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Guild Wars 2: NCSoft Reports Healthy Earnings

13

Comments

  • saurus123saurus123 nonePosts: 570Member Uncommon
    Originally posted by dimnikar

    Unless GW2 box sales keep up the pace OR cash shop sales go up even further, they might not get a return on their investement.

     

    I'm guessing their exceedingly high expenses were due to producing / marketing GW2. They might not be.

    you forgot about one thing

    when they release expansion

    even if half the ppl buy it they make insane profit

    you cant look at expenses/profit in few months timeline

  • Loke666Loke666 MalmöPosts: 17,975Member Uncommon
    Originally posted by dimnikar

    Unless GW2 box sales keep up the pace OR cash shop sales go up even further, they might not get a return on their investement.

    I'm guessing their exceedingly high expenses were due to producing / marketing GW2. They might not be.

    I wouldnt worry too much about that. Just boxsales of GW2 should cover most of the expenses (it sold somewhere around 2,5 million copies which should be raking in about what the game cost to make but ANET will take a piece of the cake as well), some itemshop stuff and the first expansion will easily take the last of the development cost and get in some earnings too.

    But getting your money back (do anyone actually doubt that) and earning a huge sum of money are 2 different things. And NC softs AION is doing pretty badly nowadays, Blade & soul also did a lot worse than expected and NC soft is working on a new Lineage game and probably something more.

    Just living on their share of GW2 and old Lineage wont work long term for them so I am not surprised they are in the red, making MMOs is expensive as you said and larger companies cant afford to fail several MMOs.

  • Gaia_HunterGaia_Hunter BristolPosts: 2,816Member Uncommon
    Originally posted by Rthuth434
    Originally posted by Xiaoki

     


    Originally posted by Gaia_Hunter

    Originally posted by bcbully http://global.ncsoft.com/global/ir/earnings.aspx   Read for yourself. As expected a nice portion of box sales were held over from the 3rd qt. Even with that it looks like they lost quite a bit. Stock went down another 5% today too.
    $150M would be around 5 million boxes ($30 per box).

     

    There is heavy gem money in there too


    Im guessing you missed that ArenaNet themselves announced that GW2 has sold 3 million boxes as of January.

     


    I mean, really, where did you get 5 million boxes sold at $30?

     he is clearly saying that the money  made includes microtransactions. 

    Exactly..

    Since we know they "only" sold 3 millions the other "1-2 million boxes" has to be gems sales.

    Currently playing: GW2
    Going cardboard starter kit: Ticket to ride, Pandemic, Carcassonne, Dominion, 7 Wonders

  • daltaniousdaltanious waPosts: 2,144Member Uncommon
    Very glad to hear it, GW2 will only benefit. :-)
  • fivorothfivoroth LondonPosts: 3,664Member Uncommon

    So that was a typo after all and NCSoft are not in the red but they are in the black.

    Anyways good to know. I only play GW2 and have never played any NCSoft games as to me they represent the epitome of boring asian grinding games.

    Mission in life: Vanquish all MMORPG.com trolls - especially TESO, WOW and GW2 trolls.

  • ZagaZaga Sao PauloPosts: 23Member

    They have a cost increase of about 130 M worldwide, of which 70 M was in the parent company. I assume this means Korea, although all of the marketing expense seems to be allocated there as well (?).

    Also, 45 M of those 70 M is labor cost alone. Development of a new game in-house or some freaky overhead increase? They do talk about "more investment in R&D".

  • dimnikardimnikar ZanistanvillePosts: 271Member
    Originally posted by Gaia_Hunter
    Originally posted by Rthuth434
    Originally posted by Xiaoki

     


    Originally posted by Gaia_Hunter

    Originally posted by bcbully http://global.ncsoft.com/global/ir/earnings.aspx   Read for yourself. As expected a nice portion of box sales were held over from the 3rd qt. Even with that it looks like they lost quite a bit. Stock went down another 5% today too.
    $150M would be around 5 million boxes ($30 per box).

     

    There is heavy gem money in there too


    Im guessing you missed that ArenaNet themselves announced that GW2 has sold 3 million boxes as of January.

     


    I mean, really, where did you get 5 million boxes sold at $30?

     he is clearly saying that the money  made includes microtransactions. 

    Exactly..

    Since we know they "only" sold 3 millions the other "1-2 million boxes" has to be gems sales.

    Except GW2 was never sold at $30, It's always been at $59 with some minor sales at around $45-50. So assuming $50 (and it was more than that), it comes to exactly 3 million boxes sold, as ArenaNet themselves reported.

     

    What this means is 0 revenue from cash shop, which is weird and means there's some hardcore misinformation coming out of Anet (less likely than NCsoft, which is legally required to post correct information in their quarterlys).

