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Funcom: Bankruptcy or buy out: (but when?)

124

Comments

  • gaeanprayergaeanprayer Member UncommonPosts: 2,341
    Originally posted by thark

    I really do not see the point in this..

    We are gamers, TSW is a great game..If a game is as good as this is it will eventually pick up some steam.

    It's a new and not based opon a huge IP, combine that with less adverising..

    TSW will grow upon it's own merits in time.

    You don't see the point in the possibility that the company behind a game you enjoy may be heading toward bankruptcy?

     

    Funcom's own admissions in their reports made me wary of their financial situation. There's a lot of companies that are struggling or all out failing at this point, it has me worried. Yeah, it would be nice of companies took their blows, learned, and came back with better products, but that doesn't happen if they just go belly-up instead. And all things considered, TSW isn't really a bad product, it's just rough around the edges. I'd still take it over WoW/Rift.

    "Forums aren't for intelligent discussion; they're for blow-hards with unwavering opinions."

  • GorillaGorilla Member UncommonPosts: 2,235
    Originally posted by bcbully
    Originally posted by Nephaerius
    Originally posted by z4oslo

    User critics proves you wrong. TSW is not a bad game.

    But i guess you cant fight haters. Its popular to hate funcom, as its popular to hate EA.

    Of course, if you ask someone why they hate funcom or EA, most people cant come up with a good answer.

    I hate EA! Why do you hate EA? Because .. because ... they are LAME .. i think. Yeah they are lame. Also because i friend hate EA, and i trust my friend!

     

     

    TL;DR - You can't prove a game is either good or bad.  All games are both.  Some games are even both to the same person.  It's personal taste.  Just because you like the game and it has good user reviews doesn't make it a "good" game for everyone.

    Think this goes without saying. A lot of people think it's the best game since 2004, some people hate it. 

     

    I was looking forward to playing the game through sometime in the future. Like Neohaerius I'm not so sure after this trial. Ididn't enjoy playing through Kingsmouth a second time but for some reason the feeling persisted into the savage coast. I really like the setting (though with zombies and demons everywhere it is more   post apocalyptic  than horror/mystery).

    It would be a real shame if FC did fail. They do try to bring a different slant to their games.  AO was a masterpiece all be it a flawed one IMHO. There biggest problem seems to be delivery (which is why I don't hold much hope for monthly content).

    I hope they can attract some investment.

  • GorillaGorilla Member UncommonPosts: 2,235
    Originally posted by Razperil

    Why don't you do us all a favor and keep your "investing living" to yourself. People like you are why companies have those bad names. Your continued negativity in your wall of slander towards a certain company is absurd. Funcom might have or had their problems before, but they are doing a decent job now. (This is my opinion just like you had yours.)

    It's funny when people like you have your need to stir things up in your everyday life just because you get a kick out of it. In anycase, take the advice that I have given.. Oh yeah, try not to quit that day job. Clearly, you are so good at looking things up on the internet. :) Pun intended. :)

    Did you read his post properly? Apart from the rather short conclusion it is not his opinion but statements (which one must assume are facts) released by FC, It is detailed and informative. Yours however is simply is an 'ad hominem attack'. Why not comment on the points he made rather than attack him personally.  

  • GorillaGorilla Member UncommonPosts: 2,235
    Originally posted by gaeanprayer
    Originally posted by thark

    I really do not see the point in this..

    We are gamers, TSW is a great game..If a game is as good as this is it will eventually pick up some steam.

    It's a new and not based opon a huge IP, combine that with less adverising..

    TSW will grow upon it's own merits in time.

    You don't see the point in the possibility that the company behind a game you enjoy may be heading toward bankruptcy?

     

    Funcom's own admissions in their reports made me wary of their financial situation. There's a lot of companies that are struggling or all out failing at this point, it has me worried. Yeah, it would be nice of companies took their blows, learned, and came back with better products, but that doesn't happen if they just go belly-up instead. And all things considered, TSW isn't really a bad product, it's just rough around the edges. I'd still take it over WoW/Rift.

