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Atari 2nd half/full year financial statement
Dinendae
Member Posts: 1,264
For those interested in such things, Atari has their 2009 - 2010 second half/full year consolidated financial report up: http://corporate.atari.com/MT-3.34-en/mt-static/FCKeditor/UserFiles/File/2010-05_21_PR_FY10_results_final_UK_DEF.pdf
Keep in mind, Atari's last financial year ran from April 1, 2009 - March 31, 2010; if you don't remember that, the report can get a bit confusing. It looks like Atari was able to bring their loss down considerably as compared to the previous 2008 - 2009 fiscal year, though they still had a net income loss of -€19.4 million.
There are also some interesting tidbits in there, such as games slated for release in the future ()including the next Witcher game). For our purposes, the most relevant part is probably : "Online revenue, comprised primarily of subscription and digital distribution revenue, was €12.5 million – an increase of €9.9 million over the prior year. This increase was primarily due to subscription and digital distribution revenue from the launch of the Star Trek Online and Champions Online MMO games. Online revenues were 11% of total net sales as compared to 2% in the prior fiscal year."
While not a complete picture mof how well Cryptic's games have done, it does give us a much better idea than the marketing spin numbers Cryptic was trying to feed everyone (i.e. the 1 million user accounts created on their websites, or Ivan's fairly recent claim of 1.2-1.3 million user accounts). All in all, the report was an interesting read though things might not be as rosy for Atari once the bail out from the credit instution they recieved in 2009 comes due (if I remember correctly) around December of 2010.
"Oh my, how horrible, someone is criticizing a MMO. Oh yeah, that is what a forum is about, looking at both sides. You rather have to be critical of anything in this genre as of late because the track record of these major studios has just been appalling." -Ozmodan
Comments
Interesting read, thanks for the post.
So is there any way possible to do some backwards math and figure out how many subs they actually have? And then possibly compare it to next quarter's results?
It would probably have to be some sort fo sliding scale thing - ie, if they had X lifetime subs, it would have to be Y regular subs
And the way I'm reading it, box sales are dumped in with the sub results as well
Maybe those numbers don't look so hot when you think about it that way
Thanks for posting this!
Edit:
Assuming 10k lifetime subs for STO:
10k * 239 = 2.390,000 euros X 1.29 dollars per euro = $3,0183,000 would be for the people they suckered into buying lifetime subs for STO
5k LTS would be about half that
I can't even begin to guesstimate how many 1 year, 6 month, or 3 month subs they have
C-store junk which would prolly be in their "online revenue" would go into that as well
And I'm not sure how much the LTS for CO was
Either way, I am comfortable with the assumption that approx 1/3 or 1/6 if you will of their increase was due to the STO LTS sales.
And 11 million euros = ballpark 14,190,000 in US dollars. Assuming 10 million wow subs at 14.95 per month, Cryptic's yearly income for CO and STO is around 1 percent of Wow's yearly income.
Hardly a ringing endorsement of their business model.
Apologies if my math is wrong.
RELAX!@!! BREATHE!!!
I could be wrong, but the sense I had was that the online distribution/subscription numbers were seperated from retail (re: actual store) sales. If that is the case, which I think it is, then we will probably never know how many actual copies of the game were sold. The best we can do with these numbers is to get a very rough sense of how many subcriptions the two games are bringing in. I think we will need to wait until the next report before we can get a clearer picture of actual curent subscription numbers.
As for lifetime subs, the sense I had from their 6 month and Q2 financial reports was that they would no longer be able to spread each lifetime sub amount over several months to claim it as future monthly revenue. I could be wrong on that though, in which case those lifetime subs would still be included in the online subscription revenue. Either way the numbers aren't too hot, especially when you factor in that a lot of people were buying multiple copies of the game to get various specialty items.
