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NC second quarter earnings

13

Comments

  • gervaise1gervaise1 Member EpicPosts: 6,919
    Originally posted by DMKano
    Originally posted by fs23otm

    What I haven't seen mentioned is that the numbers posted ate NCSOFT's cut.... not the total made on box sales.  NCSOFT was the publisher and only gets a percentage of the sales, carbine gets a percentage, if it had physical boxes the retailers get a cut....

    All we know is NCSOFT's numbers....and we don't knmow their cut percentage.

    Box sales somewhere between 450k (100% NCSOFT CUT) and 4.6 million (1% NCSOFT CUT)

    Estimate realistically at 60% cut... is 775k box sales...

    No - the numbers are total sales, your assumption is mistaken.

    There is no %cut - its 100% NCsoft financial report.

    Carbine are indeed 100% owned by NCSoft.

    There is a "retail discount" however - although it isn't really a discount (see below).There is also sales tax to allow for as that is excluded from the earnings numbers.

    Sales tax first. Easy in the EU - a mess in the US. However if the $60 price includes 20% tax that makes the ox price of a standard edition $50. So c. 540k copies. Or c. 380k if everyone bought the deluxe.

    Non-digital sales are more difficult to quantify. Sellers like GameStop do get a chunk of what you pay when you buy a retail box. What usually happens is e.g.

    • GameStop buy 200k say copies at $25 say from NCSoft.
    • GameStop add 100% say mark up, so $25 becomes $50; then they add sales tax and the $50 becomes $60.
    • GameStop start to sell at $60. As interest wanes they reduce the price. Eventually they may sell "at a loss". They will cover their outlay if they sell 100k at an average of $60. To make a profit they need to cover their staff costs etc..
    Deals between publishers and retailers have lots of clauses: payment terms; cancellation charges; who pays for any store promotion; who pays for delivery to the retailer; who pays for any warehousing; option prices on future purchases. And how big the discount get varies: how popular is the title, how many copies is the retailer buying, sale or return conditions (unlikely but possible). As an example however Funcom reported that they got 20-23% of the AoC box price - which would be c. $15; NCSoft are also WildStar's publishers so the number should be higher however at the end of the day it might only be $20 ... but for some large number of copies. Hence its not really a "cut".
     
    In the above example NCSoft would have booked $5M for the sale to GameStop. This would not mean that WS had sold 200k copies to end users - just to GameStop!
     
    What it does mean is that next quarters we can assume that retail sales revenue will be zero - even if the game is selling in the stores we can assume that NCSoft have already booked the revenue. And whilst there might be some digital sales it will probably all be from subs. 
     
    As DMKano says however the sales number looks worryingly low - new post below.
     
     
     
  • gervaise1gervaise1 Member EpicPosts: 6,919

    Looking at the 3. Cost Breakdown:

    NCSoft attributed a rise in variable costs Wildstar. Box production costs at nearly 1,000 higher stand out. Digital sales will also have incurred payment processing fees of course but they are lost in cash shop purchases.  

    Much more significant is the rise in Marketing costs - which NCSoft also attributed to Wildstar. Nearly 10,000 higher than a year earlier and over 11,000 higher than the previous quarter. To me these numbers suggest they were hoping for higher sales.

    So 1,000 or so variable costs and 10-11,000 marketing costs to set against 28,048 revenue. That is a big chunk imo. And on top of that you have the (sunk) development costs and ongoing development / customer support costs.

    Now if revenue continues at about the same level - retention of a third say generating $45 or so in the next quarter - and marketing drops back to 3,000 or so then it will look better. As it stands however it looks like a major investment.

  • gervaise1gervaise1 Member EpicPosts: 6,919
    Originally posted by Indigent

    /

     

    For a game to have only been available to purchase since , lets call it june.  How on earth can anyone determine success or failure as of yet? based on what? 

    ESO is failing? really? RIP wildstar? please show me the last mmo to actually close its doors.

     

    I couldn't think of one either of the top of my head, had to go to google in search of the troll rebuttal.

    The reason for the speculation is that sales are front loaded. SWTOR for example sold 2.1M copies in its first 6-8 weeks and only another 300k in the next 3 months. Despite EA doing more to promote the game.

    To sell extra copies NCSoft will have to spend more on marketing. Usually marketing is a law of diminishing returns. So they spent 10-11,000 during the launch period and that generated 28,000 sales revenue. To generate the same sales they would probably have to spend much (much) more.

    As far as mmos closing: MXO, Vanguard, Asheron's Call has been put out to pasture, (AC2 closed but came back and now. A roman one I can't remember off th etop of my head. Various f2p titles - CloneWars and Free Realms, a pirate one. Several that were still born - they sort of launched but closed so not really sure they count. The idea that mmo = gravy train forever was debunked several years ago. 

    Edit: and how could I forget Tabula Rasa, closed by NCSoft when it failed to make the grade.

  • AmbrosiaAmorAmbrosiaAmor Member Posts: 915
    Originally posted by Distopia
    Originally posted by bcbully
    WS and TSW seem to be/have been in the same boat around the same time after launch. NCsoft is a much more stable company though. 

    True but Funcom is a lot more likely to let something run on fumes before doing something about it, like shutting it down. I think that's where a lot of the intrigue comes from concerning WS and NC.

