Author Topic: $800k/month profit? I think you mean revenue?  (Read 21103 times)

RogerWilco

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$800k/month profit? I think you mean revenue?
« on: September 25, 2012, 11:20:30 AM »
I have a question for VV/ML based on the two posts below. I've seen this number of $800k/month profit that you mention being used in all kinds of discussions. For example this one: http://boards.cityofheroes.com/showthread.php?t=297559

I think this number cannot be the profit, but instead seems to be the revenue. I think it' important to clear this up, because misinformation isn't going to help us make our case to potential investors. The numbers I have to go on are the NCsoft Earnings Releases: http://global.ncsoft.com/global/ir/earnings.aspx
The "Game Sales" in the Consolidated FactSheet clearly states a revenue of about 2800 million won per quarter, or roughly 2.5 million dollar. This number is within a few percent of the $800k/month that you mention.

Unless the entire Paragon Studio staff was working for free, I can only assume that the profit was much less, unless you have numbers I don't have access to.

I know that in the Netherlands, where I live, it takes just over a million euros to run a software company of 22 people. Extrapolating from that, including server and bandwidth and the overhead a larger organisation has, it would take about 8 million dollar to run Paragon Studios, except that Silicon Valley is probably more expensive than over here. So it's much more likely that PS was running somewhere in the 10 million/year range, or about breaking even. Granted, not everyone at PS was working on CoH, so the game itself was probably running at a profit, but can't see the quoted number being anything but the revenue.

Thank you if you could clarify this.

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.
I don't know where Larry got his numbers, but I am confident they are solid, given that Melissa "War Witch" Bianco told me on the day of the shutdown that "We were doing WELL!"

billymailman

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Re: $800k/month profit? I think you mean revenue?
« Reply #1 on: September 25, 2012, 01:08:25 PM »
The "Game Sales" in the Consolidated FactSheet clearly states...

Does that include Paragon Points? Because something like "Game Sales" suggests to me that it's only the direct subscriptions, meaning you might be leaving out a large chunk of revenue.

Segev

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Re: $800k/month profit? I think you mean revenue?
« Reply #2 on: September 25, 2012, 01:21:54 PM »
Honestly? Even if that's "revenue" and not "profit," $800k a month is a lot of money. It translates to $9.6 million/year.

If we assume most employees are earning in the $75k/year range, with maybe a fourth (and that's assuming heavy bureaucracy) earning an average of twice as much, we have an effective 100 employees at $75k/year, for $7.5 million/year in employee salaries. I will note that $75k/year is firmly middle class for a family; it's approaching upper class lifestyle (if not necessarily super-wealthy) for single people. I don't know Paragon Studios's employee roster and have no clue how accurate this figure is.

That leaves, after this generous employee salary package, $2.1 million/year for operating costs and whatever profits are left over. Office space in Mountain View, CA seems to run at about $300/square foot. I will assume that's per year, though I could be wrong. If it's per month, then my very rough numbers show an unprofitable company if we assume $800k/month is gross, not profit.

However, I hope this at least gives some very rough ideas on what the numbers might translate to. Given that they were supposedly profitable, $800k/month was either plenty of revenue, or was, in fact, profit.

RogerWilco

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Re: $800k/month profit? I think you mean revenue?
« Reply #3 on: September 25, 2012, 02:48:54 PM »
Does that include Paragon Points? Because something like "Game Sales" suggests to me that it's only the direct subscriptions, meaning you might be leaving out a large chunk of revenue.
You can look at the spreadsheet yourself. Unlike all the rumours, these numbers are cold hard facts. As far as I can see, this is total revenue. The table is labelled "Consolidated Sales Breakdown by Game (Excluding Royalties)". The total for all games adds up to the totals for "Sales from online games" and "sales from merchandize" in their Consolidated Income Statement.

But don't take my word for it, look it up.

downix

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Re: $800k/month profit? I think you mean revenue?
« Reply #4 on: September 25, 2012, 04:19:15 PM »
Honestly? Even if that's "revenue" and not "profit," $800k a month is a lot of money. It translates to $9.6 million/year.

If we assume most employees are earning in the $75k/year range, with maybe a fourth (and that's assuming heavy bureaucracy) earning an average of twice as much, we have an effective 100 employees at $75k/year, for $7.5 million/year in employee salaries. I will note that $75k/year is firmly middle class for a family; it's approaching upper class lifestyle (if not necessarily super-wealthy) for single people. I don't know Paragon Studios's employee roster and have no clue how accurate this figure is.

That leaves, after this generous employee salary package, $2.1 million/year for operating costs and whatever profits are left over. Office space in Mountain View, CA seems to run at about $300/square foot. I will assume that's per year, though I could be wrong. If it's per month, then my very rough numbers show an unprofitable company if we assume $800k/month is gross, not profit.

However, I hope this at least gives some very rough ideas on what the numbers might translate to. Given that they were supposedly profitable, $800k/month was either plenty of revenue, or was, in fact, profit.
That is per year.

Now, remember, Paragon Studios was working on more than just CoH. Most of those employees were unrelated to City of Heroes.

So, now we cut, let's say half of those unrelated employees. Your annual costs drop like a rock, yes? If it was profit concern, CoH has been operated by as few as 15 staffers and *still* was updated. You cut down staff to minimum, move to smaller office, put CoH into a long-term maintenance mode like GW, congradulations, you're pulling in a solid $5 mil year net.

Chaos Ex Machina

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Re: $800k/month profit? I think you mean revenue?
« Reply #5 on: September 25, 2012, 04:27:30 PM »
I think the emphasis should be how a large number of employees were not related to the game and it can operate with far less.

An additional point can be the potential to increase the profits by employing a better business model.  The F2P conversion actually was not particularly F2P and really got most of the profit from veterans instead of attracting new customers.

downix

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Re: $800k/month profit? I think you mean revenue?
« Reply #6 on: September 25, 2012, 04:59:20 PM »
I think the emphasis should be how a large number of employees were not related to the game and it can operate with far less.

An additional point can be the potential to increase the profits by employing a better business model.  The F2P conversion actually was not particularly F2P and really got most of the profit from veterans instead of attracting new customers.
Indeed. Also the migration did hurt some vet players, I was a bit miffed at how costly it was to unlock my characters again for instance.

I figured out once, for me to unlock everyone I had made would cost me over a year sub.

Segev

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Re: $800k/month profit? I think you mean revenue?
« Reply #7 on: September 25, 2012, 05:55:16 PM »
A lot of opening-up of the f2p model can be done via things like what have been suggested in the in-game advertisements thread. They're revenue streams that cost the players nothing, provided they're done well.

And, if I can get into this the way I want to - the whole reason I'm interested in saving this MMO on a personal note (rather than as a sympathetic fellow human being who hates to see others miserable) - it will gain a new and unique feature that I need an MMO-like environment for which to serve as a proper testbed.

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TheFlea

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Re: $800k/month profit? I think you mean revenue?
« Reply #8 on: September 25, 2012, 06:01:36 PM »
To be honest? This is why we're pushing for other developers or companies to look into CoH. I've seen two surprising recommendations but I don't know if we can push it. Steam - whose F2P model seems sensible and PWI - who's F2P model is amazing. As a former player of CoH told me - they got it right.

And before people say 'But PWI have CO....'

Yes. And how many 'Fantasy' MMOs has NCSoft kept going at the same time? Dungeon Runners, Lineage, Guild Wars. Cornering a market is as viable a tactic as having the strongest in the market.

Keep up the noise folks.

And dear god let's get someone with a sound F2P model.

Segev

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Re: $800k/month profit? I think you mean revenue?
« Reply #9 on: September 25, 2012, 06:03:33 PM »
There have been Marvel/DC crossovers.

Imagine a CO/CoH crossover event.

TheFlea

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Re: $800k/month profit? I think you mean revenue?
« Reply #10 on: September 25, 2012, 06:07:27 PM »
There have been Marvel/DC crossovers.

Imagine a CO/CoH crossover event.

Well, considering how much of CoH started off as background developed from a CO game....