    Quite. You know what the fans can do to support FC? Buy stock. Not only would it help the company but if they are 'turning things round' as some believe it would be a nice little earner.

  • kitaradkitarad Member LegendaryPosts: 7,910

    NOOOOOOOO !!!!

     

    I love TSW and am enjoying playing it. I have also preordered GW 2 these two were the game I was thinking of playing for the future hopefully a year or two.

  • dumbo11dumbo11 Member Posts: 134
    Originally posted by mCalvert
    Originally posted by eric_w66
    Originally posted by Rasputin
    Time has run out for theme parks.

    Too bad it ran out for sandbox in 1998.

    Tell that to EVE and Archeage.


    Eve was released in 2003, if we assume Archeage releases in 2013, then that's a 10 year gap between "big" sandbox MMOs... not exactly a genre in the pinnacle of health.

    But technology changes, minecraft/terraria et al. have had an effect on the world, it's possible that some games will attempt to be 'more sandboxy'.

    Regardless, "theme parks" are here to stay... but it is true that they are looking to be 'less themepark-ish'.

    - Rift/GW2 with the 'themepark changes itself', 'there are no queues', 'the park is the ride'.  Interesting ideas, although the jury is out on whether these games can meet the social requirements of an MMO.

    - Cryptic and the whole 'user generated missions' is a form of sandbox, in some ways a very powerful sandbox, in others a meta-sandbox... but still a very interesting movement within the genre.

     

    For TSW specifically, the Cryptic route is fascinating... giving users the ability to write missions for TSW could be a 'game changer' - it's a genre where people would love this opportunity.  (yes, there would probably be endless Twilight/Buffy/X-files fan fiction, but there would also be some good stuff - and it would add an 'edge' that the game currently lacks).  Whether it's technically possible is a different matter.

  • KenFisherKenFisher Member UncommonPosts: 5,035
    With three games running, I would think they should have no problem with income.  Sounds to me like they need a good business manager to identify the faults and resolve them before a crisis approaches.

    Ken Fisher - Semi retired old fart Network Administrator, now working in Network Security.  I don't Forum PVP.  If you feel I've attacked you, it was probably by accident.  When I don't understand, I ask.  Such is not intended as criticism.
  • RasputinRasputin Member UncommonPosts: 602
    Originally posted by jdnyc
    Originally posted by Rasputin
    Time has run out for theme parks.

    GW2 is theme park.  If anything, the traditional business model looks like it will change.

    Theme Park?  It's far from dead.

    GW will stand its test now, then we will see..

  • lotapartylotaparty Member Posts: 514
    Originally posted by gamesrfun

    Funcom is reeling from the disaster of "The Secret World".   I do a bit of investing for a living, so I hoped to highlight some of the less obvious warning signs from the investor relations section of their website.  Here are some  of the more interesting tidbits I found:

    (Rules:  Unless the company says something happened, it did not.  Extrapolations are based not on guesses but on what is represented by the company (aka what can get a member of the BoD sued).  That is the standard I'm using for this.  Logical deductions may be made.)

    Desperate for money due to burning through cash:

    1)  Issued 60 NOK (10 million US dollars) of stock June 20, 2012;

    2)  Converted over half of their convertible bonds into cash at a company choking interest rate of 10% (8.7 million US dollars)

    3)  Despite this conversion, at the end of the quarter they still only had 12.2 million in cash left.  (In other words, that is why they issued more shares in June, because even after the conversion of the bonds for 8.7 million they only had 12.2 million left over.  Remember this is the company that had cash reserves of like 50 million post-Conan launch)

    4)  Funcom is burning through about 7 million dollars in cash per quarter as by all metrics losses are accumulating.  By Q3 2012, no matter what type of spin Funcom puts on it, I will be able to hazard a guess as to when the company will go bankrupt.  They have another 6.3 million in convertibles available, but unless the stock price improves they cannot "issue" their way out of this.  Given no new sources of income, it is highly unlikely that anyone save for a purchaser will lend them more money.  