    They are not known to just let something limp along.

     

    Pretty much this. NCSOFT is notorious for shutting down games (quicker in recent years) than to let them limp along for years and years on end... or to actually make improvements on said games. They take care of their own market very well as we can see with Lineage I and other titles, but the same cannot be said for the western market.

     

    Every single NCSOFT game that started out as a P2P game ended up shutting down or going F2P + P2W in the west... no exceptions so far. I was hoping that Wildstar would have been performing better but it doesn't surprise me. And with the recent official response from one of the moderators regarding population issues... well it wouldn't surprise me if NCSOFT announces that the game is going F2P by the end of the year.

    image

  • Mange1Mange1 Member UncommonPosts: 266

    http://www.reddit.com/r/WildStar/comments/2dizeq/wildstar_subscriptions_and_the_corporate_world/

    "There's a lot of bad math and guessing going on out there in regards to Wildstar's subscriber base and how it impacts the future of the game.

    This post is going to explain why it's too early to celebrate or panic, and what corporations and investors really look at when deciding the future of a product/game.

    1) Investment money is gone, and already accounted for: There's a lot of talk about the 'estimated' 100 million dollars put into Wildstar's development costs. That money is spent, and was balanced against the TOTAL profits in the years that it was spent. This is important because...

    2) The vast majority of investors look at overall portfolios, not in individual product performance: Even in the gaming field, the people with the money don't particularly care about individual games unless they are showing a year-on-year loss. And even then, sometimes you keep a loss leader as a technology demo, a place to park a team until the next big project comes along (partly mitigating their cost), etc.

    3) It is far too early to calculate monthly profits: The only solid figure we know about right now is box sales, around 450K so far in a partial recording period. Retention might be great, or it might not. Subscriptions/CREDD might be great, or they might not.

    Every attempt to estimate subscription and retention rates based on login activity on any MMO in the past 5 years has been statistically laughable. You need inside information to do a decent job of it.

    There was a good study done on EVE because they could use large numbers over the course of years, but EVE is somewhat of a rarity in the MMO industry:

    http://www.thefengs.com/wuchang/work/cstrike/netgames07_long.pdf

    4) At this point, investors will be looking at ROI, not re-cap: Because NCSoft has a robust portfolio and has shown consistent year-after-year profits, it is understood that they're still considered a 'buy' stock. Profits and fiscal performance are about what they were in March 2013.

    According to the last fiscal review, estimates are that Wildstar will about equal Lineage II revenues in 2014. NCSoft will still make millions this year, and own two huge buildings outright, and has many-more-millions in cash reserves.

    In short: NCSoft is a cash flow cow. Even if it took 3 or 4 years to re-cap initial investment on WildStar, investors will likely be fine with that.

    5) Reflections on the Studio: This is an area, on the other hand, that recap matters for. FUTURE projects from Carbine will be judged by the recap rate of Wildstar. Carbine itself is not buffered by the rest of NCSoft's portfolio, as far as their selection for big titles down the line.

    It is in Carbine's best interests to continue to improve efficiency of support, performance, QA, etc. If the history of other MMO Dev teams holds true: A better reputation will improve the project's re-cap by attracting more subscribers, which will in turn encourage more cap-investment in the team itself, which will prepare it for large expansions and eventually, new projects down the line.

    TL;DR: Investors care about yearly profits of NCSoft, which are good and have been for years. Players care about the game covering monthly costs and running enough profit for growth, which is unclear and will be for months. Carbine should care about investment re-cap, if they ever want a major title again."

     

     

     

    Sums it up perfectly, even in the unlikely event that Wildstar isn't making a good profit the game will still be fine for years to come.  I won't even take this 100 million development nonsense into account seeing as it has absolutely no credible sources upon searching for any myself.  Save for the fact that I had never heard that number before this topic and I've been in since the absolute first closed beta.

  • grimalgrimal Member UncommonPosts: 2,935

    I have to agree with others concerning the 100 million number.  Where is this information coming from?  Without knowing the cost of its development, we really can't make any conclusions.

    Frankly, I knew next to nothing about the game prior to launch.  I think for the most part, it's still a relatively unknown game amongst the general gaming crowd.  There was little to no marketing done on it.  It's not relying on any known IP.  Hell, I think all the commotion about it prelaunch was because of everyone trying to find a new MMO after ESO arrived.

     

  • bcbullybcbully Member EpicPosts: 11,838
    Originally posted by Torvaldr

    $100M as a dev cost is still pure speculation and conjecture, no matter the napkin math used to try and justify the assertion.

    We all see what we want. If you're a hater you'll spin it as a failure. If you're a fan you'll spin it as acceptable.

    I like the game. I think it's pretty fun. As a self-admitted hater of the mandatory subs, what I see are both Wildstar and not meeting revenue expectations because they foolishly bought into the age old trope that subs provide a better, more stable revenue stream. If you're going to charge a mandatory sub then the game has to be very compelling. Wildstar either needed to be as good as Lineage 1 or use Buy to Play ala GW2.