Paindancer

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Re: $800k/month profit? I think you mean revenue?
« Reply #11 on: September 25, 2012, 06:32:32 PM »
I have always assumed this was revenue and not profit.  Most businesses keep their profit margin pretty close to the chest.
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B_L_Angel

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Re: $800k/month profit? I think you mean revenue?
« Reply #12 on: September 25, 2012, 08:59:36 PM »

And dear god let's get someone with a sound F2P model.

Why is f2p a must have ?

This game had a free trial with pretty severe restriction. I managed to hit the wall by the third day and bought the game because I was hooked. If it had of been f2p the way other games are now I might never have paid for it, or paid considerably less.

In terms of our game I can't see what the benefit was.

Segev

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Re: $800k/month profit? I think you mean revenue?
« Reply #13 on: September 25, 2012, 09:12:04 PM »
Free to play opens up other options, like the advertising revenue stream, that subscription services close off due to a sense from players (rightfully, in many cases) that they PAID for it so they should not have to allow for any other revenue source.

It also, if done right, is typically more profitable than subcription-only, because well-done free-to-play microtransactions allow a combination of impulse buying, tipping, and customizable play experience based on your ability and desire to pay. You get the people who would buy a subscription anyway at that level. You get others on a few microtransactions they wouldn't have paid a subscription to access.

Add in in-game advertisements, and the free-to-play model makes every free account a little bit more you can charge for those ads. Or for "store front" or "retail space" in the game. Because it makes a larger audience that is liable to see it.

Rae

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Re: $800k/month profit? I think you mean revenue?
« Reply #14 on: September 25, 2012, 11:24:56 PM »
That is per year.

Now, remember, Paragon Studios was working on more than just CoH. Most of those employees were unrelated to City of Heroes.

So, now we cut, let's say half of those unrelated employees. Your annual costs drop like a rock, yes? If it was profit concern, CoH has been operated by as few as 15 staffers and *still* was updated. You cut down staff to minimum, move to smaller office, put CoH into a long-term maintenance mode like GW, congradulations, you're pulling in a solid $5 mil year net.

Oh. This is awkward. Because paying customers and profit don't mesh with our new direction. We're more about swords. Swords are good.  Who needs a profitable game and loyal customers whrn you have swords?
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TimtheEnchanter

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Re: $800k/month profit? I think you mean revenue?
« Reply #15 on: September 25, 2012, 11:26:55 PM »
Free to play opens up other options, like the advertising revenue stream, that subscription services close off due to a sense from players (rightfully, in many cases) that they PAID for it so they should not have to allow for any other revenue source.

True, but then... Cable TV started out with the same intentions. Pay for access so no commercials. And look how well THAT worked out...  :roll:

Segev

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Re: $800k/month profit? I think you mean revenue?
« Reply #16 on: September 26, 2012, 02:20:12 AM »
I'd agree, except we have a counter-example of it not working in CoH itself. Customers were displeased with ads in-game last time it was tried because they were paying a subscription fee.

Mantic

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Re: $800k/month profit? I think you mean revenue?
« Reply #17 on: September 26, 2012, 03:07:55 AM »
Free to play opens up other options, like the advertising revenue stream, that subscription services close off due to a sense from players (rightfully, in many cases) that they PAID for it so they should not have to allow for any other revenue source.

Tell that to all these cable television stations I pay a premium for...

From my perspective, the hybrid model CoH had going was very good already, with room for improvement. It needed time to build up more of a library of market items, but it was doing well enough to keep me spending quite a lot above my subscription. I have to admit I don't understand the perpetual free player mindset;my way of thinking is that free play should be a form of endless "trial," with enough limits to make subscription worthwhile (perhaps CoH had the wrong limitations... the anti-spam measures were problematic, at least). I also thought it was a terrible mistake not to repeat the "loyalty reward" incentive for maintaining subscriptions on a regular basis. I saw that reward sell subscriptions, and far too often later I saw longtime players using the F2P situation to justify letting subscriptions lapse, rather than as an excuse to throw MORE money at the game (how I saw it).

I'm rambling. In short: I believe subscriptions were a necessary part of maintaining steady CoH profit margins, with or without the market.

Burnt Toast

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Re: $800k/month profit? I think you mean revenue?
« Reply #18 on: September 26, 2012, 03:27:42 AM »
I spent way more with CoH Freedom than I did beforehand; not that I am complaining mind you. It used to be that being F2P meant you were shutting down, but if you look at alot of the MMOs out there - microtransactions are what are helping save them. I personally liked CoH Freedom as it gave me more flexibility and options than before. Things that would have irked me off under the traditional system for example would have been: Beast Mastery, Street Justice, Nature Affinity, and Titan Weapons...just not my cup of team. With Freedom the amount of powers and costumes that they were churning out gave me the ability to pass on the ones I did not like/want :)

Segev

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Re: $800k/month profit? I think you mean revenue?
« Reply #19 on: September 26, 2012, 03:33:31 AM »
Oh, nobody's talking about doing away with subscriptions. Just keeping the free-to-play in place and perhaps seeking to improve it.

RogerWilco

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Re: $800k/month profit? I think you mean revenue?
« Reply #20 on: September 26, 2012, 07:32:39 AM »

My point is specifically about the $800k/month profit number. I see the posts I quoted mentioned a lot as the "proof" that CoH was making this much profit and NCsoft killed a game that was printing them money.

From the publicly available numbers, I suspect strongly that the numbers in VV/ML's post are not profit numbers, but revenue.

I think CoH can be run at a profit, especially with a staff of 20-30 people. I want to avoid that people put this number out there as I think it's wrong. I don't think we have a profit number, and given that some things like bandwidth and server bills we probably shared between all the games hosted in Austin, it might be hard to come up with a detailed number.

Knightslayer

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Re: $800k/month profit? I think you mean revenue?
« Reply #21 on: September 26, 2012, 08:48:33 AM »
I spent way more with CoH Freedom than I did beforehand; not that I am complaining mind you. It used to be that being F2P meant you were shutting down, but if you look at alot of the MMOs out there - microtransactions are what are helping save them. I personally liked CoH Freedom as it gave me more flexibility and options than before.
Yep, same here.

I'm rambling. In short: I believe subscriptions were a necessary part of maintaining steady CoH profit margins, with or without the market.

And there is a reason F2P grew so quickly, pretty much dominating the market as "payment" model - DDO went from being a game that was about to go bankrupt to being one of the biggest moneymakers of that year, triggering the whole rise of the F2P model on the western markets.
Perfect World is a publisher that has nothing but F2P games (AFAIK), and they keep adding new titles to their assortment all the time, Turbine converted their LotRo to F2P shortly after DDO's conversation worked out so well for them.
CoH pretty much needed the F2P conversion for several reasons; 1) Tons of people out there had already tried it and didn't like it, meaning they would be unwilling to hand out more money to see if the game changed. 2) The game's age, lots of people would be unwilling to try a game that old if they had to pay money upfront.
Not to mention... who was it that said the game was flourishing since Freedom's launch, War Witch herself?

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Re: $800k/month profit? I think you mean revenue?
« Reply #22 on: September 26, 2012, 08:51:57 AM »
Yep, same here.

Not to mention... who was it that said the game was flourishing since Freedom's launch, War Witch herself?

Yes, to me personally.  Black Friday, almost her second line of chat to me was a kind of wail I "heard" all the way across the country.  "We were doing so WELL!"
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DrakeGrimm

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Re: $800k/month profit? I think you mean revenue?
« Reply #23 on: September 26, 2012, 09:02:20 AM »
Yes, to me personally.  Black Friday, almost her second line of chat to me was a kind of wail I "heard" all the way across the country.  "We were doing so WELL!"

...yeah. I don't get this one bit. It hurts my brain, from a logic standpoint.
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Mantic

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Re: $800k/month profit? I think you mean revenue?
« Reply #24 on: September 26, 2012, 10:30:04 AM »
CoH pretty much needed the F2P conversion for several reasons; 1) Tons of people out there had already tried it and didn't like it, meaning they would be unwilling to hand out more money to see if the game changed. 2) The game's age, lots of people would be unwilling to try a game that old if they had to pay money upfront.

