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General: Cryptic's Future Unclear
SBFord
Former Associate EditorMember LegendaryPosts: 33,129
In today's Free Zone column, MMORPG.com's Richard Aihoshi takes a look at the big news out of last week, namely the placement of Cryptic Studios on the auction block by publishing giant, Atari. Richard has a few thoughts to share on the future of Cryptic Studios. Check it out!
As I’ve noted within the past few months, Chinese giant Tencent has already signalled its interest in this hemisphere by laying out over $400 million to complete its acquisition of Riot Games, in which it previously held a small share. It’s still far too early to gauge whether that constituted over-paying, and if so, by how much. However, we do know the company still has a substantial war chest. Although I have little more than gut feel to go on, I’d have to suspect Atari would be willing to accept substantially less. So affordability probably isn’t an issue.
Read more of Richard Aihoshi's The Free Zone: Cryptic's Future Unclear.
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Comments
Given that they aren't currently profitable... I'm guessing around $50 million, tops.
Not sure I'd want a Chinese company to pick them up though, whilst I have the up most respect for the ones you mentioned, I just fear what they might do to the games to make them more compatible for the Chinese market.
OK so the games they have right now are not the most popular, but there is some potential given there big IP. I'm going to say over at 225.
Honestly asking players about this is probably not a good idea as most have been burned by Cryptic. Either as a dissapointing "sequel" of CoX in the form of Champions Online and a very dissapointing Star Trek game in the form of STO.
Frankly I think most people would just want Cryptic to go away and a reputable company do both these IPs justice by creating real MMOs from them rather than super-instanced ones.
My gaming blog
Ah, but you do not know that they are not profitable. Bad assumption on your part. Hard to know anything with Atari's accounting shenanigans.
That part ^ *nod*
The shame is the games have improved so drastically since they first launched. Unfortunately that's not enough, because the improved versions that exist today are realistically how they should have launched in the first place. Too many people were burned, and no one has faith in Cryptic anymore. It'd take something HUGE for anyone to believe in that company anymore, regardless of who acquires it. Frankly I wonder if anyone is really willing to take the risk.
I wouldn't be surprised if they fell off the radar entirely, or ended up one of those f2p companies no one really likes or cares about. Like Aeria.
"Forums aren't for intelligent discussion; they're for blow-hards with unwavering opinions."
Given that China is looking to drop it's US dollar reseves , thye've been on a sort of spending spree the last year and a half. Cryptic would be the lucky recipient of a bailout of sorts if this happens. However if they are purchased they would suffer some significant changes internally and would more then likely have their operations moved. It would probably keep the games they have now operationg , but at what long term price ? Banks are not lending , still , so independance is not an option for Cryptic. Other companies are not going to risk cash reserves on a company with diminishing returns and no games on the horizon. Even with a quality boost as some claim, CO nad STO have such a small footprint in the market , as to make them barely noticable. NWN without Atari's lisense will not happen.
A) What does that have to do with the gaming?
You interconnect two totally unrelated subjects.
IMHO, Cryptic is on barrowed time, maybe I'm wrong. It's Atari's call on how long they will endure the loss operation now that the cat is out of the bag.
I just wish the company would go away. You screwed over your customer base too many times. Putting lipstick on a pig won't change that whomever buys them.
That being said I wish CBS would sell the Star Trek rights to a real company and Champions would just be shut down. As for the Neverwinter game I don't hold much hope for quality. I really wish Atari would sell the rights to D&D to a huge studio like EA/Bioware and they do a real Forgotten Realms MMO set in 3.5 and not that 4.0 horsecrap.
Buying an assest and getting rid of cash. Although the assest intself is not such a great investment , although if you consider the engine something worth while. China is hedging and would rather have tangible assets then banks full of US currency. China continues to rid itself of dollars at a rate that won't panic the markets , but lower it's risk to fuluctation in currency values.
I hope this unclear future means defunct
Atari's announcement was quite clear in that "Cryptic" made a loss in the last two financial years. I don't doubt they bring in a fair revenue, but they currently have development costs still to pay off from CO & STO and they are funding Neverwinter. At this time Cryptic are not profitable, but after the sale I'm sure with all that debt wiped out they will be fairly healthy and probably turn a tidy profit from their titles. Until that debt is wiped out though, they operate at loss which reduces their market value.