    I also see that hardcore players can't support their own preferred game play style. This reinforces the idea I've had for a long time that hardcore pve players (raiders) can't support their own games and rely on the non-raiders to keep their games alive. I hope game developers start to acknowledge this through design and make better progression for non-raiders.

    On the other hand, FFXIV seems to be pulling off the sub thing in a way  Wildstar can't, or at least aren't.

    There, fixed it. image

    "We see fundamentals and we ape in"
  • KabulozoKabulozo Member RarePosts: 932
    Originally posted by Mange1

    http://www.reddit.com/r/WildStar/comments/2dizeq/wildstar_subscriptions_and_the_corporate_world/

    "There's a lot of bad math and guessing going on out there in regards to Wildstar's subscriber base and how it impacts the future of the game.

    This post is going to explain why it's too early to celebrate or panic, and what corporations and investors really look at when deciding the future of a product/game.

    1) Investment money is gone, and already accounted for: There's a lot of talk about the 'estimated' 100 million dollars put into Wildstar's development costs. That money is spent, and was balanced against the TOTAL profits in the years that it was spent. This is important because...

    2) The vast majority of investors look at overall portfolios, not in individual product performance: Even in the gaming field, the people with the money don't particularly care about individual games unless they are showing a year-on-year loss. And even then, sometimes you keep a loss leader as a technology demo, a place to park a team until the next big project comes along (partly mitigating their cost), etc.

    3) It is far too early to calculate monthly profits: The only solid figure we know about right now is box sales, around 450K so far in a partial recording period. Retention might be great, or it might not. Subscriptions/CREDD might be great, or they might not.

    Every attempt to estimate subscription and retention rates based on login activity on any MMO in the past 5 years has been statistically laughable. You need inside information to do a decent job of it.

    There was a good study done on EVE because they could use large numbers over the course of years, but EVE is somewhat of a rarity in the MMO industry:

    http://www.thefengs.com/wuchang/work/cstrike/netgames07_long.pdf

    4) At this point, investors will be looking at ROI, not re-cap: Because NCSoft has a robust portfolio and has shown consistent year-after-year profits, it is understood that they're still considered a 'buy' stock. Profits and fiscal performance are about what they were in March 2013.

    According to the last fiscal review, estimates are that Wildstar will about equal Lineage II revenues in 2014. NCSoft will still make millions this year, and own two huge buildings outright, and has many-more-millions in cash reserves.

    In short: NCSoft is a cash flow cow. Even if it took 3 or 4 years to re-cap initial investment on WildStar, investors will likely be fine with that.

    5) Reflections on the Studio: This is an area, on the other hand, that recap matters for. FUTURE projects from Carbine will be judged by the recap rate of Wildstar. Carbine itself is not buffered by the rest of NCSoft's portfolio, as far as their selection for big titles down the line.

    It is in Carbine's best interests to continue to improve efficiency of support, performance, QA, etc. If the history of other MMO Dev teams holds true: A better reputation will improve the project's re-cap by attracting more subscribers, which will in turn encourage more cap-investment in the team itself, which will prepare it for large expansions and eventually, new projects down the line.

    TL;DR: Investors care about yearly profits of NCSoft, which are good and have been for years. Players care about the game covering monthly costs and running enough profit for growth, which is unclear and will be for months. Carbine should care about investment re-cap, if they ever want a major title again."

     

     

     

    Sums it up perfectly, even in the unlikely event that Wildstar isn't making a good profit the game will still be fine for years to come.  I won't even take this 100 million development nonsense into account seeing as it has absolutely no credible sources upon searching for any myself.  Save for the fact that I had never heard that number before this topic and I've been in since the absolute first closed beta.

    Yes, the development cost of WS as well as any other NC games are made in a way they are balanced with the profits, NC always end the year with substantial net income. I find odd Wildstar cost of 100 million USD because Blade&Soul and Lineage Eternal have cost each game 60 million USD.

  • VolgoreVolgore Member EpicPosts: 3,872
    Looks like someone couldn't take the truth and got some posts removed.

    image
  • SevenTimesSevenTimes Member CommonPosts: 2

    Sums it up perfectly, even in the unlikely event that Wildstar isn't making a good profit the game will still be fine for years to come.  I won't even take this 100 million development nonsense into account seeing as it has absolutely no credible sources upon searching for any myself.  Save for the fact that I had never heard that number before this topic and I've been in since the absolute first closed beta.

    Two things up front. Yes, this is my first post. I am a long time lurker. Second, I want to explain that I hope for nothing but good things for the men and women at Carbine. I hope they find success and I sincerely wish them the best.

    Now let me be clinical in my napkin math and help you to understand why 100 million is conservative at best. I want to be completely transparent and cautious in all my estimations; "showing my work" if you will. It is a fact that Carbine has been around since 2005. They were with NCSoft back then and were a team of WoW devs who left Blizzard. (Similar to Arena.Net) This means Wildstar, in whatever incarnation, has been in development for 10 years. FYI - This is not speculation and is easily verifiable. Further, I am going to use very conservative growth numbers for the company by year.

    • 2005 - 20
    • 2006 - 40
    • 2007 - 80
    • 2009 - 100
    • 2010 - 150
    • 2011 - 150
    • 2012 - 200
    • 2013 - 200
    • 2014 -200

    Team size isn't really speculation either. A project the size of this requires a fairly large team, and Carbine has to have been running fairly large for a while now. They could be leaner. If so, let's only go up to 150 through the years and you still hit $100million. (Or close to.)