You quoted me, and you seem to be arguing with me... but were you a Freemium player or were you a VIP who was also buying points?

I believe the subscriptions were needed, and all those players who looked at Freemium, particularly when the "loyalty" program was not repeated, as a way of saving their money last summer possibly cut into CoH profits enough to convince a few distant bean counters that the whole thing was going downhill.

Also, CoH had a free trial before. Looky-loos had their in, already (as many times as they could make free e-mail accounts). Expecting a huge influx of new players with money to blow just because the game was F2P strikes me as unrealistic. New players looking for a free lunch, however, were nice to have as PUG filler.
« Last Edit: September 26, 2012, 10:42:52 AM by Mantic »

RogerWilco

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Re: $800k/month profit? I think you mean revenue?
« Reply #25 on: September 26, 2012, 10:39:19 AM »
Yes, to me personally.  Black Friday, almost her second line of chat to me was a kind of wail I "heard" all the way across the country.  "We were doing so WELL!"

Could you answer the question I pose in this thread. Please.

Hedgefund

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Re: $800k/month profit? I think you mean revenue?
« Reply #26 on: September 26, 2012, 11:58:15 AM »
I'm with Roger 100%.  When I see "Paragon had a profit of 800k USD per month" my first thought is "you  do not understand the most basic financial concepts".  Such as Profit = Revenue - Expenses.  Roger showed definitively that the revenues were ~2.5M USD per quarter, or ~833k per month.  So please, NEVER say the game was making 800k/month, it doesn't help your cause.

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Re: $800k/month profit? I think you mean revenue?
« Reply #27 on: September 26, 2012, 12:17:48 PM »
You quoted me, and you seem to be arguing with me... but were you a Freemium player or were you a VIP who was also buying points?
I've actually been both. (and also a freemium that bought points at some point) Though mostly VIP, I had re-subscribed almost two months before the sunsetting was announced.
And the surge in activity was indeed also a nice benefit of the F2P conversion.
But no, not arguing, just pointing some things out - without actual numbers to show how much the game was making prior to the F2P conversion and afterwards it'd be pretty pointless, and you're entirely entitled to prefer the standard subscription model.
I don't believe however that staying subscription based would've averted the current situation.

Segev

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Re: $800k/month profit? I think you mean revenue?
« Reply #28 on: September 26, 2012, 01:38:48 PM »
I want to try tackling this again, just because my numbers from yesterday are bothering me.

Going back to $300/square foot/year, let's assume that each of the 80 employees has a 225 square foot cubicle (15 feet on a side) in which to work, and add 5x(40*15)=3000 square feet for an aisle down the middle. That's a very rough estimate, and any number of geometrical arrangements could alter it, but I'm going to run with it for the moment.

So 80*225=18,000 square feet + 3,000 square feet = 21,000 square feet or there-abouts for the size of Paragon Studios's physical location. At $300/square foot/year, that's $6.3 million per year just to rend office space. $800k/month is $9.6 million/year. They'd have $3.3 million/year left over to run their company and make profits after just paying for office space.

For just a moment, let's pretend their operating costs are entirely due to labor. This is obviously false, but it will give us a starting point for estimating maximum possible average salary. $3.3 million/80 = $41,250 per employee (per year).

That's...not very much for them to live on in California. And that's imagining that they don't have other operating costs like running the server farm or buying office supplies or the like. I hope they're all single!

RogerWilco

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Re: $800k/month profit? I think you mean revenue?
« Reply #29 on: September 26, 2012, 02:15:36 PM »
I want to try tackling this again, just because my numbers from yesterday are bothering me.

Going back to $300/square foot/year, let's assume that each of the 80 employees has a 225 square foot cubicle (15 feet on a side) in which to work, and add 5x(40*15)=3000 square feet for an aisle down the middle. That's a very rough estimate, and any number of geometrical arrangements could alter it, but I'm going to run with it for the moment.

So 80*225=18,000 square feet + 3,000 square feet = 21,000 square feet or there-abouts for the size of Paragon Studios's physical location. At $300/square foot/year, that's $6.3 million per year just to rend office space. $800k/month is $9.6 million/year. They'd have $3.3 million/year left over to run their company and make profits after just paying for office space.
Those numbers sound really high.

For that kind of money you can build an office. Seriously, my current employer is building an office for 100 people for about 9 million euros. Right now.

If I look at a list like this: http://www.loopnet.com/California/Mountain-View_Office-Space-For-Lease/
I see ranges from about $12-$40, not $300. For cubicle sizes I see 50-100 Sq. ft. reported. Let's assume PS wasn't in the high end of the scale, and it didn't look to roomy in the webcasts, but taking into account aisles and meetingrooms, I'd guess $25 x 100sq. ft. x 80  = $200,000 per year, maybe $250k or $300k. Certainly not $6+ million a year.

I know for a fact that running a 22 man software company in 2005 took about 1.4 million dollars. Total. Add inflation and California, and PS would be in the $8-10 million range. Depending on what you include, it could be half a million more or less, but I would be really surprised if it wasn't in that range.
It's likely that NCsoft could have kept a smaller PS afloat on CoH for a while, but it would not have the money for The Secret Project or CoH2 if revenue would at all go down from the $800/month we saw since Freedom, unless money came in from corporate, which is losing money.

I'm speculating here, but it could well have been that PS needed money from NCsoft to keep The Secret Project going and NCsoft didn't want to focus on that because Wildstar, GW2, B&S and such looked more promissing. Maybe it was just too far in the future and they needed a quick hit now. This would then leave the choice of slowly letting CoH die with a much smaller staff, or shutting the whole PS down. Given current numbers at NCsoft, there might have been an urge to do something drastic and go for the last option.

It will be interesting to see what number they will report as revenue for Q3 for CoH.
« Last Edit: September 26, 2012, 02:44:19 PM by RogerWilco »

downix

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Re: $800k/month profit? I think you mean revenue?
« Reply #30 on: September 26, 2012, 02:30:27 PM »
I want to try tackling this again, just because my numbers from yesterday are bothering me.

Going back to $300/square foot/year, let's assume that each of the 80 employees has a 225 square foot cubicle (15 feet on a side) in which to work, and add 5x(40*15)=3000 square feet for an aisle down the middle. That's a very rough estimate, and any number of geometrical arrangements could alter it, but I'm going to run with it for the moment.
largest cubicle I've ever worked in was 64 square foot. Most were 36.
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So 80*225=18,000 square feet + 3,000 square feet = 21,000 square feet or there-abouts for the size of Paragon Studios's physical location. At $300/square foot/year, that's $6.3 million per year just to rend office space. $800k/month is $9.6 million/year. They'd have $3.3 million/year left over to run their company and make profits after just paying for office space.
And using real world cubicles, most likely 36 square feet, the whole math is thrown off. Now you are talking 80x36=2880 square feet, let's round that to 3,000 + 3,000 square feet = 6,000 square feet. If they were paying the highest price for office space in the area, which was $288 square feet per year (most averaged for far less, but let us assume NCSoft used the creme de la creme) you are still coming in at significantly less, only $1,800,000.
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For just a moment, let's pretend their operating costs are entirely due to labor. This is obviously false, but it will give us a starting point for estimating maximum possible average salary. $3.3 million/80 = $41,250 per employee (per year).

That's...not very much for them to live on in California. And that's imagining that they don't have other operating costs like running the server farm or buying office supplies or the like. I hope they're all single!
A simple adjustment and now their overhead goes to 15% of total revenue instead of 78%. And if they were smarter about a leasing location, closer to the $40/year range, then office space is negligible.

Segev

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Re: $800k/month profit? I think you mean revenue?
« Reply #31 on: September 26, 2012, 02:42:51 PM »
Okay, I looked at that site to get the $300/sq. ft. value I was using. I must have misparsed the graphs something fierce or totally mis-recalled the values. ^^;

That DOES sound a lot more reasonable; thanks for re-checking the numbers.