    Conclusion:  as of the end of Q1/2012, Funcom had realistically 28.5 million dollars in cash available outside earned revenue.  Beyond that, The Secret World and other properties must fund the company.  There is no other way.

    Absolutely no other real sources for revenue:

    1)  2.2 million US in Quarter 1, 2012:  That is across all games including F2P offerings. 

    2)  Their F2P intiatives are earning less than 500,000 a quarter.  About a 30% reduction in revenue from the previous year.  I don't think Fashion Week Live is going to save the day. 

     

    Things I did not hold against the company:

    1)  22 million in interest bearing debt.  I don't care about the amount: I care about the rate.  Other than the convertible bonds, their other offerings were around 5-6%.  Not very significant.

    2)  Additional costs surrounding the launch of TSW:  This is obvious.  What I will be looking for is:

    a)  Total sales

    b)  Margin on sales (they had better provide the digital margins, but I doubt they will, because the insane margins digital downloads provide will cover up some other nasty financial blows)

    c)  Impairment charges:  I could care less what Funcom thinks TSW is worth.  They reduced the IP value of AoC 95% since its launch.  I expect similar things from TSW.

    THEIR RECENT PRESS RELEASE:

    This has received by far the most press.  Here are my thoughts:

    The key facts and numbers were:  1.050 million client sales first year, 280,000 average subscribers, ingame store bringing in 35% of subscription revenue.

    1)  When any company says that it is not likely that either scenario will be met, you can safely take that at their word.

    2)  When a company further says that a "possible" scenario is that sales will be less than half of what occurred with AoC, you can easily and safely infer that they are hoping for sales closer to 1/2 than 1/3.  If the company is really badly off, that could be used to justify being closer to 1/2 than 1/4.  So what is optimism here?  350,000 to 500,000 in sales.  I cannot tell which yet.

    3)  "It should be noted that the sales amount in the "Conan-like" scenario is significantly higher than for the game "Age of Conan", due to the assumption of better retention implemented in the scenario."

    This is the most COMPLICATED statement they provided.  Age of Conan sold 1.05 million copies.  So when they talk sales, are they really talking revenue?  They have never mixed those terms interchangeably.  If this is a particularly misleading way of also discussing subscription numbers, well, shame on them. 

    4)  "First indication of churn is more positive than for Age of Conan"  Funcom is ambigious as to whether this churn relates to their "conan-like scenario" or whether or not they are tracking churn compared to Age of Conan directly.  Age of Conan had probably the most precipitious churn of any MMO in the history of gaming in May-July 2008.  If the churn is only better than that, it is not going WELL AT ALL. 

    5)  "The in-game store is performing as expected":  This simply means that in-game store is pulling in about 35% of subscription revenue.  Doesn't mean a lot unless you have a healthy subscriber base.

     

    OVERALL CONCLUSION:

    If they are on pace based on previous models (AoC sold 80-90% of its units within the first 3 months) then as of right now they have sold 80% of 350,000 - 500,000 (so 280,000 to 400,000) with an average subscriber base of (over 1 year) of something in between their healthy retention rate scenario of 37.5% and their poor retention rate of 25%. 

    Needless to say, 30% of 350k, or 500k (whichever it may be projected to be), is not good.   More to come in a few weeks.

     

     

     

    from what i have heard they get a grant of money from norwegian government each year .so i dont see why they will be getting bankrupt anytime soon?

  • PhryPhry Member LegendaryPosts: 11,004
    Originally posted by Gorilla
    Originally posted by Razperil

    Why don't you do us all a favor and keep your "investing living" to yourself. People like you are why companies have those bad names. Your continued negativity in your wall of slander towards a certain company is absurd. Funcom might have or had their problems before, but they are doing a decent job now. (This is my opinion just like you had yours.)