Besides, there is no way that the company is worth more now than what they've previously invested in the development of their two MMOs. For companies making profit each year, yes they are worth more than the money they've had invested, but loss making companies are not.
I don't know exactly what info source you are drawing from but China is not / can not "rid itself" of the U.S. dollar. Their currency is pegged to it and they are in fact buying more. They have no where to get rid of it too and nothing stable / strong enough to replace it with. The EU is in no better shape and in the big picture, is a much less stable currency as the EU itself is having massive financial issues as well. The U.S. dollar is still the world currency of choice. We are creeping out of recession not rapture. But that is totally beyond the scope of this post and off topic so I am sorry for taking it there.
On topic, like I said - Crypic is around only as long as Atari is willing to pay the loss. The amount of money they have lost will keep away any investors.
Enjoy Star Trek and Champions while they last.
Look at it like this - If you had the money (millions of dollars) would you buy Cryptic? Before you answer consider carefully the fact they lost 7.5 million in the last year and about 17 million the year before. Would you be confident you could show a profit in a year or less?
I wouldn't know which is the currency of choice but after reading the quoted part of your post i got a little curious and came across this list which places the US dollar way down the bottom in terms of worth http://en.wikipedia.org/wiki/Highest-valued_currency_unit. I post it not for arguements sake but merely as i found it interesting.
The biggest problem with this company is that neither of their mmos have a lot to offer in the long term and have been bled dry far as short term profitability goes. Not to mention how any further development would work on these games which one has to wonder who would even want to commit to it considering how lackluster these games are already doing. I would think the lack of long term profit potential and no real items in place for customer growth and sustainability would be a much greater concern than the negative pr the company has for most companies considering purchasing Cryptic.
There simply isn't a lot there for a company to work with which is a shame considering the ips. Really is one of the more amazing fuckups I've seen. I mean STO should have been a guaranteed gold mine for them if tthey would have put forth the effort.
1. For god's sake mmo gamers, enough with the analogies. They're unnecessary and your comparisons are terrible, dissimilar, and illogical.
2. To posters feeling the need to state how f2p really isn't f2p: Players understand the concept. You aren't privy to some secret the rest are missing. You're embarrassing yourself.
3. Yes, Cpt. Obvious, we're not industry experts. Now run along and let the big people use the forums for their purpose.
If I had to choose one word to describe Cyptic, it would be "lazy."
Joined - July 2004
OP, since we are wagering internet pennies I will bet Cryptic sells for less that $125 million US, if it sells as a whole company at all. No matter how you try to spin the figures the simple truth is that Cryptic has lost a “substantial” amount of money over the past three or four years. They are simply not profitable and smaller development deficits aside, they’ve yet to return profit “on any investment.”
Would you buy the company considering?
One question in my mind right now is, would Atari sell off assets from Cryptic Studios piece mail? The two licenses held might net interest for companies looking to make their own MMO games. Their design software package, supposedly able to churn out AAA MMO’s in a couple of years might net interest from some casual game providers. Yet, it’s that very package, with its limitations, that churns out content so formulaic that fans want to call the company lazy.
That’s all I see of immediate value.
I can’t include an unfinished game such as NWN as a sell worthy asset based on unknown associated costs yet to be paid.
The MMO games themselves… They’d need a gaming service set up like the Sony Station or the others to hang on. There future iscurrently uncertain. Enjoy them if/ while you can.
Very few companies want to put the real work into making an MMO but they want the benefits of operating one. Companies like Cryptic (and the number is growing) have found it far easier to make console type games into multiplayer games put them on line and cal them MMO's. Nobody is willing to pay a sub for em so they wither and die or they slot them in as F2P and try to juke people out of money in the item mall. Or they introduce them from day one as F2P to avoid the embarrassing coversion process.
Well said.
"In addition to the properties mentioned before, both with presumably limited potential, there’s Neverwinter Nights."
I don't think NWN can be part of any sale; remember that Hasbro is still suing to revoke Atari's D&D license, mostly because Atari sold off its European distribution organization to Namco Bandai (Hasbro's main competitor, and agaonst the licensing agreement). Other than that though an Asian company makes as much sense as anyone else, especially since CO is now one of those freemium games, and STO has been basically set up that way since launch. Other than name recognition, Jack Emmert isn't really a selling point; whoever buys Cryptic (if anyone even does) would do well do put someone else in the CEO slot.