Hm. 64 square foot cubicle is 8 feet on a side. That DOES sound more likely than 15 feet on a side. What I get for eyeballing without actually using my arms to measure. I'm not sure what I was thinking when I was doing that math.

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Re: $800k/month profit? I think you mean revenue?
« Reply #32 on: September 26, 2012, 02:44:31 PM »
Okay, I looked at that site to get the $300/sq. ft. value I was using. I must have misparsed the graphs something fierce or totally mis-recalled the values. ^^;

That DOES sound a lot more reasonable; thanks for re-checking the numbers.

Hm. 64 square foot cubicle is 8 feet on a side. That DOES sound more likely than 15 feet on a side. What I get for eyeballing without actually using my arms to measure. I'm not sure what I was thinking when I was doing that math.
Most of the ones I've ever worked in were 6' on a side, only the double-cube with two people in it were 8' on a side. Here's info on cubicle sizes:
http://www.360officefurniture.com/cubicle-sizes.htm

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Re: $800k/month profit? I think you mean revenue?
« Reply #33 on: September 26, 2012, 02:51:46 PM »
Most of the ones I've ever worked in were 6' on a side, only the double-cube with two people in it were 8' on a side. Here's info on cubicle sizes:
http://www.360officefurniture.com/cubicle-sizes.htm

PS seemed to have offices that were shared with a few coworkers, at least from the webcast it looked that way. Now I'm not so good with these weird length and surface area units you use to I have a hard time estimating how many square feet those would be. It looked like maybe 20 to 25 sq. metres, so 200-250 sq. ft for 3 or 4 people. Including hallways, conference rooms and such, my guess of 100 sq. ft. per employee still seems reasonable.

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Re: $800k/month profit? I think you mean revenue?
« Reply #34 on: September 26, 2012, 03:04:03 PM »
I've never worked in a cubicle that I could touch opposite walls of simultaneously. I am six feet tall, and have therefore about a 6 foot fingertip-to-fingertip maximum extent. Having (now that others mentioned more reasonable sizes) eyeballed the distance from my fintertips to the walls when I'm as centered as possible, it would seem to be an 8x8 cubicle that I'm in right now.

Others have been comparably sized. One other at the company for which I am currently working, and one at a wholly unrelated company.

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Re: $800k/month profit? I think you mean revenue?
« Reply #35 on: September 26, 2012, 03:21:06 PM »
Cubes where I have worked the last 12 years have been steadily shrinking. They used to be 6' on a side for "line" folks, 8' on a side for managers who didn't rate a full office. Those started shrinking, and they also got rid of manager cubes. These days, a lot people don't even get a full cube unless it's shared between multiple people - a lot of them get something like 4'wide desks lined up side-by-side with dividers between them. (In other words, it's not even a cube.)

I'm going to guess how much space companies give out for employees has a lot to do with a combination of how flush with disposable income the company feels, how much they value the happiness of "line" workers, and probably other more obscure factors. Basically, without asking an (ex) PS employee, we probably have no idea what the "typical" cube size was.

Segev

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Re: $800k/month profit? I think you mean revenue?
« Reply #36 on: September 26, 2012, 03:30:28 PM »
Well, going with a much-more-reasonable but-apparently-still-somewhat-generous 64 square feet per cubicle and $40/sq. ft./year, we come out with 80x64x$40 = $204,800/year for cubicles and...well, let's just add half that again for manager offices and walkway space (acknowledging that these are luxuriously large manager offices, given that they're including 64 sq. ft. that would be part of a cubicle). So call it $307,200/year for their offices.

That leaves plenty of room for operating expenses and salaries and the like. Profits could be pretty significant, depending how much the operating expenses are. As a total-guess ballpark figure, let's pretend it's $3 million/year for operating expenses. Things like server maintenance, replacement parts, new computers, office supplies, travel expenses, advertising, etc. So we're at $3.31 million/year costs before employee salaries, out of $9.6 million/year revenue. $6.29 million left to pay salaries and account for any profits.

$6.29 million divided by 80 employees, if we assume they just had salaries and no profits, would be $78,625/year in salaries. Actually rather high, but perhaps not for an average salary when one includes management. Cut another $1million out as estimated profits, just for grins, and average employee salary comes out to about $66,125/year. I don't know CoL in CA, but that's fairly decently middle class, I think.

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Re: $800k/month profit? I think you mean revenue?
« Reply #37 on: September 26, 2012, 03:43:47 PM »
True, but then... Cable TV started out with the same intentions. Pay for access so no commercials. And look how well THAT worked out...  :roll:

Just a quick unrelated side note...  I see this claim a lot, but cable television did not start out with that intention.  Originally, cable television was used to simply relay the same broadcast stations--commercials and all--to areas where signals normally could reach.  If you were really far away from a broadcast tower, lived in a valley, etc., then you'd consider getting cable television because the only alternative was snow with little to no picture.

Eventually, people started making channels specifically for cable television with no broadcast equivalent.  For example, ESPN and CNN have always had commercials.  You also started seeing the rise of "premium" channels like HBO and Showtime, which you paid extra for on top of your normal cable bill specifically for the privilege of not having to watch commercials.  Also, there are public access channels that are nominally "commercial-free" in that they don't run standard interstitial spots like the big networks do, but most of them willingly and routinely sell blocks of time from 30 minute to several hours to commercial companies, which then use those blocks to run infomercials.

Anyway, point is, cable television has always had commercials.  Only specific channels were advertised as being commercial-free; channels that usually carried (and still carry) a premium price on top of regular cable service.

But I digress...

Everyone I've talked to, people I consider reliable sources, have said that the game was doing very well, that it was well beyond self-sustaining financially.  This wasn't about money, it really is about long term goals and resource allocation.

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Re: $800k/month profit? I think you mean revenue?
« Reply #38 on: September 26, 2012, 03:47:15 PM »
Well, going with a much-more-reasonable but-apparently-still-somewhat-generous 64 square feet per cubicle and $40/sq. ft./year, we come out with 80x64x$40 = $204,800/year for cubicles and...well, let's just add half that again for manager offices and walkway space (acknowledging that these are luxuriously large manager offices, given that they're including 64 sq. ft. that would be part of a cubicle). So call it $307,200/year for their offices.

That leaves plenty of room for operating expenses and salaries and the like. Profits could be pretty significant, depending how much the operating expenses are. As a total-guess ballpark figure, let's pretend it's $3 million/year for operating expenses. Things like server maintenance, replacement parts, new computers, office supplies, travel expenses, advertising, etc. So we're at $3.31 million/year costs before employee salaries, out of $9.6 million/year revenue. $6.29 million left to pay salaries and account for any profits.

$6.29 million divided by 80 employees, if we assume they just had salaries and no profits, would be $78,625/year in salaries. Actually rather high, but perhaps not for an average salary when one includes management. Cut another $1million out as estimated profits, just for grins, and average employee salary comes out to about $66,125/year. I don't know CoL in CA, but that's fairly decently middle class, I think.

Not all workers were for CoX either. The studio was working on other titles. So if studying the issue, it looked that CoXws paying for future growth as well. Even if it was only breaking even it represented future profits with minimal infusion. If slicing off those and just running CoX as a minimal supported product like Guild Wats and Lineage we are able to drop staff to 15. Add in server consolidation and it could easily be profitable.

Edit: fixed opening quote tag - eabrace
« Last Edit: September 26, 2012, 03:59:32 PM by eabrace »

Segev

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Re: $800k/month profit? I think you mean revenue?
« Reply #39 on: September 26, 2012, 03:54:52 PM »
Dropping down to only 15 employees and keeping their salaries in the low six-figure range (decidedly luxurious for non-high-end management), it gets extremely profitable. Under the assumptions downix made about the other 65 employees.

downix

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Re: $800k/month profit? I think you mean revenue?
« Reply #40 on: September 26, 2012, 04:15:49 PM »
Dropping down to only 15 employees and keeping their salaries in the low six-figure range (decidedly luxurious for non-high-end management), it gets extremely profitable. Under the assumptions downix made about the other 65 employees.
Not assuming anything. I am pointing out how if profit was the concern, that is how to do it. As it is now, roughly 2/3 of the studio best estimates are working on the new game, with the remaining third on CoX. Under a profit concern, CoX has run with as few as 15 people and still gotten updates out the door, which tells us how low we can go cost-wise.