"Oh my, how horrible, someone is criticizing a MMO. Oh yeah, that is what a forum is about, looking at both sides. You rather have to be critical of anything in this genre as of late because the track record of these major studios has just been appalling." -Ozmodan
^^ I edited my post to add some envelope math with the assumption that they have to include the revenue from an LTS up-front.
If my math is wrong or I'm leaving things out, apologies, I'm not super good at it, just guessing really.
RELAX!@!! BREATHE!!!
More math:
Assuming that every single dime of that increase of ballpark 14 million was from monthly subs for STO on the first billing cycle after launch, the absolutely maximum number of paying account they could have had at launch was 943,000 and some change.
That is assuming CO didn't even exist and they didn't sell anything for it.
If you assume 10k LTS for STO which I have seen tossed around on various forums, etc, and a ballpark 50/50 split in revenue generated by both properties...that would leave around $4 million in subs for STO for that first monthly billing cycle, around 260,000 subs.
One can infer from the "well over 100,000 subs" that they've managed to piss off around half or slightly greater of their initial player base into quitting as of a couple months ago.
My grand conclusion is that playing STO is like trying to show up for one of Kevin Federline's rap concerts during his brief flameout rap career.
RELAX!@!! BREATHE!!!
I believe the cost for a lifetime subscription before launch day was $249, while after launch it went up to $299. Since they made it sound like the lifetime sub offer for STO was going to end before the game went live (as was the case with CO), I think it's fair to assume that most of the lifetime subscriptions sold were at the $249 price. You should use the $249 cost in any calculations done, as it should not skew any results too much in favor of a higher number of active subs.
Additionally, I have seen some people make the case that there could have been up to 60,000 or so lifetime subs sold based on the order numbers several people in my guild quoted to me. I however do not believe it was that many; my gut feeling is that the order numbers generated were for both CO and STO, and therefore can't be accurately estimated. As a wild guess, I will go with 10,000 lifetime subscriptions as a base (though I could easily see it as high as 20,000).
Without knowing any real numbers, we have to look at the digital distribution/online subscription revenue reported and remember that the following things all are added into that number: Digital copies of both CO and STO, digital copies of other games sold (such as Ghostbusters which by all accounts was a popular selling title), lifetime subscriptions, multi-month subscriptions, C-Store items (which were available on launch day), and possibly other online revenues which I am not aware of. When looking at it that way, the revenue amount goiven appears fairly dismal.
I think we should get a far better sense of subscription numbers in the next financial report, as those additional revenue items shouldn't be factoring in too much; for example, sales of digital copies of the game will have dropped significantly enough to not skew the numbers significantly.
"Oh my, how horrible, someone is criticizing a MMO. Oh yeah, that is what a forum is about, looking at both sides. You rather have to be critical of anything in this genre as of late because the track record of these major studios has just been appalling." -Ozmodan
K-Fed had a rap career? o.O
On a less cheeky note I am going to guess that STO is currently around 50,000 - 60,000 subscribers, not counting lifetime subscribers. I don't have anything substantial for that wild guess, other than a gut feeling and Cryptic's single-minded determination to keep alienating a good number of their current players.
I will say that your guesstimate of 260,000 initial players does feel very close to me; I was figuring between 200,000 and 300,000 initial subscribers (including lifetimers) myself.
"Oh my, how horrible, someone is criticizing a MMO. Oh yeah, that is what a forum is about, looking at both sides. You rather have to be critical of anything in this genre as of late because the track record of these major studios has just been appalling." -Ozmodan
^ I think that part of the math work "feels" right.
Without knowing how much they spent on the development, it's kinda hard to see if they have made their money back or even if they can.
RELAX!@!! BREATHE!!!
That is a remarkably undetailed financial report.
Subscription revenues can only be recognized as they are earned. For example lets say you pay $60 or six months of service. The company would recognize $10 each month rather than the $60 all at once.