     

    This is assuming all profits go directly to NCsoft (and is maybe later redistributed), because we have no idea what thier cut is so everything written above is pure speculation and means N O T H I N G.

  • bobfishbobfish SouthamptonPosts: 1,688Member
    Originally posted by dimnikar
    Originally posted by Gaia_Hunter
    Originally posted by Rthuth434
    Originally posted by Xiaoki

     


    Originally posted by Gaia_Hunter

    Originally posted by bcbully http://global.ncsoft.com/global/ir/earnings.aspx   Read for yourself. As expected a nice portion of box sales were held over from the 3rd qt. Even with that it looks like they lost quite a bit. Stock went down another 5% today too.
    $150M would be around 5 million boxes ($30 per box).

     

    There is heavy gem money in there too


    Im guessing you missed that ArenaNet themselves announced that GW2 has sold 3 million boxes as of January.

     


    I mean, really, where did you get 5 million boxes sold at $30?

     he is clearly saying that the money  made includes microtransactions. 

    Exactly..

    Since we know they "only" sold 3 millions the other "1-2 million boxes" has to be gems sales.

    Except GW2 was never sold at $30, It's always been at $59 with some minor sales at around $45-50. So assuming $50 (and it was more than that), it comes to exactly 3 million boxes sold, as ArenaNet themselves reported.

     

    What this means is 0 revenue from cash shop, which is weird and means there's some hardcore misinformation coming out of Anet (less likely than NCsoft, which is legally required to post correct information in their quarterlys).

     

    This is assuming all profits go directly to NCsoft (and is maybe later redistributed), because we have no idea what thier cut is so everything written above is pure speculation and means N O T H I N G.

    $60 boxed sale.

    Digital sales through their own site, ArenaNet / NCSoft would make at most $40 from a $60 sale, due to payment providers taking a 30% cut of the sale (industry standard figure).

    Retail sales through third parties, ArenaNet / NCSoft would make between $20 to $40 from the $60 sale, due to retailers and distributors taking between 30 to 60% cut of the sale (industry standard figures). This depends on whether NCSoft distributed themselves or another company was involved, I suspect that for some countries at least they would've needed a third party to help get the stock into warehouses / shops.

    I don't think the in-game shop is sustainable, nothing really useful in it to encourage sales there. I also don't think GW2 is profitable yet, though it can't be far off. I would expect them to turn a profit before the first expansion turns up and that first expansion to determine their development investment going forward. Either it is profitable as well, or it isn't and they decide to scale back a bit.

     

    Still, it is hard to judge how GW2 is performing or will perform going forward, but this is a known problem with the B2P model and the reason many companies don't even consider adopting it. No business likes to be unpredictable.

  • coretex666coretex666 PraguePosts: 1,934Member Uncommon

    Healthy earnings.

    As a Big Four auditor, I move a little further in the report to P&L, perform analytical review, find out that the net income decreased by 61%.

    You should take a look at COS as well. Sales on their own dont provide you with enough information to make a conclusion. Especially not the one that they are healthy.

    Luckily we are here to discuss games not finance, right.

    Waiting for L2 EU Classic

  • NadiaNadia Canonsburg, PAPosts: 11,866Member Common
    Originally posted by bobfish

    it is hard to judge how GW2 is performing or will perform going forward, but this is a known problem with the B2P model and the reason many companies don't even consider adopting it. No business likes to be unpredictable.

    in the short term,

    we know GW2 sold 1 million, 6 weeks after release (Oct to Dec) - that is decent

     

    offtopic,

    I was surprised the financials were reported this week, historically its mid Feb

    I was expecting Blizzards financials this week but who knows?

  • dimnikardimnikar ZanistanvillePosts: 271Member

    We also know it sold 3 million up to the new year, which means it didn't keep the momentum of 1 million per week.

     

    I'm pointing that out because you seem to think 6 week sales are indicative of long term sales. For some reason?

     

    Edit: Activision-Blizzard Q4 report is due tomorrow. Looking forward to how they did considering how badly the industry's been doing (videogames as a whole, not MMO only).

  • NadiaNadia Canonsburg, PAPosts: 11,866Member Common
    Originally posted by dimnikar

    I'm pointing that out because you seem to think 6 week sales are indicative of long term sales. For some reason?

    i never said anything about 1 million per week -- i said 1 millon for Q4

     

    known facts:

    GW2 has sold 3 million so far

    GW2 had 1 million presales

    GW2 sold 2 million for Q3

    GW2 sold 1 million for Q4 -- a decent amount considering its well beyond launch period

     

     

  • VesaviusVesavius BristolPosts: 7,643Member Uncommon
    Originally posted by Torvaldr
    Originally posted by Vesavius
    Originally posted by Asamof
    amazing how many people still play lineage 1

     

    Is L1 still sub? or a F2P conversion?