A 15 person maintenance studio also does not need anywhere near as much room to operate as an 80 person development studio.

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Re: $800k/month profit? I think you mean revenue?
« Reply #41 on: September 26, 2012, 04:24:17 PM »
Another thing to consider, is quality of work. With those 15 people, working on CoH, we managed to get issue 10. Which was a major overhaul to the RWZ, as well as other pretty massive changes.

So, working at 'bare minimal' might not be a bad thing, especially when the quality of work, is pretty massive.

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Re: $800k/month profit? I think you mean revenue?
« Reply #42 on: September 26, 2012, 04:28:19 PM »
Another thing to consider, is quality of work. With those 15 people, working on CoH, we managed to get issue 10. Which was a major overhaul to the RWZ, as well as other pretty massive changes.

So, working at 'bare minimal' might not be a bad thing, especially when the quality of work, is pretty massive.
Precisely.

I think the real problem for Paragon Studios is that NCSoft never authorized them to make City of Heroes 2. With popular titles, dropoff will happen. Look at Lineage and Guild Wars. The key to keeping a title fresh is a revamp. A CoH2 project, as described by Positron, would have given them precisely what was neeed. Use the studio to get the existing IP up to snuff during the more profitable end of the life cycle, but unlike GW and Lineage, the existing game can then migrate over, giving NCSoft a double-bonus: new sales increase *and* elimination of old-cycle support simultaneously. CoH2's idea to migrate over the existing playerbase and characters would have been the key.

But even in maintenance mode, CoH would remain profitable. It was the development without obvious tie-ins which would have caused any red ink.

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Re: $800k/month profit? I think you mean revenue?
« Reply #43 on: September 26, 2012, 04:34:32 PM »
The free conversion fell way under the increases brought in by other games, and anecdotal evidence that a lot of veterans actually spend more, is actually consistent.

The conversion had a serious issue with veteran dependency... when I see a small increase immediately after the conversion followed by revenue lower than the previous year, it suggests a lot of veterans spent big and no dramatic increase of new customers happened.  Personally I made a habit of checking profiles because I was concerned at how rare the elusive new customer was, and regardless of attempts like the training arcs a lot of the ones I did find had plenty of trouble getting situated.

The restrictions of how a trial or later free person could chat or use channels or participate in supergroups were absolutely killer.  The /reply command was obscure, the players had a recruitment channel system that the people with new accounts had no way to use, replaced by official chat a few months prior to the closure, and the help channel was inexcusably glitched for a few years.  How often did you encounter a person who said the game was totally dead, or it was impossible getting recruitment, only to get a veteran response to use a channel or a populated server, as if you should be a new person and know how to prior to the signup?  The game actually listed servers in quietest first order!

Another thing was how operating the store required a user who understood what was there and how to search in the first place.  The interface was bad.  It had no way to block bought items.  The effort involved reduced impulse buying.  I would also put a lot of the veteran rewards in the store instead, along with a ton of the pre-conversion costume pieces.  There should be a way to buy incarnate access through a license and invention access should probably not be automatically free in any veteran level, especially since many veterans are uninterested in the incarnates.
« Last Edit: September 26, 2012, 05:08:08 PM by Chaos Ex Machina »

downix

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Re: $800k/month profit? I think you mean revenue?
« Reply #44 on: September 26, 2012, 04:52:00 PM »
What a lot of you do not understand is how the free conversion fell way under the increases brought in by other games, and anecdotal evidence that a lot of veterans actually spend more, is actually consistent.

The conversion had a serious issue with veteran dependency... when I see a small increase immediately after the conversion followed by revenue lower than the previous year, it suggests a lot of veterans spent big and no dramatic increase of new customers happened.  Personally I made a habit of checking profiles because I was concerned at how rare the elusive new customer was, and regardless of attempts like the training arcs a lot of the ones I did find had plenty of trouble getting situated.

The restrictions of how a trial or later free person could chat or use channels or participate in supergroups were absolutely killer.  The /reply command was obscure, the players had a recruitment channel system that the people with new accounts had no way to use, replaced by official chat a few months prior to the closure, and the help channel was inexcusably glitched for a few years.  How often did you encounter a person who said the game was totally dead, or it was impossible getting recruitment, only to get a veteran response to use a channel or a populated server, as if you should be a new person and know how to prior to the signup?  The game actually listed servers in quietest first order!

Another thing was how operating the store required a user who understood what was there and how to search in the first place.  The interface was bad.  It had no way to block bought items.  The effort involved reduced impulse buying.  I would also put a lot of the veteran rewards in the store instead, along with a ton of the pre-conversion costume pieces.  There should be a way to buy incarnate access through a license and invention access should probably not be automatically free in any veteran level, especially since many veterans are uninterested in the incarnates.
I have no arguments here. I too found the store interface fustrating and confusing.

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Re: $800k/month profit? I think you mean revenue?
« Reply #45 on: September 26, 2012, 04:59:06 PM »
Another thing was how operating the store required a user who understood what was there and how to search in the first place.  The interface was bad.  It had no way to block bought items.  The effort involved reduced impulse buying.  I would also put a lot of the veteran rewards in the store instead, along with a ton of the pre-conversion costume pieces.  There should be a way to buy incarnate access through a license and invention access should probably not be automatically free in any veteran level, especially since many veterans are uninterested in the incarnates.
Yeah, the store had a lot of room for improvement.  I was frequently annoyed by trying to figure out what I had and had not already purchased.  And I agree that there should have been a way to purchase passes into every possible aspect of the game.

I often found myself wishing that the CoH store had been implemented more like the DDO store.  (No, DDO isn't perfect, but they've done a lot of things very well since going F2P and very quickly addressed issues when they were not working out the way they had hoped.)  Free players in DDO don't have access to classes like Monks, races like Drow, and some content like Three Barrel Cove by default.  They can unlock some perks through game play on each individual server (Drow can be unlocked by earning enough favor from the various houses), but then need to unlock that perk again if they start playing on a new server.  They also have the option of using points to buy game-wide unlocks for just about everything under the sun.  They can unlock races, classes, and adventure packs across all servers on their account with single purchases, allowing them to pick and choose which content they have access to.  The difference between CoH and DDO here, though, is that in DDO, the only thing VIP players have to unlock are Drow and Veteran character creation.  All classes are available to VIPs and all abilities of those classes are available.  The equivalent in CoH would be unlocking Kheldians and Soldiers of Arachnos and having access to all ATs and all power sets without having to pay extra for them.

The DDO store also gives access to hirelings, different types of potions, XP buffs, loot buffs, rez items, vanity pets, armor appearance kits, etc.  Those are easily equivalent to inspirations (super inspirations, team buff inspirations, dual inspirations); temp powers that buff XP, Inf, or Prestige; temp powers that might increase drop rates; temp self-rez powers; vanity pets (obviously); and costume sets.

And the search bar in the DDO store makes it really easy to find what you're looking for.
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Knightslayer

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Re: $800k/month profit? I think you mean revenue?
« Reply #46 on: September 26, 2012, 07:51:18 PM »
Yep, DDO's store wins hands down, to me the abscence of a system that keeps track, always had my paranoid side whispering "They WANT you to mess up and buy things twice!".
In DDO you could also earn store points through completing adventures, of course the amounts were so tiny that they mostly served to give you a taste of the system (and encourage you to actually buy more :P).
Mind you, it was possible to buy everything - it just involved a lot of farming and rerolling alts.