    Ask any, and I mean any person who develops business plans, and they will tell you to account for $100K per head. (This is California, after all.) They'll probably tell you to account for more. There are several reasons for this including software, hardware, unemployment, office space, insurance, etc. I come up with $114 million on personnel alone over the course of the project. This doesn't include other miscellaneous costs, outsourcing, marketing, etc. Let me again state how incredibly conservative I am being. It is, I am afraid, more likely that this is one of the most expensive projects ever made given the length of development time alone. My guess is that they are *lucky* in the extreme if they got this thing out for under $200 million. They would have to be incredibly savvy to have done so. Yes, I am saying I think that $100 million is half of what this actually cost.

    The idea that NC Soft in Korea views the costs as "sunk" costs is, well, incredibly naive? NC Soft is more likely up in arms about the sunk cost. Look at the reaction to Tabula Rasa and Auto Assault. They shut those projects down in a hot minute. From everything we have heard, though this is *speculation,* City of Heroes was actually earning a tiny profit. That was also shut down. Now, given the report this week, I'll let you do the earnings vs. my conservative cost, but believe me, no one at NCSoft is going to be happy with the numbers. Again, to be pesky, I don't think I can overstate how ultra-conservative the cost of $100 million is considering the time in development alone.

    Again, I sincerely hope the people who have put in the effort and part of their lives into Wildstar wind up fine. But somehow believing that 100 million is even close to being out of scope isn't sensible, unless you think that is too small a figure. I didn't want to argue here, I just wanted to help shed some light on this earnings report. If nothing more, maybe my figures will encourage you to go support them. I am afraid they have a lot of money to make-up.

     

  • AmbrosiaAmorAmbrosiaAmor Member Posts: 915

    It seems server populations are much worse than initially thought. There seems to be a unanimous agreement that almost every server is currently having population issues except for the top PVE and PVP server. What is alarming is that the game isn't even 3 months old. Carbine made another statement today stating that they understand that this is a very hot topic and a reoccurring one at that. They are allowing the following thread to be the "official" thread for the time being in regards to servers being underpopulated.

     

    https://forums.wildstar-online.com/forums/index.php?/topic/108705-carbine-please-help-the-empty-servers/

     

    There is also another thread that talks about population issues but it mainly talks about NCSOFT's earnings report. The OP in that thread has written an excellent post and is asking Carbine to outline the short and long term plans to alleviate this problem. Considering that Carbine is allowing this thread tells me that they "might" have an announcement by September or by the end of August at the earliest.

    image

  • sumdumguy1sumdumguy1 Member RarePosts: 1,373
    Didn't we just see another report which talked about how Guild wars 2 was suffering from poor revenue?  Isn't amazing how we get two pieces of completely different information?  Just goes to show you, its hard to know exactly what to believe.
  • PioneerStewPioneerStew Member Posts: 874
    Originally posted by SevenTimes

    Sums it up perfectly, even in the unlikely event that Wildstar isn't making a good profit the game will still be fine for years to come.  I won't even take this 100 million development nonsense into account seeing as it has absolutely no credible sources upon searching for any myself.  Save for the fact that I had never heard that number before this topic and I've been in since the absolute first closed beta.

    Two things up front. Yes, this is my first post. I am a long time lurker. Second, I want to explain that I hope for nothing but good things for the men and women at Carbine. I hope they find success and I sincerely wish them the best.

    Now let me be clinical in my napkin math and help you to understand why 100 million is conservative at best. I want to be completely transparent and cautious in all my estimations; "showing my work" if you will. It is a fact that Carbine has been around since 2005. They were with NCSoft back then and were a team of WoW devs who left Blizzard. (Similar to Arena.Net) This means Wildstar, in whatever incarnation, has been in development for 10 years. FYI - This is not speculation and is easily verifiable. Further, I am going to use very conservative growth numbers for the company by year.

    • 2005 - 20
    • 2006 - 40
    • 2007 - 80
    • 2009 - 100
    • 2010 - 150
    • 2011 - 150
    • 2012 - 200
    • 2013 - 200
    • 2014 -200

    Team size isn't really speculation either. A project the size of this requires a fairly large team, and Carbine has to have been running fairly large for a while now. They could be leaner. If so, let's only go up to 150 through the years and you still hit $100million. (Or close to.)

    Ask any, and I mean any person who develops business plans, and they will tell you to account for $100K per head. (This is California, after all.) They'll probably tell you to account for more. There are several reasons for this including software, hardware, unemployment, office space, insurance, etc. I come up with $114 million on personnel alone over the course of the project. This doesn't include other miscellaneous costs, outsourcing, marketing, etc. Let me again state how incredibly conservative I am being. It is, I am afraid, more likely that this is one of the most expensive projects ever made given the length of development time alone. My guess is that they are *lucky* in the extreme if they got this thing out for under $200 million. They would have to be incredibly savvy to have done so. Yes, I am saying I think that $100 million is half of what this actually cost.