    It's funny when people like you have your need to stir things up in your everyday life just because you get a kick out of it. In anycase, take the advice that I have given.. Oh yeah, try not to quit that day job. Clearly, you are so good at looking things up on the internet. :) Pun intended. :)

    Did you read his post properly? Apart from the rather short conclusion it is not his opinion but statements (which one must assume are facts) released by FC, It is detailed and informative. Yours however is simply is an 'ad hominem attack'. Why not comment on the points he made rather than attack him personally.  

    never safe to assume, and the whole thing could be competely innacurate, without hard data backing it up, there are far too many assumptions made to really take it seriously, its really just another opinion, nothing more. even the OP's title of the thread is misleading, because it infers that either of those situations is valid, when there is no evidence to suggest either one is even a consideration.  image

  • fallenlordsfallenlords Member UncommonPosts: 683
    Two managing directors have jumped ship, top boys don't go if everything is peachy.   Unlike the olds days where the captain goes down with the sinking ship.  These days they are first in lifeboat and half way to some tax haven before anybody knows what has happened.
  • SankiriSankiri Member UncommonPosts: 11
    Originally posted by fallenlords
    Two managing directors have jumped ship, top boys don't go if everything is peachy.   Unlike the olds days where the captain goes down with the sinking ship.  These days they are first in lifeboat and half way to some tax haven before anybody knows what has happened.

    CEO at the time, Trond Arne Aas, not only left the company when the game launched, but he was rude enough to sell one third of his shares in the company as soon as he had left the position. He did not even have to notify the stock exchange on the sale, since he was no longer a primary insider (according to Funcom). This is bullshit, considering he had all data from preorder sale.  That Funcom accepted this sale, is beyond my comprehension.

     

  • TatercakeTatercake Member UncommonPosts: 286

    we had a lot of fun times in aoc but when funcom told me i had to reroll my charicter that i built for 3 years  they sead no you dont get any of those skills  now we decided on it  just reroll and start over i was whaa how about i just quit then and they were go ahead please we do not need you !!! what a mistake  they made there half the server quit when i did

    Leotis was a lot of fun to play had some great times and good pvp

  • fallenlordsfallenlords Member UncommonPosts: 683
    There has been speculation today that Funcom are laying off half of their worldwide staff.  In what they call a 'cost-adjustment initiative'.   Though Funcom will not confirm the extent of the cutbacks.
  • Crazy_StickCrazy_Stick Member Posts: 1,059
    Originally posted by fallenlords
    There has been speculation today that Funcom are laying off half of their worldwide staff.  In what they call a 'cost-adjustment initiative'.   Though Funcom will not confirm the extent of the cutbacks.

     

    If true, that’s both desperate and insane. The prospects for recovery are not good at that point. It actually hurts me in that I don’t want to see another game company fail even though they dug their own hole.

  • ThorqemadaThorqemada Member UncommonPosts: 1,282


    Originally posted by dumbo11
    Originally posted by mCalvert Originally posted by eric_w66 Originally posted by Rasputin Time has run out for theme parks.
    Too bad it ran out for sandbox in 1998.
    Tell that to EVE and Archeage.
    Eve was released in 2003, if we assume Archeage releases in 2013, then that's a 10 year gap between "big" sandbox MMOs... not exactly a genre in the pinnacle of health.

    Dont forget Second Life that makes ~75 million dollars a year and also for example:
    Entropia Universe
    EvE
    Ultima
    These games never got hurt from WoW and make Cash since many years while Themeparks burn through development money and barely recoup it.

    The one and only thing making Themeparks looking so much better is:
    WoW

    "Torquemada... do not implore him for compassion. Torquemada... do not beg him for forgiveness. Torquemada... do not ask him for mercy. Let's face it, you can't Torquemada anything!"