Another trend I've seen lately in F2P games is the ability to sell store currency for in game currency - it's something Perfect World does (through special brokers) and GW2 has it as well, you can trade gems (store currency) for in game gold and vice versa through their auction house.
It pretty much promotes those with a lot of money, but with little spare time to buy store currency and sell it to people with the opposite problem - all the time in the world, but no finances, and the Devs each time make money that they otherwise wouldn't have made; the player looking to make in game money buys more store currency than he normally would've done - and the buyers of that currency never would've used your store anyway due to their finances, now they ARE doing it by proxy (if that made any sense).
Of course, for CoH that system might not work at all - since Inf is so easy to make. Maybe for CoH2 =P

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Re: $800k/month profit? I think you mean revenue?
« Reply #47 on: September 26, 2012, 11:45:35 PM »
I spent way more with CoH Freedom than I did beforehand; not that I am complaining mind you. It used to be that being F2P meant you were shutting down, but if you look at alot of the MMOs out there - microtransactions are what are helping save them. I personally liked CoH Freedom as it gave me more flexibility and options than before. Things that would have irked me off under the traditional system for example would have been: Beast Mastery, Street Justice, Nature Affinity, and Titan Weapons...just not my cup of team. With Freedom the amount of powers and costumes that they were churning out gave me the ability to pass on the ones I did not like/want :)
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Re: $800k/month profit? I think you mean revenue?
« Reply #48 on: September 27, 2012, 12:37:32 AM »
Could you answer the question I pose in this thread. Please.

Since i only write about psychics and am not one myself, the answer obviously is no, I cannot. 

Paragon's profit and loss figures were not available separately from NCSoft's. 

My husband teased out that stuff himself before he got occupied by a cover project with a 3 week deadline and I am not about to jiggle his elbow at this point.  I am not sure where my husband got what he quoted to me, but I have generally found his search-fu to be pretty astonishingly reliable.
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Re: $800k/month profit? I think you mean revenue?
« Reply #49 on: September 27, 2012, 03:24:32 AM »
I have friends like that. People who can, in moments, find something I've failed to locate with hours of attempted searching online. There's a real skill and talent to it.

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Re: $800k/month profit? I think you mean revenue?
« Reply #50 on: September 27, 2012, 10:53:53 AM »
I have friends like that. People who can, in moments, find something I've failed to locate with hours of attempted searching online. There's a real skill and talent to it.

Don't forget: Mr. Jazzhands also has connections we don't.
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Re: $800k/month profit? I think you mean revenue?
« Reply #51 on: September 29, 2012, 05:24:36 PM »
« Last Edit: September 29, 2012, 05:32:18 PM by void hunter »

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Re: $800k/month profit? I think you mean revenue?
« Reply #52 on: September 29, 2012, 05:53:53 PM »
The only true data point anyone outside of Paragon Studios or NCSoft has is the NCSoft release of their quarterly figures for investors report. Anything outside of that including what it cost to pay, insure, cover facility fees and so on is pure conjecture. There's no point in going with this guess work.

All indications of how Paragon Studio was handling its operations point to a healthy studio. According to VV, even War Witch told her they were doing well. This is all we have to go with on this. Until the PS staff NDAs and severance packages expire, we won't know just how well or not the studio was doing. Even then we may never know. I think it's time to just let it all go.

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Re: $800k/month profit? I think you mean revenue?
« Reply #53 on: September 29, 2012, 06:17:14 PM »
The only true data point anyone outside of Paragon Studios or NCSoft has is the NCSoft release of their quarterly figures for investors report. Anything outside of that including what it cost to pay, insure, cover facility fees and so on is pure conjecture. There's no point in going with this guess work.

All indications of how Paragon Studio was handling its operations point to a healthy studio. According to VV, even War Witch told her they were doing well. This is all we have to go with on this. Until the PS staff NDAs and severance packages expire, we won't know just how well or not the studio was doing. Even then we may never know. I think it's time to just let it all go.

While this may very well be true (even the time to let it go part), many people keep posting from the assumption that this was a VERY profitable venture. For example, VV is continuing to say War Witch said things were going WELL. I'm willing to bet War Witch didn't know all of the costs associated with running the whole venture, and I know for a fact that none of us do. My post was to bring the financial statements more into the realm of reality. If it's going to be discussed (and honestly the only time people say let's not discuss it is when someone says it's probably not doing as well as assumed), then it should be fully discussed in a way that helps us to understand why this might have happened and what obstacles are presently in the way of any transition.

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Re: $800k/month profit? I think you mean revenue?
« Reply #54 on: September 29, 2012, 06:38:31 PM »
While this may very well be true (even the time to let it go part), many people keep posting from the assumption that this was a VERY profitable venture. For example, VV is continuing to say War Witch said things were going WELL. I'm willing to bet War Witch didn't know all of the costs associated with running the whole venture, and I know for a fact that none of us do. My post was to bring the financial statements more into the realm of reality. If it's going to be discussed (and honestly the only time people say let's not discuss it is when someone says it's probably not doing as well as assumed), then it should be fully discussed in a way that helps us to understand why this might have happened and what obstacles are presently in the way of any transition.

And I think you're passing judgment on people based on pure conjecture. That stops now, methinks. Thank you.
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Re: $800k/month profit? I think you mean revenue?
« Reply #55 on: September 29, 2012, 07:48:03 PM »
How is me saying the numbers aren't realistic equate to me passing judgment? People are still using numbers as a justification for their viewpoints. What if their numbers aren't realistic? What's the harm in making things clearer in this particular view? On a sidenote, how is it that you seem to think you have the right to dictate how anyone else views or says things?

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Re: $800k/month profit? I think you mean revenue?
« Reply #56 on: September 29, 2012, 07:49:17 PM »
Actually, conjecture could become very important should Plan Z become necessary, or whatever letter we gave to trying to find a way to for a company to buy the IP, if I'm even remembering that happening at all. (Seriously, the threads list has reached 17 pages and is showing no signs of slowing; I doubt I'd find it now if I tried.) In that case, though, I believe it's called a "business plan." Therefore, perhaps conjectural discussions would probably best be had over there.  ;D
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Re: $800k/month profit? I think you mean revenue?
« Reply #57 on: September 29, 2012, 07:56:09 PM »
Actually, conjecture could become very important should Plan Z become necessary, or whatever letter we gave to trying to find a way to for a company to buy the IP, if I'm even remembering that happening at all. (Seriously, the threads list has reached 17 pages and is showing no signs of slowing; I doubt I'd find it now if I tried.) In that case, though, I believe it's called a "business plan." Therefore, perhaps conjectural discussions would probably best be had over there.  ;D

Agreed, and it's a bit ironic that pretty much EVERY post in most of these threads is based on conjecture. Apparently it's only allowed if my conjecture agrees with other people's conjecture.  ;)

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Re: $800k/month profit? I think you mean revenue?
« Reply #58 on: September 29, 2012, 10:36:14 PM »
I respect the input of those who are willing to show their work, and put their math and sources on the table.  We will need a business plan and even deeper attention to detail, in the event Plan Z or some Titan-operated CoH recovery effort is required.

All financial analysis of this sort requires conjecture; accurate conjecture is the goal.

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Re: $800k/month profit? I think you mean revenue?
« Reply #59 on: September 30, 2012, 02:02:28 AM »
Well I can tell you one thing you have conjectured is way out of whack.

Unless you are counting the periodic emails that NCSoft put out to present and former CoH sunscribers as advertising, NCSoft spent $0 on advertising for CoH.

Yes.  That's right.  They had no budget for conventional advertising for CoH.  Confirmed by Brian Clayton. 

One reason why Paragon had taken to creative venues like the Coffee Talks and the other virtual presences.
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Re: $800k/month profit? I think you mean revenue?
« Reply #60 on: September 30, 2012, 02:10:38 AM »

Which is sad :( Do you know how I found out about CoH? A tv commercial. I had NEVER played an MMO before. I was sitting there watching tv and saw this commercial http://youtu.be/mxMlw12Okm0 - I got up off the couch...put my shoes on...went to WalMart and grabbed my copy of City of Heroes. I realize tv advertisements are expensive, but CoH's complete lack of advertisement did nothing but hurt the subscription numbers. As recently as July I brought a co-worker into CoH because GASP they had never heard of it before; they play WoW and some other MMO.