    The idea that NC Soft in Korea views the costs as "sunk" costs is, well, incredibly naive? NC Soft is more likely up in arms about the sunk cost. Look at the reaction to Tabula Rasa and Auto Assault. They shut those projects down in a hot minute. From everything we have heard, though this is *speculation,* City of Heroes was actually earning a tiny profit. That was also shut down. Now, given the report this week, I'll let you do the earnings vs. my conservative cost, but believe me, no one at NCSoft is going to be happy with the numbers. Again, to be pesky, I don't think I can overstate how ultra-conservative the cost of $100 million is considering the time in development alone.

    Again, I sincerely hope the people who have put in the effort and part of their lives into Wildstar wind up fine. But somehow believing that 100 million is even close to being out of scope isn't sensible, unless you think that is too small a figure. I didn't want to argue here, I just wanted to help shed some light on this earnings report. If nothing more, maybe my figures will encourage you to go support them. I am afraid they have a lot of money to make-up.

     

    Exactly this.  Given the long development cycle this is clearly a $100m plus development cost.  Even the most conservative estimates of staff costs alone push it well over $100m.    

  • GeezerGamerGeezerGamer Member EpicPosts: 8,855
    Originally posted by rojoArcueid
    as long as they realize (and accept) that their mmos dont need to make as much money  as Blizzard to be successful then they should be fine.

    http://www.forbes.com/sites/johngaudiosi/2012/04/23/arenanet-founder-mike-obrien-will-be-satisfied-when-guild-wars-2-is-the-most-successful-mmo-period/

     

    (Not arguing with you, just pointing out that certain expectations needed to be adjusted)

  • svandysvandy Member UncommonPosts: 277
    Originally posted by SevenTimes

    Sums it up perfectly, even in the unlikely event that Wildstar isn't making a good profit the game will still be fine for years to come.  I won't even take this 100 million development nonsense into account seeing as it has absolutely no credible sources upon searching for any myself.  Save for the fact that I had never heard that number before this topic and I've been in since the absolute first closed beta.

    Two things up front. Yes, this is my first post. I am a long time lurker. Second, I want to explain that I hope for nothing but good things for the men and women at Carbine. I hope they find success and I sincerely wish them the best.

    Now let me be clinical in my napkin math and help you to understand why 100 million is conservative at best. I want to be completely transparent and cautious in all my estimations; "showing my work" if you will. It is a fact that Carbine has been around since 2005. They were with NCSoft back then and were a team of WoW devs who left Blizzard. (Similar to Arena.Net) This means Wildstar, in whatever incarnation, has been in development for 10 years. FYI - This is not speculation and is easily verifiable. Further, I am going to use very conservative growth numbers for the company by year.

    • 2005 - 20
    • 2006 - 40
    • 2007 - 80
    • 2009 - 100
    • 2010 - 150
    • 2011 - 150
    • 2012 - 200
    • 2013 - 200
    • 2014 -200

    Team size isn't really speculation either. A project the size of this requires a fairly large team, and Carbine has to have been running fairly large for a while now. They could be leaner. If so, let's only go up to 150 through the years and you still hit $100million. (Or close to.)

    Ask any, and I mean any person who develops business plans, and they will tell you to account for $100K per head. (This is California, after all.) They'll probably tell you to account for more. There are several reasons for this including software, hardware, unemployment, office space, insurance, etc. I come up with $114 million on personnel alone over the course of the project. This doesn't include other miscellaneous costs, outsourcing, marketing, etc. Let me again state how incredibly conservative I am being. It is, I am afraid, more likely that this is one of the most expensive projects ever made given the length of development time alone. My guess is that they are *lucky* in the extreme if they got this thing out for under $200 million. They would have to be incredibly savvy to have done so. Yes, I am saying I think that $100 million is half of what this actually cost.

    The idea that NC Soft in Korea views the costs as "sunk" costs is, well, incredibly naive? NC Soft is more likely up in arms about the sunk cost. Look at the reaction to Tabula Rasa and Auto Assault. They shut those projects down in a hot minute. From everything we have heard, though this is *speculation,* City of Heroes was actually earning a tiny profit. That was also shut down. Now, given the report this week, I'll let you do the earnings vs. my conservative cost, but believe me, no one at NCSoft is going to be happy with the numbers. Again, to be pesky, I don't think I can overstate how ultra-conservative the cost of $100 million is considering the time in development alone.

    Again, I sincerely hope the people who have put in the effort and part of their lives into Wildstar wind up fine. But somehow believing that 100 million is even close to being out of scope isn't sensible, unless you think that is too small a figure. I didn't want to argue here, I just wanted to help shed some light on this earnings report. If nothing more, maybe my figures will encourage you to go support them. I am afraid they have a lot of money to make-up.

     

    Where is the actual math you did? You literally just keep saying "trust me this is not speculating," and then you speculate. If you were NOT speculating, you would have:

    1) Provide a document that proves (or easily verifies as you sat)  Wildstar was in production from the day Carbine was formed, as opposed to the more likely scenario which is multiple games/themes/genres were kicked around in early stages until a vision was solidified. Just because it one day BECAME WS, doesn't mean anything at all. It also probably accounts for virtually none of the games product cost beyond the initial equipment purchased and money spent on employees at the time.