    MWO Music Video - What does the Mech say: http://www.youtube.com/watch?v=FF6HYNqCDLI
    Johnny Cash - The Man Comes Around: https://www.youtube.com/watch?v=Y0x2iwK0BKM

  • KeyloggerKeylogger Member Posts: 250
    Originally posted by Tayah
    I think their biggest problem with TSW was getting people to even try it out after what happened with Age of Conan. After you get a bad rep it sticks.

     

     

    Yes.

     

    Kind of like what Blizzavision has done with their Warcraft, SC and Diablo IPs.

     

    They'll never move another title again on good name alone.

     

    I liked Anarchy Online, though it was a very niche game and had some huge issues that were never resolved.

    (Shadowlands was total camel shit though.)

  • pkmaster655pkmaster655 Member UncommonPosts: 8

    Funcom layoffs confirmed as temporary

    http://massively.joystiq.com/2012/08/21/funcom-layoffs-confirmed/

    Enojyed, "Unconfirmed reports put the layoffs at 50% to 60% of the studio's workforce"

  • fallenlordsfallenlords Member UncommonPosts: 683
    Now more than ever you need to read between the lines.  I think temporary in this instance means until the company is back making a profit, so you might as well say the layoffs are permanent.   Whatever is happening isn't finished, they say they are in the process of implementing multiple cost cutting initiatives.  Whichever way you look at it that is going to impact the customer in some sense and TSW.  I mean you can't cull a rumored 50-60% of your workforce and still hope to operate at the same level you did before.
  • KeyloggerKeylogger Member Posts: 250

    They actually cut 60% of the TSW team?

     

    Goddammit, I was having fun and intended to buy it next week.

     

    No point if it's going to go P2W Itam Mall shitfest with a 3m staff releases new dresses every 8 months as content updates.

     

  • Destiny2010Destiny2010 Member UncommonPosts: 327
    Originally posted by Cinatrot

    They actually cut 60% of the TSW team?

     

    Goddammit, I was having fun and intended to buy it next week.

     

    No point if it's going to go P2W Itam Mall shitfest with a 3m staff releases new dresses every 8 months as content updates.

     

    Exact numbers are not sure, and its of total workforce in FC, not TSW devs. They still are committed to update the game long term, so we will see what happens further on.

  • erinyserinys Member UncommonPosts: 395
    i am actuallty very happy with the game.. i think its too bad this is happening..
  • GorillaGorilla Member UncommonPosts: 2,235
    Originally posted by fallenlords
    There has been speculation today that Funcom are laying off half of their worldwide staff.  In what they call a 'cost-adjustment initiative'.   Though Funcom will not confirm the extent of the cutbacks.

    Only temporarily thoughimage

  • AstropuyoAstropuyo Member RarePosts: 2,178

    While I respect a fellow investor, you are missing the minder on this.

     

    Game companies have always operated differently, it' s usually after Q2-3 that anything is shown, this isn't a popular IP to ride the coat tails on.

     

    Funcom true has been in trouble, but who isn't? I can hardly find a company that has had any earnings.

    I would not say this is doom, so much as the company will make simple cuts like they have been doing *Aside from the recent dev cuts, which are typical of after release.

     

     

    Just saying, give them time, they've not posted their numbers yet.

     

     

    Edit: Forgot my point, Companies are really hard to kill. That's how they are built. There are redundancies in place for things such as this, this is why they tend to hire more during a startup/dev cycle. It just looks terrible to us common folk because we're not insiders, atleast I am not.

  • fallenlordsfallenlords Member UncommonPosts: 683
    Originally posted by Astropuyo

    Edit: Forgot my point, Companies are really hard to kill. That's how they are built. There are redundancies in place for things such as this, this is why they tend to hire more during a startup/dev cycle. It just looks terrible to us common folk because we're not insiders, atleast I am not.

    Companies are easy to fold and easy to create.   The main point of how they are setup is to protect the assets of the people in charge, so they keep their liability to a minimum. 

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