Wtih lifetime subs though I'm not sure how quckly that money would be recognized. They would probably have a wide degree of descretion when picking a period over which to recognize the lifetime sub, but I'm sure it wouldn't be up front all at once, probably over 12-24 months.
^ In my mind, this makes the drop in active subs for STO look a hell of a lot more precipitous and worse than assuming that they have to tkae the LTS and yearly subs at face value at time of transaction, and they are not allowed to amortize them.
More along the lines of losing at least 80% [edit: or more] of their initial subscriber base.
Not sure how a company can do that and survive, honestly.
RELAX!@!! BREATHE!!!
Really we would need a financial report for Cryptic studios, as opposed to the consolidated report of Atari, to really do any sort of meaningful analysis.
On the previous two finacial reports, they were spreading the money from multi-month and lifetime subscriptions as if they were monthly subscriptions (i.e. they were dividing the amount by the normal monthly cost and then projecting income over a number of months equal to the result). However according to comments in those financial reports about the new French laws that went into effect last year, it seems that they can no longer do that. Whether or not that means the money reported was grandfathered in (and thus they can still use it to project monthly income for the next several months), has to be all reported on this report, or cannot be reported anymore I do not know.
As for how detailed the report is? While this is a consolidated financial report, previous Atari financial reports had about the same amount of content to them.
"Oh my, how horrible, someone is criticizing a MMO. Oh yeah, that is what a forum is about, looking at both sides. You rather have to be critical of anything in this genre as of late because the track record of these major studios has just been appalling." -Ozmodan
You are making a slight error, as there is never going to be a financial report for Cryptic: Atari owns Cryptic, so this is Cryptic's financial report (along with every other branch of Atari mixed in). What you are wanting are the Cryptic department's numbers, or at least to have Atari list their Cryptic division's numbers seperately. That is just not going to happen; not even Atari's shareholders get that information. What you see in this financial report is pretty much what every financial report Atari has given looks like, minus the creative accounting they used to be able to do before the new French laws kicked in. While I am sure that Atari's accounting department knows exactly how well (or poorly) Cryptic's two games have done, we just will not see that without some person on the inside leaking that information out.
If the next financial report that comes out doesn't have any new Atari titles on it, then the online subscriptions/distribution section will be as close as we can get to Cryptic's true numbers. Divide that amount by the normal monthly subscription fee, and you will have an approximation of how many subscribers CO and STO have. That will be the best you can fine tune these numbers. That being said, you can get a vague, general sense of things by looking at the current numbers. Is it accurate? Heck no, but it is as accurate as we can get at the moment.
"Oh my, how horrible, someone is criticizing a MMO. Oh yeah, that is what a forum is about, looking at both sides. You rather have to be critical of anything in this genre as of late because the track record of these major studios has just been appalling." -Ozmodan
Also remember that the "Online revenue", as stated, is everything sold not by retail stores. And, Atari released LOTS of games in this fiscal year (Jun 2009) on Steam, with some titles based on popular IPs like Chronicles of Riddick, Ghostbusters, Codename Panzers, in addition to others they already had there, and also started selling on Impulse: Total Annihilation and The Witcher: Directors Cut (Jan 2010). And probably some other digital distributors as well (didn't check them all).
Thanks for the report, OP. Unfortuantely for us armchair analysts, Atari isn't like Funcom where 90%-ish of their revenue is from one title, so it's virtually impossible to get any sense of STO's sub numbers from these financials. I think the only important number there was the 19.4 million euro loss. How much longer can Atari continue to lose money?
The other factor one must consider when a thinking about a company's revenues are the projections going forward. Not only are those numbers frontloaded by the LTS numbers, but also, future numbers will go down as a direct result, the liftime (suckers) subs will not generate any sub revenue whatsoever.
Which is why the company MUST continue to put out games (of probably dubious quality) rapidly and at regular, expedited intervals. It is not like they will have solid subscriptions revenue to fall back on like makers of EvE or LOTR. Which is incidently why there will not likely be much more substantial development for STO (albeit in the sorry shape it is currently in): Atari needs the money they make/made to fund the next game.