    2) Provide proof of employee totals.

    3) Proof of average employee salary (and "ask anyone," is not proof)

    4) Even better, link me to any document showing any game anywhere and any time spent more than 100 million on employees alone.

    I'm gonna have to say I have my doubts that Wildstar is the most expensive development project ever, as you have said. Im guessing less than TOR, probably more than GW2. 

    Furthermore, MMOs are long term projects and no one expects to recoup the full cost of development in 2 months. "Ask anyone"

    Please visit my youtube channel for some H1Z1/DayZ casual roleplay videos!


    https://www.youtube.com/channel/UCrQoK5VZlwBBzpsksmXtjMQ

  • GeezerGamerGeezerGamer Member EpicPosts: 8,855
    Originally posted by svandy
    Originally posted by SevenTimes

    Sums it up perfectly, even in the unlikely event that Wildstar isn't making a good profit the game will still be fine for years to come.  I won't even take this 100 million development nonsense into account seeing as it has absolutely no credible sources upon searching for any myself.  Save for the fact that I had never heard that number before this topic and I've been in since the absolute first closed beta.

    Two things up front. Yes, this is my first post. I am a long time lurker. Second, I want to explain that I hope for nothing but good things for the men and women at Carbine. I hope they find success and I sincerely wish them the best.

    Now let me be clinical in my napkin math and help you to understand why 100 million is conservative at best. I want to be completely transparent and cautious in all my estimations; "showing my work" if you will. It is a fact that Carbine has been around since 2005. They were with NCSoft back then and were a team of WoW devs who left Blizzard. (Similar to Arena.Net) This means Wildstar, in whatever incarnation, has been in development for 10 years. FYI - This is not speculation and is easily verifiable. Further, I am going to use very conservative growth numbers for the company by year.

    • 2005 - 20
    • 2006 - 40
    • 2007 - 80
    • 2009 - 100
    • 2010 - 150
    • 2011 - 150
    • 2012 - 200
    • 2013 - 200
    • 2014 -200

    Team size isn't really speculation either. A project the size of this requires a fairly large team, and Carbine has to have been running fairly large for a while now. They could be leaner. If so, let's only go up to 150 through the years and you still hit $100million. (Or close to.)

    Ask any, and I mean any person who develops business plans, and they will tell you to account for $100K per head. (This is California, after all.) They'll probably tell you to account for more. There are several reasons for this including software, hardware, unemployment, office space, insurance, etc. I come up with $114 million on personnel alone over the course of the project. This doesn't include other miscellaneous costs, outsourcing, marketing, etc. Let me again state how incredibly conservative I am being. It is, I am afraid, more likely that this is one of the most expensive projects ever made given the length of development time alone. My guess is that they are *lucky* in the extreme if they got this thing out for under $200 million. They would have to be incredibly savvy to have done so. Yes, I am saying I think that $100 million is half of what this actually cost.

    The idea that NC Soft in Korea views the costs as "sunk" costs is, well, incredibly naive? NC Soft is more likely up in arms about the sunk cost. Look at the reaction to Tabula Rasa and Auto Assault. They shut those projects down in a hot minute. From everything we have heard, though this is *speculation,* City of Heroes was actually earning a tiny profit. That was also shut down. Now, given the report this week, I'll let you do the earnings vs. my conservative cost, but believe me, no one at NCSoft is going to be happy with the numbers. Again, to be pesky, I don't think I can overstate how ultra-conservative the cost of $100 million is considering the time in development alone.

    Again, I sincerely hope the people who have put in the effort and part of their lives into Wildstar wind up fine. But somehow believing that 100 million is even close to being out of scope isn't sensible, unless you think that is too small a figure. I didn't want to argue here, I just wanted to help shed some light on this earnings report. If nothing more, maybe my figures will encourage you to go support them. I am afraid they have a lot of money to make-up.

     

    Where is the actual math you did? You literally just keep saying "trust me this is not speculating," and then you speculate. If you were NOT speculating, you would have:

    1) Provide a document that proves (or easily verifies as you sat)  Wildstar was in production from the day Carbine was formed, as opposed to the more likely scenario which is multiple games/themes/genres were kicked around in early stages until a vision was solidified. Just because it one day BECAME WS, doesn't mean anything at all. It also probably accounts for virtually none of the games product cost beyond the initial equipment purchased and money spent on employees at the time.

    2) Provide proof of employee totals.

    3) Proof of average employee salary (and "ask anyone," is not proof)

    4) Even better, link me to any document showing any game anywhere and any time spent more than 100 million on employees alone.

    I'm gonna have to say I have my doubts that Wildstar is the most expensive development project ever, as you have said. Im guessing less than TOR, probably more than GW2. 

    Furthermore, MMOs are long term projects and no one expects to recoup the full cost of development in 2 months. "Ask anyone"

    Does it really matter how far or close to $100M he is? He said it's a conservative estimate. Or do you believe WS was an inexpensive game to develop? His point is that the game is not returning what was expected. I believe that to be true, and given NC's history with sub-par performing games, people involved in WS have reason to be concerned.