As for how much Cryptic would sell for? I am guessing somewhere between $20-50 million (what Atari still owes to BlueBay for Cryptic and what Atari spent acquiring Cryptic and propping them up, respectively).
"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
Once again, yes we do know that Cryptic was not profitable (i.e., when everything was tallied it LOST money); in the process of divesting itself of Cryptic, Atari has had to list Cryptic's monetary situation seperately from the rest of Atari's online revenue. There's no financial trickery at work here; Cryptic's last two fiscal years are listed with how much money they made, and how much money they lost. Hate Atari all you want, but for the first time Atari is required by French law to show Cryptic's financial numbers; trickery isn't allowed in this case, as they have to show the actual revenue numbers as part of the divestment process.
"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
Atari can't sell the license, since Hasbro owns the D&D IP; Atari can only relinquish their license to allow another company to negotiate with Hasbro for it. Since mediation in Habsro's lawsuit so far has failed, and the lawsuit continues, I wouldn't count on Atari letting the license out of their grasp anytime soon.
"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
Things to never do in the gaming industry.
1. Never accept License from anyone, unless you are willing to screw over your customers, get a bad name for yourself, and know that they can take it back from you at any time they please.
2. Champions Online is a failure because of the strict F2P limits that Cryptic puts into the game, strict customizations, and outdated Character Models that this game uses which they will not update, and boring quests which are not simple although if you are goning to play a Heroes game like City OF Heroes I would just pick up Champions Online because COH sucks as NC soft never updates anything and it looks worse than Champions online yet NC Soft is P2P and they make you pay for additional things which is crap and should be free.
3. Star Trek Online, I bought the game and it was good for awhile but after leveling up to a decent ammount I will say that this game has good graphics, and could have been a really great game, but the way that Cryptic has designed the Items Shop on top of Pay 2 Play, I will no longer be playing STO because of their failure to put in Unique Customizations for characters, and their failure to get players into the game.
You know STO would have more players if it were designed more like Star Trek Elite Force 2 which was designed in 2002 I think it was and I just recently played that game from a friend for free, and it was a lot better than Star Trek online based on the fact that STO was made way after 2002, and it was a failure because there was no multi player games no pvp no action just boredom.
Cryptic Should have done things right should I say, Micro Transactions are not always the best way to go, and if you are going to use them Use them to make a small profit and enough to cover your game and your work but don't go get too greedy because in the end all that money goes down the drain.
I say the companies going to be fairly exppensive mainly becuase of the cryptic engine, which is basically allows them to cut game production time in half(takes out Programinng, mostly), Sar trek Online has some worth, it just needs some time and replanning to get better. Foundary looks cool. If a good company (non-Chinese hopefully) buys them, they could be making some of the best games but, for now we're stuck with the old CoX , Failure F2P Champions Online, and the nice but bad planned STO.
Just a thought. If Atari thinks this lawsuit is not going their way, that they will lose the license, then Cryptic isn't worth that much to them anymore. I mean they'd be working on an MMO they can't release w/o the license right? Maybe Atari knows something the rest of the world really doesn't since gaming and journalism is an oxymoron... aka, they won't be sniffing out this info on their own.
parrotpholk-Because we all know the miracle patch fairy shows up the night before release and sprinkles magic dust on the server to make it allllll better.
I really don't think this move is going to affect anything, its just a smart move by Atari.
They want to focus on mobile gaming, Cryptic does not make mobile games.
They are still a bit in debt, selling off Cryptic will get them a nice insta-chunk of cash that will put them in the positive again.
Also, in my eyes Atari is not a good publisher, so getting a new one will help out STO and CO hopefully (unless they suck more than Atari).
Furthermore, both STO and CO are making money so there is no reason to think no one would want them. CO in particular is making leagues more than it used to. I personally play it and we've gotten a big update a month for the past two months and theres two more planned for the next two. Also gotten CStore items every week, but they're not game breaking and some are actually pretty cool (I'm still waiting for teddy bear transform).
This doom and gloom talk is pretty upsetting and a bit offensive for someone who has enjoyed CO since release and played STO for a year. Go to either offical forum and they are booming. I expected better from you mmorpg.com, stop trying to feed the trolls.