Author Topic: Potential argument to investors  (Read 2821 times)

Chaos Ex Machina

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Potential argument to investors
« on: September 07, 2012, 06:37:25 PM »
Getting investors to pay development or relaunch of a MMO that just got shuttered by another company can be a hard search.  Even if the game was generally in the black, it trended less despite a free conversion.

However, honestly, the free conversion was handled in a terrible manner, and I wonder, should we bring this up as proof the game has a higher profit potential than NCSoft got, or not, to avoid any negativity?

In particular I cite the chat and team restrictions on trial, and free, accounts, which made it impossible to get into the community or pugging without a lot of assistance from a veteran, the fact its market interface development was handled by a not very competent 3rd party, killing impulse buys, or the huge library of costume pieces players got free as a potential source of additional monetization. 

Definitely, any additional ways monetization can be achieved should be brainstormed and possibly brought up.  Though I think that how loyal the customer base was - really, attracting new people was always the challenge not retaining veterans - is potentially important, along with perhaps the unusual gender parity among mmos and other reasons this was a non-standard audience who often included a lot of console or single player people instead of MMO fans.  MMOs are considered a bad genre and social/creativity games are hot.  The real reason a community is fighting here is because of the support offered to creativity and socialization and that may deserve investment.
« Last Edit: September 07, 2012, 06:48:46 PM by Chaos Ex Machina »

dwturducken

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Re: Potential argument to investors
« Reply #1 on: September 07, 2012, 07:13:33 PM »
All of the flaws in the system are valid, but most of the restrictions placed on free players in this game were present in the others.  With the exception of WoW, I believe I've tried all the ones that have gone F2P. (Not sure if SWToR is, yet, and frankly don't care, WRT this discussion.) CoH still offered the best player experience and options for the free player of all of the games.  My pay account still has many items locked because I haven't bought them, yet, but some of them I just haven't wanted.  I wasn't as interested in the steampunk costume pieces as the rest of my group, but we all dove into the retro-scifi set.  That sort of thing.  One thing we all wanted to see was a costume set of improvised pieces, a la Blankman, but that's a discussion for another thread.

Point is, yes, the deployment of free to play was weak and flawed, but it still gave the free players more than any other game out there did, and the underlying system, though dated, was still better.
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Sister Leortha

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Re: Potential argument to investors
« Reply #2 on: September 07, 2012, 08:29:08 PM »
The chat limitations on free/trial accounts were initially put into place because such features were being badly abused by the real money spammers.  Any plan to ease those limitations will need to include alternative solutions for the spam issue that would quickly resurface if free/trial/throwaway accounts could be used to message anyone.  There's not much use in allowing such chat to the occasional legitimate free user if 99% of the time it'll be used for spamming.

I don't have a better solution to offer, but just wanted to make sure that any discussion included the key reason such limitations were enacted in the first place.

Chamomile

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Re: Potential argument to investors
« Reply #3 on: September 07, 2012, 08:54:22 PM »
Also worth noting that the switch to F2P caused a significant rise in profits.  So F2P is clearly the way to go in general, which is nice.

The sell to investors needs to run the pitch that CoX suffers from a lack of marketing.  Which it totally does.  There is an enormous market for MMORPGs in general, and CoX's non-fantasy genre means that it doesn't have to compete with the unstoppable juggernaut that is WoW.  Further, that genre is not the niche that it was in mid-2004.  That was back when Spider-Man and X-Men were basically the only super hero movies anybody cared about and there was a serious impediment to getting super heroes as a general rule sold to general audiences.  That is no longer how the world works.  The Dark Knight and the Avengers have added themselves to the super hero canon and the Avengers mythos in particular, with its cast of line-up of four separate franchises colliding with one another, has proven that people are totally willing to churn out in massive numbers to watch a movie about super heroes they've barely heard of before.  The market for a good super hero game has never been better, and yet CoX was persistently unwilling to launch any kind of significant ad campaign during all this (likely because its profits were trending downwards and they didn't want to take the risk of killing the game early with a costly ad campaign if it didn't end up working).

Chaos Ex Machina

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Re: Potential argument to investors
« Reply #4 on: September 07, 2012, 10:15:57 PM »
There are much better ways to block spam, especially since spammers had no restrictions in the chat channel, but if the standard industry practice is similar, that may not convince investors particularly.

Marketing is expensive and probably beyond the means of any investors we could get.

I think the best is probably a social/creative pitch, considering how popular such are with investors now.

Victoria Victrix

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Re: Potential argument to investors
« Reply #5 on: September 09, 2012, 09:19:25 PM »
First off, this post is NOT meant to discourage you guys.  Just remember we have to deal in facts as well as hope.

Larry did some fact-checking and money-tracing (he's the brains of our operation, I just do the heavy-word-lifting).  This is what he found.

"The essence of it all appears to be as simple as this: NCsoft is owned by Nexon Co. Ltd., and Nexon has a record of only being interested in what benefits Asian gamers, and last quarter, their push was heavy East and EU.

Paragon Studios employed 80 people.  Nexon employs 3,400.  City made $800k clear profit a month.  Nexon's quarterly was $242 million, and their latest 1 of 60 MMOs registered 3 million players in China last month.  Nexon has been at a steady $1.1 to $1.2 billion dollar company for 3 years.

As big as CoH has been to us, City wasn't even a blip seen from Tokyo and Seoul.  Someone 5,000 miles away (who likely never played any game the corporation owns---and even their largest shareholder only has a 21 percent share) said "reduce North American assets," and this happened.  And with a billion people in China as a market for Nexon's free-to-play/micropayment 2D MMOs versus a highly-technical American-based 3D MMO, they saw no reason to bother (or, really, even take notice)."