  • svandysvandy Member UncommonPosts: 277
    Originally posted by GeezerGamer

    Does it really matter how far or close to $100M he is? He said it's a conservative estimate. Or do you believe WS was an inexpensive game to develop? His point is that the game is not returning what was expected. I believe that to be true, and given NC's history with sub-par performing games, people involved in WS have reason to be concerned.

    My concern isn't his idea, its the fact that he is supporting it with literally ZERO data, and claiming it to be factual. We don't know what Carbine's target numbers were, we don't know what they spent to make the game, and we don't know what plans they may have to increase revenue.

    Instead, we all drone on about the game failing, yada yada, while we all gaze into the future with EQN and other such titles. Just like GW2 was proclaimed DoA by many and it was all about ESO. Then ESO was DoA and it was all about WS. Yet somehow every one of those games mentioned is still alive and well . It's the nature of the MMO community to just constantly abandon everything.

    WS will have a small, dedicated, niche community just like Rift, TOR, and other such titles and it will eventually recover costs. If we were talking about call of duty not moving enough boxes to recover costs in a few months, that would be a different story, but this is an MMO and the rules are a little different.

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  • SevenTimesSevenTimes Member CommonPosts: 2

    Where is the actual math you did? You literally just keep saying "trust me this is not speculating," and then you speculate. If you were NOT speculating, you would have:

    1) Provide a document that proves (or easily verifies as you sat)  Wildstar was in production from the day Carbine was formed, as opposed to the more likely scenario which is multiple games/themes/genres were kicked around in early stages until a vision was solidified. Just because it one day BECAME WS, doesn't mean anything at all. It also probably accounts for virtually none of the games product cost beyond the initial equipment purchased and money spent on employees at the time.

    2) Provide proof of employee totals.

    3) Proof of average employee salary (and "ask anyone," is not proof)

    4) Even better, link me to any document showing any game anywhere and any time spent more than 100 million on employees alone.

    I'm gonna have to say I have my doubts that Wildstar is the most expensive development project ever, as you have said. Im guessing less than TOR, probably more than GW2. 

    Furthermore, MMOs are long term projects and no one expects to recoup the full cost of development in 2 months. "Ask anyone"

    Well, I am not trying to do all of the legwork for you. At some point, as an individual, I assume you can look up things on the internet. It seems to me, and I could be wrong, the only rationale you will accept is if T.J. Kim were to come show you the figures on his laptop.

    In all fairness, my comment on speculation was about certain business knowledge that almost anyone in business knows, or can be easily verified on the internet. I guess I can understand you being dubious. People can say anything on the internet after all. However, this isn't religion. Whether you choose to "believe" it or not, doesn't impact the truth of my assertions.

    (1) The studio who started in Orange County has had to spend money until the release of Wildstar. They have had no other products. This studio has been around since at least 2005. Unless you misunderstand the very basics of business, you understand every cost is attributed to this studio until the release of their first product which happened 9 years after they started. Everything else came out of capital provided by NC Soft. They expect that money back. You can write off losses for tax purposes, but that money is still gone.

    (2) You're right. This is speculation. However, there is a certain amount of knowledge I have regarding game development. TOR is on record for having used over 600 people at one point. This is excluding outsourcing. They used multiple EA studios to get TOR out the door. (Edmonton, Mythic, EALA and Austin.) I'm assuming much less than half those employees for Carbine and Wildstar. You can tear this apart, but again, a little digging will show you how big dev teams are, especially for MMOs.

    http://www.eurogamer.net/articles/2012-03-08-665-people-worked-on-star-wars-the-old-republic

    Over 200 people worked on Warhammer Online.

    Over 200 people still work on WoW.

    (3) I don't know what to tell you about this. You'll either accept my figures as axiomatic or you will not. Let me help:

    Relevant bit: $84K average salary for developers
    Pertinent information from last link: Instead of figuring out each cost component separately you can develop some simple metrics.  For example, one entrepreneur I talked to is in the engineering services business in which his people are billed on projects on a time and materials basis.  The entrepreneur takes the employee’s base salary and multiplies it by 1.25 to cover employment taxes and benefits.  She then multiplies that number by 1.75 to cover rent, equipment etc.  Because some management personnel are needed and some of the employee time is spent in non-billable technology development, she multiplies that number by 1.25.  She figures that for her professional engineering consulting business the fully functioning managed employee costs about 2.7 times the base salary. 
     
     
    If you take average $80K and do what the guy from MIT is telling you you wind up with $216K per employee. Based on my math, this is well over $200 million. That is why I was saying I was being conservative.
     
    (4) You're not going get internal documents from me or, I suspect anyone. Asking for them doesn't disprove my figures or discredit what I am saying. I'm using sound math, sound business reasoning, and yes, even sound science if you like. These things aren't hard to figure out if you are interested. If you just want to turn your head and tell me I bear the burden of proof, without then looking at my math... that's on you. I'm giving you well reasoned and thought out assertions why I am 99% certain the number of $100 million is not only the minimum it cost, but why the total cost of development is likely well more. My speculation is they are lucky if they got out under $200 million.
     