    As far as I know it's still a subscription based game.  If it's still the same model when I played here in the west, it truly is a sub game.  There was no box fee and no xpac / micro-transaction fees of any kind.  You sub bought you access to everything.  Stuff like server transfers and name changes == reroll.

    I used to miss the game a lot until I played Tera which feels a lot like Lineage in some ways - action/arcade, drops, farming mobs, etc.  Even the loot drop pickup animation is very reminiscent of Lineage.  It looks like there was more than just design ideas in that code.

     

    I like the idea of that as a revenue model... no box price, no cash shop, just a trial and then a sub if you want to play. I would love to see the industry go down this route more.

     

    I am finding TERA surprisingly fun right now, must say.

     
     
  • Gaia_HunterGaia_Hunter BristolPosts: 2,816Member Uncommon
    Originally posted by coretex666

    Healthy earnings.

    As a Big Four auditor, I move a little further in the report to P&L, perform analytical review, find out that the net income decreased by 61%.

    You should take a look at COS as well. Sales on their own dont provide you with enough information to make a conclusion. Especially not the one that they are healthy.

    Luckily we are here to discuss games not finance, right.

    Net income increased 31%. The 61% decrease wasthe parent company only.

    Their gross profit margin was 20% in 2012, with 20% in 3Q12 and 40% 4Q12.

    I guess you should have moved a little bit further.

    Currently playing: GW2
    Going cardboard starter kit: Ticket to ride, Pandemic, Carcassonne, Dominion, 7 Wonders

  • Brandis33Brandis33 Mason, OHPosts: 1Member
    I couldn't possibly imagine why Time's #1 game of 2012, IGN's best MMO, best PC game, and best PC graphics of 2012 possibly be doign financially well! IT'S UNFATHOMABLE!
  • mCalvertmCalvert Tallahassee, FLPosts: 1,283Member
    Keep in mind this report is based on earnings BEFORE Pirate101 was named Game of the Year. GW2 will no doubt be shut down now that everyone has abandoned it for Pirate101.
  • VolkonVolkon Sterling, VAPosts: 3,788Member
    Originally posted by mCalvert
    Keep in mind this report is based on earnings BEFORE Pirate101 was named Game of the Year. GW2 will no doubt be shut down now that everyone has abandoned it for Pirate101.

    I found the solution to that... I run around in Tyria yelling "Yarrrr!".

     

    Best of both worlds.

    Oderint, dum metuant.
    image

  • Gaia_HunterGaia_Hunter BristolPosts: 2,816Member Uncommon
    Originally posted by xArsonistx

    As someone who has 900 hours gameplay and has played on both NA and EU.

    3 million copies my ass.. That would mean you have people playing the game you don't. You might have 100k concurrent users and thats a big MAYBE.

    Diablo 3 sold 8-10 m copies? we all saw how that turned out.

    I dunno where or who this game sold 3 million copies too because the people are just not. People actualy believe what Anet says? a for profit company willing to do anything to make a buck? They have the biggest scapegoat in colin johnanson or w/e his name is...that guy will say or do anything with a smile.


    Maybe they did sell 3 m copies but 2.9 million uninstalled.

     

    "I've played this game for 900 hours, 2 level 80s, 50K WvW kills - this game is poo".

    You've been playing 6 hours per day in a game you don't like and is empty and killing other players as well.

    Ok.

     

    Currently playing: GW2
    Going cardboard starter kit: Ticket to ride, Pandemic, Carcassonne, Dominion, 7 Wonders

  • RoxtarrRoxtarr Freeland, MI, MIPosts: 1,122Member
    Originally posted by Gaia_Hunter
    Originally posted by xArsonistx

    As someone who has 900 hours gameplay and has played on both NA and EU.

    3 million copies my ass.. That would mean you have people playing the game you don't. You might have 100k concurrent users and thats a big MAYBE.

    Diablo 3 sold 8-10 m copies? we all saw how that turned out.

    I dunno where or who this game sold 3 million copies too because the people are just not. People actualy believe what Anet says? a for profit company willing to do anything to make a buck? They have the biggest scapegoat in colin johnanson or w/e his name is...that guy will say or do anything with a smile.


    Maybe they did sell 3 m copies but 2.9 million uninstalled.

     

    "I've played this game for 900 hours, 2 level 80s, 50K WvW kills - this game is poo".

    You've been playing 6 hours per day in a game you don't like and is empty and killing other players as well.

    Ok.