Well I can tell you one thing you have conjectured is way out of whack.

Unless you are counting the periodic emails that NCSoft put out to present and former CoH sunscribers as advertising, NCSoft spent $0 on advertising for CoH.

Yes.  That's right.  They had no budget for conventional advertising for CoH.  Confirmed by Brian Clayton. 

One reason why Paragon had taken to creative venues like the Coffee Talks and the other virtual presences.

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Re: $800k/month profit? I think you mean revenue?
« Reply #61 on: September 30, 2012, 02:15:53 AM »
Which is sad :( Do you know how I found out about CoH? A tv commercial. I had NEVER played an MMO before. I was sitting there watching tv and saw this commercial http://youtu.be/mxMlw12Okm0 - I got up off the couch...put my shoes on...went to WalMart and grabbed my copy of City of Heroes. I realize tv advertisements are expensive, but CoH's complete lack of advertisement did nothing but hurt the subscription numbers. As recently as July I brought a co-worker into CoH because GASP they had never heard of it before; they play WoW and some other MMO.

And when I saw ads for WoW on the Publisher's Clearing House contests I enter (WHAT??  It's free and someone wins once in a while!) and that HUGE Mountain Dew campaign that WoW had going, I kept thinking...wtf NCSoft?  Why aren't you in comic books at least?
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Re: $800k/month profit? I think you mean revenue?
« Reply #62 on: September 30, 2012, 02:39:43 AM »
...man.

I could do better. And I'm definitely not a marketer by any sort of training. ^^;

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Re: $800k/month profit? I think you mean revenue?
« Reply #63 on: September 30, 2012, 03:04:48 AM »
Considering they had no budget for any sort of advertising, I think they did pretty well with what they had.
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Re: $800k/month profit? I think you mean revenue?
« Reply #64 on: September 30, 2012, 03:26:59 AM »
Yes. I could do better because I'd bloody well give my subsidiaries an advertising budget.

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Re: $800k/month profit? I think you mean revenue?
« Reply #65 on: September 30, 2012, 03:40:15 AM »
No argument there.  :)
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Re: $800k/month profit? I think you mean revenue?
« Reply #66 on: September 30, 2012, 03:48:56 AM »
If the game's saved, I'm definitely going to do what I can to support its marketing.
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Re: $800k/month profit? I think you mean revenue?
« Reply #67 on: September 30, 2012, 03:59:27 AM »
Well I can tell you one thing you have conjectured is way out of whack.

Unless you are counting the periodic emails that NCSoft put out to present and former CoH sunscribers as advertising, NCSoft spent $0 on advertising for CoH.

Yes.  That's right.  They had no budget for conventional advertising for CoH.  Confirmed by Brian Clayton. 

One reason why Paragon had taken to creative venues like the Coffee Talks and the other virtual presences.

Well that's $50k, not really a game changer, but you need to include their website upkeep and any internet costs such as any google placement etc. even if these things are completely free then the extra $50k isn't really going to change my statements. Unless of course you have more solid numbers on their operational costs. If that's the case, list them out so we can discuss them openly.

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Re: $800k/month profit? I think you mean revenue?
« Reply #68 on: September 30, 2012, 07:08:26 AM »
Well that's $50k, not really a game changer, but you need to include their website upkeep and any internet costs such as any google placement etc. even if these things are completely free then the extra $50k isn't really going to change my statements. Unless of course you have more solid numbers on their operational costs. If that's the case, list them out so we can discuss them openly.

You know what?  I don't have to.  You know why?  Because the former studio manager, the guy who must have had every bit of information at his disposal, is trying to buy the property.  He's not in the business of losing money.  He's not in it to get investors and then have the studio crash and burn under him.  He knows exactly how much it cost to run and if it is viable.  What good is it going to be to him if the studio goes under?  He'll have angry investors suing him, and a blot on his resume so big no one will ever hire him in game work again.  If he didn't want it, it would be a different story, but he has told several of us that buying the IP is a big part of his plan.

In other words, the one person who is the single best placed individual to know whether or not the game, and the studio, was profitable is the one trying to buy it.  That should be all you or anyone else needs to know.
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Re: $800k/month profit? I think you mean revenue?
« Reply #69 on: September 30, 2012, 07:44:03 AM »
You know what?  I don't have to.  You know why?  Because the former studio manager, the guy who must have had every bit of information at his disposal, is trying to buy the property.  He's not in the business of losing money.  He's not in it to get investors and then have the studio crash and burn under him.  He knows exactly how much it cost to run and if it is viable.  What good is it going to be to him if the studio goes under?  He'll have angry investors suing him, and a blot on his resume so big no one will ever hire him in game work again.  If he didn't want it, it would be a different story, but he has told several of us that buying the IP is a big part of his plan.

In other words, the one person who is the single best placed individual to know whether or not the game, and the studio, was profitable is the one trying to buy it.  That should be all you or anyone else needs to know.

As usual, VV strikes hard, swift, and with deadly accuracy! :)
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Re: $800k/month profit? I think you mean revenue?
« Reply #70 on: September 30, 2012, 08:06:57 AM »
You know what?  I don't have to.  You know why?  Because the former studio manager, the guy who must have had every bit of information at his disposal, is trying to buy the property.  He's not in the business of losing money.  He's not in it to get investors and then have the studio crash and burn under him.  He knows exactly how much it cost to run and if it is viable.  What good is it going to be to him if the studio goes under?  He'll have angry investors suing him, and a blot on his resume so big no one will ever hire him in game work again.  If he didn't want it, it would be a different story, but he has told several of us that buying the IP is a big part of his plan.

In other words, the one person who is the single best placed individual to know whether or not the game, and the studio, was profitable is the one trying to buy it.  That should be all you or anyone else needs to know.

No, that is not necessarily true. People can buy unprofitable companies in hopes they can turn them around with a different approach, especially if they get them at low price. It wouldn't be the first case and definitely not the last. I am not saying that either VV or voidhunter are right or not, but again until the numbers are shown explicitly is just speculation.

I can't help being concern when we are encouraged  to shut up and take something as an undeniable truth.





 


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Re: $800k/month profit? I think you mean revenue?
« Reply #71 on: September 30, 2012, 08:13:05 AM »
Wow, did I step on someone's toes here? Is the former manager here throwing out numbers like everyone else? Yeah I'm sure someone in the system knows this stuff, the question at play here is simple, has that person shared these numbers with you or anyone else? Why exactly are you getting so defensive? No one has said that Paragon couldn't be profitable, but you really should think about something for a second. Just because Paragon was in the black doesn't mean NCsoft was actually profiting enough off of Paragon to justify continuing with them. By the time the money filtered back to Korea there may have been very little left.

The question I'm raising is does NCSoft stand to make more by taking a loss and using it as a write-off than they would from selling the game? If so, then they will be reluctant, and understanding this puts everyone in a better position for making decisions. I'm a business owner and have personally taken out 2 business loans in the past 3 years, so actually I have some experience in this area.

On a side note if you (VV) and Drake are this emotionally overcharged about this, then maybe the two of you should take a break and let other people talk while you guys recover and collect yourselves. I didn't insult either of you and for some reason you want to come at me as if I have. If you want to apologize, fine. If not then I'm just going to ignore the two of you k?

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Re: $800k/month profit? I think you mean revenue?
« Reply #72 on: September 30, 2012, 08:19:55 AM »
Wow, did I step on someone's toes here? Is the former manager here throwing out numbers like everyone else? Yeah I'm sure someone in the system knows this stuff, the question at play here is simple, has that person shared these numbers with you or anyone else? Why exactly are you getting so defensive? No one has said that Paragon couldn't be profitable, but you really should think about something for a second. Just because Paragon was in the black doesn't mean NCsoft was actually profiting enough off of Paragon to justify continuing with them. By the time the money filtered back to Korea there may have been very little left.

