financially. MMOs, like most other products, are judged by how much revenue they generate. GW2 is generating a TON of money.

I stand by my "no".

People have been spending perfectly good money on worthless utter crap for a long time, I had no expectations of that stopping any time soon. Last week someone got into the Guinness Book of World Records for most money ever spent on a dog wedding. People throw away money, it's what they do. You're not gonna convince me Guild Wars 2 is not a failure just cause it's selling; for the RIDICULOUS amounts of money they pumped into its development the damn thing better be selling. The sheer amount of money NCSoft rammed into that glitchy mess was a very likely factor leading into the decision to close City of Heroes, so f GW2 for that. Furthermore, even though NCSoft bought all the licensing they needed for CoH2 in 2009, when the time came they showed Paragon Studios zero support for that project in favour of developing Guild Wars 2, so f them for that too.

However, let's put aside the fact that I hate NCSoft so much that at this point physical proximity to me causes some things to burst into flames.

My main reason for believing Guild Wars 2 is a failure is entirely anecdotal but the phenomenon is still there. Its gameplay does not seem to lend itself to any real longevity. I'm sure there's people who, when City of Heroes was released, burnt through the content in two months and took a break however I'm fairly certain the great majority of that crowd eventually came back. It was a "too much of a good thing" burnout.

Guild Wars 2 may not be hurting for players but the frequency at which I'm encountering people who have genuinely given GW2 a chance and by their second character just don't care any more is alarming. In one particular instance, when they first made the announcement, a girl I know told me that CoH was dead, Guild Wars 2 was the future; get with the program. GW2 had everything and there was nothing I could do to save CoH. Six weeks later, there she was on the steps of Atlas City Hall, emoting holdtorch and attempting to save the game she wasn't abysmally bored with.
September to October was all it took for her to realise GW2 doesn't really have "it" and no amount of new content will change that.

I believe these figures should not be taken as an achievement of success but as an indication that Guild Wars 2 simply hasn't failed enough yet. That's okay, all it really needs is time.

But hey, if you like it, it shouldn't matter that I think it's an utterly worthless piece of garbage that should never have been allowed to exist.

Have a nice day.

[FatherXmas]

Well you are going to love the projected next quarter sales for GW2 because it's projected to be 1/6th of 4th quarter because box sales will have plummeted and the sales stream will mostly be the item store.  The thing is with the item store, I don't really see anything that I what to buy beyond another character slot.  There are unique little items like roses for V-day (which isn't given to another player but is used as a weapon) or a cute backpack for your character.  Or bunny ears.  Plus you can buy gems, the store currency, with in game gold.  However new cute items in the store tend to give rise to an ever less favorable gold to gem exchange rate.

[dwturducken]

I just don't get bunny ears. In CoH, they were fun for silly, themed characters, but, by silly, I mean super-powered gentleman's club waitress. That little short whateveritis with the bunny ears is just a little bit disturbing...

[Kosmos]

[...] like roses for V-day (which isn't given to another player but is used as a weapon) [...]

That seems strangely appropriate for B&S. Do the roses have tiny heads and elongated stems?

[srmalloy]

I just don't get bunny ears. In CoH, they were fun for silly, themed characters, but, by silly, I mean super-powered gentleman's club waitress. That little short whateveritis with the bunny ears is just a little bit disturbing...

There are a pair of videos that were created for a Japanese convention, 'Daicon', specifically for Daicon III and Daicon IV, by a group of fan animators that later became the studio Gainax. You should be able to find both videos on YouTube (because of site blocking at work, I'm unable to locate them at the moment). Watch the Daicon III video as an intro to the Daicon IV video (and see how many of the things in both you can identify -- like the USS Enterprize, the various monsters from the Godzilla movies, the powered armor from 'Uchū no Senshi', the Japanese OVA of Heinlein's novel 'Starship Troopers', etc.) The second one is more appropriate to your comment about 'super-powered gentleman's club waitress'...

There's also a huge pun built into the videos -- 'Dai' means 'big', so 'Daicon' is 'Big con' (as in 'convention'), and 'daikon' is a large Japanese radish.