This is actually something we can parlay.  I mean, hello?  $800k PROFIT PER MONTH with an 80 person staff?  That sounds like a THRIVING small business to me!  This is something worth investing in!  If any of you actually write on small business blogs, this story would be worth starting over there--giant asian firm DUMPS profit-making business.  This could get any potential investor worth his salt salivating.
« Last Edit: September 09, 2012, 11:03:19 PM by Victoria Victrix »
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Mister Bison

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Re: Potential argument to investors
« Reply #6 on: September 09, 2012, 09:28:38 PM »
This is great news miss !

But as a slight nitpick, won't the blunt businessman here say: "where are your proofs ?"

What you say makes this a closed case for me: now we know the breaking point, apply enough pressure on Nexxon, and they'll concede. They definitely CAN'T hold onto their position of burying the game for no reason. Would there be a new game in the franchise, I wouldn't be so sure City would last much longer, but no replacement, and no loss, means they just chose to close instead of letting go, and that's going to stain their reputation.

We've got to get official word on this, I mean, Seal Of NCSoft on it, +400000$ last year. They just shot the smallest puppy of their, and that's horrible.
Yeeessss....

castorcorvus

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Re: Potential argument to investors
« Reply #7 on: September 09, 2012, 09:29:32 PM »
I see the above post as good news. It means we have hard numbers proving not only the profits to be had for the next company to buy Paragon (there will be) but it also shows the utter disinterest that NCsoft has in keeping the rights. I'd count this as a very good sign - the folks over at NCsoft just don't know anything about business it seems lol.

Mister Bison

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Re: Potential argument to investors
« Reply #8 on: September 09, 2012, 09:33:55 PM »
I see the above post as good news. It means we have hard numbers proving not only the profits to be had for the next company to buy Paragon (there will be) but it also shows the utter disinterest that NCsoft has in keeping the rights. I'd count this as a very good sign - the folks over at NCsoft just don't know anything about business it seems lol.
Yes and no. Let's say they already had 59 games totally korean-appealing, but on their official site, when listing all their games, they have "Zity of ero, nya?" (<- bad korean), it makes sense to get rid of City.

What totally doesn't make sense, is how they dropped the baby. I suggest problems with the license. "We only have half a license !" so they did not know how to handle that.

We totally have to get serious lawyers on that, and get our hands on the contract between Cryptic and NCSoft/Paragon Studios.
Yeeessss....

castorcorvus

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Re: Potential argument to investors
« Reply #9 on: September 09, 2012, 09:36:57 PM »
We totally have to get serious lawyers on that, and get our hands on the contract between Cryptic and NCSoft/Paragon Studios.

I was mostly poking fun, but I do agree that we need to see what the official agreements are. Olantern's legal thread might be a good thing for us to keep tabs on.

Mister Bison

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Re: Potential argument to investors
« Reply #10 on: September 09, 2012, 09:41:29 PM »
Oh and I didn't mean we already didn't have serious lawyers on that, I instead wanted to to say we seriously need lawyers on that, my mistake.
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Chaos Ex Machina

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Re: Potential argument to investors
« Reply #11 on: September 09, 2012, 09:49:39 PM »
That is potentially great if you can find a decent proof!  If Nexon is definitely the factor here it may be possible to convince them to let another buy it.

Victoria Victrix

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Re: Potential argument to investors
« Reply #12 on: September 09, 2012, 11:04:50 PM »
The information is ALL publicly available if you search deep enough for it, usually in dull online business zines and blogs.

Trust me, it's going to go into the right hands.  On OUR end, we need to get the interest of some venture capitalists.
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Olantern

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Re: Potential argument to investors
« Reply #13 on: September 09, 2012, 11:51:06 PM »
Oh and I didn't mean we already didn't have serious lawyers on that, I instead wanted to to say we seriously need lawyers on that, my mistake.

I am in no way serious.  Especially not by the standards of tax lawyers.   ;)

Now that someone has done the hard work of digging up some of the numbers involved, Ms. Lackey is exactly right.  The next step is to get someone interested in purchasing this thing.  There's been interest in the Legal Considerations thread about forming some kind of player entity to do so, but that's also fraught with peril.  I suspect that a crowdfunding effort of some kind can raise one or two million dollars, but not the ten or twelve million that might be needed.  Further, we have neither the necessary expertise in online publishing nor, potentially, the time to gain it.  We are (for the most part) not business people.  I've done a fair amount of bankruptcy work (and taught Bankruptcy), and I've seen a lot of fledgeling businesses perish trying to accomplish something like this.  That's not to say it's impossible, but it is the greatest challenge most of us have likely faced in our financial lives.

The easier route is to interest either an existing games publisher or a venture capitalist in making the purchase.  The return on CoH as an investment, at least as it's currently operating, is excellent.  We need to get the information involved into the hands of people who might be interested in using it.  That means writing to business organizations, writing to game publishers, and using any personal connections any of us have.

It might be worthwhile to start gathering information on such contacts and pooling them in a central location.

Contrary to what one reads in the AE forum, we have plenty of excellent writers in this community.  It's time to put those skills to work.

I think I'll cross-post this in the Legal Considerations thread.

Mantic

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Re: Potential argument to investors
« Reply #14 on: September 10, 2012, 07:36:31 AM »
Completely agree it's better to point out that the game was profitable to the end. And that there are ways of taking advantage of that which would not necessarily require a lot of technical or personnel investment, such as public server licensing.

Not that such speculation has any value, but if there was a second quarter drop, perhaps it was related to not repeating the "loyalty program" reward system for subscriptions on top of f2p income that was active in the first quarter (anecdotal experience of dropped subs already had me thinking this was a mistake, though I thought surely Paragon had plenty of slack on the issue). I believe the hybrid model was a good choice, but perhaps subscriptions were not being promoted as much as they could have been.