     

    People embellish their credentials thinking it somehow adds weight to their statement.  If I say, "I was on a plane once and the peanuts were terrible" it holds less weight than if I say, "I've been a commercial airline pilot for 15 years and the peanuts on planes are awful. Don't eat them."

    If in 1982 we played with the current mentality, we would have burned down all the pac man games since the red ghost was clearly OP. Instead we just got better at the game.
    image

  • evilastroevilastro EdinburghPosts: 4,270Member
    Originally posted by Roxtarr
    Originally posted by Gaia_Hunter
    Originally posted by xArsonistx

    As someone who has 900 hours gameplay and has played on both NA and EU.

    3 million copies my ass.. That would mean you have people playing the game you don't. You might have 100k concurrent users and thats a big MAYBE.

    Diablo 3 sold 8-10 m copies? we all saw how that turned out.

    I dunno where or who this game sold 3 million copies too because the people are just not. People actualy believe what Anet says? a for profit company willing to do anything to make a buck? They have the biggest scapegoat in colin johnanson or w/e his name is...that guy will say or do anything with a smile.


    Maybe they did sell 3 m copies but 2.9 million uninstalled.

     

    "I've played this game for 900 hours, 2 level 80s, 50K WvW kills - this game is poo".

    You've been playing 6 hours per day in a game you don't like and is empty and killing other players as well.

    Ok.

     

    People embellish their credentials thinking it somehow adds weight to their statement.  If I say, "I was on a plane once and the peanuts were terrible" it holds less weight than if I say, "I've been a commercial airline pilot for 15 years and the peanuts on planes are awful. Don't eat them."

     Yeah I still play the game, have 3 level 80s and my total playtime is still only 400 hours since launch. To say you hate the game and played 900 hours is mind boggling. Why would anyone dedicate that much time to something they hate?

  • SovrathSovrath Boston Area, MAPosts: 18,455Member Uncommon

    Barring losses by Aion and Lineage II

    Well, maybe "totally free" isn't the way to go.

  • SovrathSovrath Boston Area, MAPosts: 18,455Member Uncommon
    Originally posted by Jakdstripper
    how the hell does Korea (assuming south Korea), a nation of 50 mil people, beat Europe + N America's in sales? :O....last i checked Koreans' are not rich....how the heck do they spend that kind of money on mmos? what does the average Korean family do once they get a paycheck ? "buy food, pimp out my GW2 character, and then pay rent if there is anything left..."?
     
     
     

    Maybe more South Koreans buy NC's games than people in other parts of the world.

  • RoxtarrRoxtarr Freeland, MI, MIPosts: 1,122Member
    Originally posted by Sovrath

    Barring losses by Aion and Lineage II

    Well, maybe "totally free" isn't the way to go.

    I think to be successful with a "totally" free game, you need a game that is clearly better than the competition since there is no sub to hold you.  If you pay $15 then you need to stick with it since you already spent your money.  

    Sadly, some studios think that the sub is the barrier when maybe it's actully the game that's the problem.  I have issues with Aion than weren't solved by removing the sub.  It didn't suddenly make the game better.  

    If in 1982 we played with the current mentality, we would have burned down all the pac man games since the red ghost was clearly OP. Instead we just got better at the game.
    image

  • PrenhoPrenho AracajuPosts: 298Member
    I would want to play Lineage 1 again, no game I've played after L1 was good. NCSoft should allow players of other  countries to play on korean servers, off course, they could deliver an english client for foreign people.
  • coretex666coretex666 PraguePosts: 1,934Member Uncommon
    Originally posted by Gaia_Hunter
    Originally posted by coretex666

    Healthy earnings.

    As a Big Four auditor, I move a little further in the report to P&L, perform analytical review, find out that the net income decreased by 61%.

    You should take a look at COS as well. Sales on their own dont provide you with enough information to make a conclusion. Especially not the one that they are healthy.

    Luckily we are here to discuss games not finance, right.

    Net income increased 31%. The 61% decrease wasthe parent company only.

    Their gross profit margin was 20% in 2012, with 20% in 3Q12 and 40% 4Q12.

    I guess you should have moved a little bit further.

     In the consolidated financial statements yes.

    However, the declining parent company should not be ignored completely due to its significance in the consolidated FS.

    Saying that the earnings are healthy in spite of the fact that revenues of parent company which represent 63% of the consolidated revenues decrease by 5% while it`s cost of sales which represent 55% of consolidated COS increase by 30% is quite bold, dont you think?

    If the parent company keeps declining, I would not be so certain that the relatively small subsidies can ensure the consolidated result to be profit in the future.

    Not saying it will inevitably happen. In fact, if I was to guess, I would probably say that the company (group) will do fine in the future, but I would not be so certain to put my money on that.

    Waiting for L2 EU Classic

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