    So, I just want to state again how much I hope Carbine and the team succeed. In no way do I want my figures to defame the hard work they put in. I'm trying to help people here understand what a massive financial undertaking a game like this is, and how it running for as long as it did really did run up the cost. I hope I have better explained how I was being conservative, and how you don't have to be an "insider" to use math and business to prove assertions. (FYI - That's how a lot of science is done.) No, I don't know the actual total. But I fear if we all knew that total, we'd all really freak out.
  • GeezerGamerGeezerGamer Member EpicPosts: 8,855
    Originally posted by svandy
    Originally posted by GeezerGamer

    Does it really matter how far or close to $100M he is? He said it's a conservative estimate. Or do you believe WS was an inexpensive game to develop? His point is that the game is not returning what was expected. I believe that to be true, and given NC's history with sub-par performing games, people involved in WS have reason to be concerned.

    My concern isn't his idea, its the fact that he is supporting it with literally ZERO data, and claiming it to be factual. We don't know what Carbine's target numbers were, we don't know what they spent to make the game, and we don't know what plans they may have to increase revenue.

    Instead, we all drone on about the game failing, yada yada, while we all gaze into the future with EQN and other such titles. Just like GW2 was proclaimed DoA by many and it was all about ESO. Then ESO was DoA and it was all about WS. Yet somehow every one of those games mentioned is still alive and well . It's the nature of the MMO community to just constantly abandon everything.

    WS will have a small, dedicated, niche community just like Rift, TOR, and other such titles and it will eventually recover costs. If we were talking about call of duty not moving enough boxes to recover costs in a few months, that would be a different story, but this is an MMO and the rules are a little different.

    If Carbine was it's own company, I'd not argue this. But this is NCSoft. The highlighted statement above is historically NOT what NCSoft wants. It sucks if you like the game, but unless there is a radical change with WS that can pull in more numbers, I wouldn't want to bet on the game being around for many years.

    I'm not discounting a turn around in the same way that TOR was turned around either, but I think it will take something like that to keep this game moving in any direction.

  • grimalgrimal Member UncommonPosts: 2,935
    Originally posted by GeezerGamer

    If Carbine was it's own company, I'd not argue this. But this is NCSoft. The highlighted statement above is historically NOT what NCSoft wants. It sucks if you like the game, but unless there is a radical change with WS that can pull in more numbers, I wouldn't want to bet on the game being around for many years.

    I'm not discounting a turn around in the same way that TOR was turned around either, but I think it will take something like that to keep this game moving in any direction.

    I agree.  I hope they had F2P plans in advance.

  • doodphacedoodphace Member UncommonPosts: 1,858
    Originally posted by svandy
    Originally posted by GeezerGamer

    Does it really matter how far or close to $100M he is? He said it's a conservative estimate. Or do you believe WS was an inexpensive game to develop? His point is that the game is not returning what was expected. I believe that to be true, and given NC's history with sub-par performing games, people involved in WS have reason to be concerned.

    My concern isn't his idea, its the fact that he is supporting it with literally ZERO data, and claiming it to be factual. We don't know what Carbine's target numbers were, we don't know what they spent to make the game, and we don't know what plans they may have to increase revenue.

    Instead, we all drone on about the game failing, yada yada, while we all gaze into the future with EQN and other such titles. Just like GW2 was proclaimed DoA by many and it was all about ESO. Then ESO was DoA and it was all about WS. Yet somehow every one of those games mentioned is still alive and well . It's the nature of the MMO community to just constantly abandon everything.

    WS will have a small, dedicated, niche community just like Rift, TOR, and other such titles and it will eventually recover costs. If we were talking about call of duty not moving enough boxes to recover costs in a few months, that would be a different story, but this is an MMO and the rules are a little different.

    Did you just say that TOR has a small, niche community? Im sure if WS had a "small niche community" of over 1 million players a month like TOR does, then it will be in very good shape.

  • AmbrosiaAmorAmbrosiaAmor Member Posts: 915
    Originally posted by grimal
    Originally posted by GeezerGamer

    If Carbine was it's own company, I'd not argue this. But this is NCSoft. The highlighted statement above is historically NOT what NCSoft wants.

    I'm not discounting a turn around in the same way that TOR was turned around either, but I think it will take something like that to keep this game moving in any direction.

    I agree.  I hope they had F2P plans in advance.

     

    Yeah there is no doubt about this. Every single NCSOFT game that started out using the P2P business model switched over to F2P here in the west. The question is how fast they will do it. Considering that you can search populations by using the alphabet letters; it seems that some servers are down to 100 or less during primetime. Carbine is allowing (since yesterday) to have an official thread up regarding server population issues. They will most likely announce a server merge before going F2P, unless things are extremely dire in which case they might announce both.

     

    Oh and I completely agree with Geezer... this is not what NCSOFT wants to be at this stage of the game with Wildstar.

    image

  • Beatnik59Beatnik59 Member UncommonPosts: 2,413
    I heard WildStar churns faster than an Amish housewife.  Is that true?

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  • sonicwhip2sonicwhip2 Member Posts: 86
    I think it is imminent that we will see both Wildstar and TESO becoming F2P soon.
  • bcbullybcbully Member EpicPosts: 11,838
    Originally posted by DMKano
    Originally posted by sonicwhip2
    I think  we will see Wildstar becoming F2P.

    Fixed it for you.

    Made it on topic and took out the guess work.

    "We see fundamentals and we ape in"
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