The question I'm raising is does NCSoft stand to make more by taking a loss and using it as a write-off than they would from selling the game? If so, then they will be reluctant, and understanding this puts everyone in a better position for making decisions. I'm a business owner and have personally taken out 2 business loans in the past 3 years, so actually I have some experience in this area.

On a side note if you (VV) and Drake are this emotionally overcharged about this, then maybe the two of you should take a break and let other people talk while you guys recover and collect yourselves. I didn't insult either of you and for some reason you want to come at me as if I have. If you want to apologize, fine. If not then I'm just going to ignore the two of you k?

The point is that no one here needs to know those numbers. The people who need them already have them.
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Re: $800k/month profit? I think you mean revenue?
« Reply #73 on: September 30, 2012, 08:29:13 AM »
The point is that no one here needs to know those numbers. The people who need them already have them.

I don't see you interjecting into every thread where someone mentions how they think the game was making millions of dollars and telling them the numbers don't need to be discussed. Actually I bet if I look through your posts you've discussed it at one point or another. No one "needed" to know why NCSoft decided to end the game either for that matter. You can decide for yourself whether or not you want to have a reasonable discussion about this, but you're NOT going to make that decision for me or anyone else that chooses to.

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Re: $800k/month profit? I think you mean revenue?
« Reply #74 on: September 30, 2012, 08:37:16 AM »
« Last Edit: September 30, 2012, 08:57:30 AM by BryanSnowden »

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Re: $800k/month profit? I think you mean revenue?
« Reply #75 on: September 30, 2012, 09:13:36 AM »
Wow, did I step on someone's toes here? Is the former manager here throwing out numbers like everyone else? Yeah I'm sure someone in the system knows this stuff, the question at play here is simple, has that person shared these numbers with you or anyone else? Why exactly are you getting so defensive? No one has said that Paragon couldn't be profitable, but you really should think about something for a second. Just because Paragon was in the black doesn't mean NCsoft was actually profiting enough off of Paragon to justify continuing with them. By the time the money filtered back to Korea there may have been very little left.

The question I'm raising is does NCSoft stand to make more by taking a loss and using it as a write-off than they would from selling the game? If so, then they will be reluctant, and understanding this puts everyone in a better position for making decisions. I'm a business owner and have personally taken out 2 business loans in the past 3 years, so actually I have some experience in this area.

On a side note if you (VV) and Drake are this emotionally overcharged about this, then maybe the two of you should take a break and let other people talk while you guys recover and collect yourselves. I didn't insult either of you and for some reason you want to come at me as if I have. If you want to apologize, fine. If not then I'm just going to ignore the two of you k?

It's very possible Paragon studios wasn't profitable, they had a load of people (including several ex CoH people) working on a project for some time that was nowhere close to generating any revenue (different IP), and disengaging that from the CoH figures in any published information I've seen is well nigh impossible.

I think the assumption that CoH was break even or better is almost a given. NCSoft could have said in effect that the game wasn't making money and they were shutting it down, the TR shutdown notice as I've seen it quoted said "the game was not performing as expected", Auto assault they admitted was because of low sub numbers, nothing like that has been said about CoH.

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Re: $800k/month profit? I think you mean revenue?
« Reply #76 on: September 30, 2012, 09:42:42 AM »
Wow, did I step on someone's toes here? Is the former manager here throwing out numbers like everyone else? Yeah I'm sure someone in the system knows this stuff, the question at play here is simple, has that person shared these numbers with you or anyone else?

On a side note if you (VV) and Drake are this emotionally overcharged about this, then maybe the two of you should take a break and let other people talk while you guys recover and collect yourselves. I didn't insult either of you and for some reason you want to come at me as if I have. If you want to apologize, fine. If not then I'm just going to ignore the two of you k?

Any businessman would know why those numbers are not being bandied about in public, nor why they have not been shared with me or anyone else that is not a potential investor. 

I don't have that kind of money, so frankly actual numbers are none of my business.  However, even if they had been shared with me, they would come under the heading of "sensitive information" and that the very last thing any businessman would expect or ask for would be to demand that I put them out in public. 

If you do have the requisite money to invest, by all means, I will be happy to put you in touch with Brian.  After you prove to him that you are a potential investor, that you can come up with the money on his terms, and that you can be trusted in a sensitive business negotiation, your curiosity will be satisfied.

I work with words for a living.  I certainly do not owe you an apology.  If anything, I believe the reverse is true.
« Last Edit: September 30, 2012, 10:13:20 AM by Victoria Victrix »
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Re: $800k/month profit? I think you mean revenue?
« Reply #77 on: September 30, 2012, 09:54:06 AM »
On a side note if you (VV) and Drake are this emotionally overcharged about this, then maybe the two of you should take a break and let other people talk while you guys recover and collect yourselves. I didn't insult either of you and for some reason you want to come at me as if I have. If you want to apologize, fine. If not then I'm just going to ignore the two of you k?

Wow, condescend much? Methinks thou dost protest too much yourself! Perhaps YOU should step away from the keyboard for a bit. You've invested yourself too much in your own argument and the ego sustaining same.


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Re: $800k/month profit? I think you mean revenue?
« Reply #78 on: September 30, 2012, 11:44:51 AM »
Wow, condescend much? Methinks thou dost protest too much yourself! Perhaps YOU should step away from the keyboard for a bit. You've invested yourself too much in your own argument and the ego sustaining same.

Methinks that a decent chunk of the people in this thread need to take a step back, chill and consume a tasty frozen dairy concoction.

There's a lot of valid points, but there's a lot of un-needed aggression. The last thing this movement needs is it's people at each others throats over some stupid disagreement.

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Re: $800k/month profit? I think you mean revenue?
« Reply #79 on: September 30, 2012, 12:17:02 PM »
Methinks that a decent chunk of the people in this thread need to take a step back, chill and consume a tasty frozen dairy concoction.

There's a lot of valid points, but there's a lot of un-needed aggression. The last thing this movement needs is it's people at each others throats over some stupid disagreement.

Yeah. You're right. I retract my accusation above.

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Re: $800k/month profit? I think you mean revenue?
« Reply #80 on: September 30, 2012, 01:23:09 PM »
Methinks that a decent chunk of the people in this thread need to take a step back, chill and consume a tasty frozen dairy concoction.

There's a lot of valid points, but there's a lot of un-needed aggression. The last thing this movement needs is it's people at each others throats over some stupid disagreement.

Thank you, Zolgar. I was just about to post something to that very effect.

Guys, we wouldn't get so emotional if we didn't care to begin with. But we can't let those emotions tear us apart. Not here, not now. We don't know what the raw, uncooked numbers are. All we know is that several insiders in Paragon Studios were apparently under the impression that the game was "doing well" and (potentially) profitable enough to borrow millions of dollars to save. We don't really need to go much farther into details to that--details aren't germane to our efforts to save the game. We have to trust those in the know to act with honor and foresight, just as they trust us to act with respect and enthusiasm.
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Re: $800k/month profit? I think you mean revenue?
« Reply #81 on: September 30, 2012, 01:46:52 PM »
Okay guys, we've devolved into bickering, so I'm going to lock the thread.  The $800k/month thing was probably a misunderstanding or a misstatement by someone (not necessarily anyone posting in this thread) confusing revenue with profit.  There's also a good chance that the raw numbers not reported in the Investor Relations report are different.  I haven't personally seen the financials for City of Heroes, but I've talked several times with people who would be intimately familiar with them, and they have all said that City of Heroes was doing very well.  Was it making a million dollars a month?  Probably not, but it was doing a lot better than just breaking even, too.  It was more than pulling its own weight, even after expenses were factored in.

When or if we get to the point where we need to write up a plan for investors in a new game, we can revisit this topic, hopefully in a bit less confrontational manner.  In the meantime--and this goes for everyone--please stop assuming that people here are deliberately misrepresenting information, are too emotionally invested in the game to see the "truth" of the situation, or trying to shut down differing opinions.  The only one here shutting down opinions would be me, and the only opinion I'm trying to shut down is that your fellow players and teammates in this endeavor are stupid or malicious; neither is true.  So please, park the snark.