You know...the more I think about this, the more I'm convinced that this is incredibly hideous news for Atari.
I wonder how many iterations of the COH engine they're going to have to roll out for their current business practice model to be considered a success by them.
RELAX!@!! BREATHE!!!
Well, positive turning point for Atari who are losing less money than they were but probably crushing news for their online business with Cryptic and the Champions Online and Star Trek Online games. Those bonus installments look in jeopardy.
If the online revenue were for only one of those games it might not look so bad.
I guesstimate 4:1 split between STO and CO for that online revenue based on what was speculated about box sales for STO and subscription numbers. Bearing in mind that some STO subscriptions were actually free months given away with pre-orders may be the split favours CO a little better than that but not much probably.
However, if I knew anything about CO box sales and speculated subscriptions may be I'd end up with something that doesn't add up anyway you looked at it so take with large pinch of salt.
Edit: For clarity and to fix a typo.
More fuel anyway for making a claim that early release MMOs that try to make money from customers through premium subscriptions and stores is not a successful model for development.
Actually, I was rather impressed that they managed to bring down their loss from the -€221.9 million loss they had the previous year. Granted they got a lot of money from selling off their European distribution to Namco-Bandai, and they managed to get financed when they were about to default on a previous loan, so they probably will not be able to manage that again.
Additionally, they have several outstanding lawsuits going on: Turbine is suing them for $30 million for breach of contract, Hasbro is suing them to revoke the D&D franchise for breach of contract, a German distributor is suing them for breach of contract (very similar in allegations to the Turbine lawsuit), and an employee is suing them for royalties owed on a game he helped develop for Atari. Anyone else noticing a pattern?
Even a couple of these lawsuits going against Atari could put them majorly back in the hole again, especially losing the D&D franchise if Cryptic is indeed working on a NWN MMO as some think. Also, if I read the previous financial reports correctly, the financing Atari recieved will come due around December of this year. If they haven't gotten things straightened out by then, they might not be able to get a third loan.
"Oh my, how horrible, someone is criticizing a MMO. Oh yeah, that is what a forum is about, looking at both sides. You rather have to be critical of anything in this genre as of late because the track record of these major studios has just been appalling." -Ozmodan
Using the Captain's database we get a figure of around 190K active accounts. Using these financial reports we get a figure of about 260K active accounts. I think this means that the number is somewhere in the middle.
I'll bet that the current number is quite low.
Active? Didn't Captain's database list ALL accounts ever created? O.o
The math gets funny because of the lifetime subs,,, $249 or $299 and it is still a single box/acct sold. Each one of those is the same a 5 or 6 regular boxes.
And boxes sold is probably a more accurate term than active accts, at this point. People that scan the whatever log are seeing all kinds of people that did not make it past the first month.
However many people quit in the first month or two, we don't know.... but I agree it is a lot.
You can not work out current active from those figures. However, when the next report roles round you will be able to see if they are doing better or worse than the launch year. Launch year being the biggest earning year for an MMO.
I'm fairly comfortable with the absolute maximum possible number of subs for STO is around 943,000 in the first month. That's assuming every dollar of online sales went into a 14.95 a month sub for STO, CO didn't exist, and they didn't sell anything else online.
Working down from there is a matter of calibration and taking various statements that they have made.
One inference that I have made is that they were probably being intentionally misleading with their "1.2 to 1.3 million user accounts".
The other thing that strikes me is that they only have what, 190k in the Captain's database, and that number includes cancelled accounts?
I can't see by any measure how their launch of STO and especially how any prospects for continuing development of STO is anything other than pathetic.
RELAX!@!! BREATHE!!!
Will not agree. If you use a credit card they charge you therefore they recognize their money and you can stop playing in the next day or two. So what? You'r arguments are not correct at all.