This entry has been written from an ‘out of character’ perspective to offer some conjecture on CCP’s finances.
I have read a couple of interesting blog posts that I thought I might offer my thoughts on. They concern the health of CCP as a company and how their products are faring in the marketplace.
Our primary instigator here is Corelin writing at Mad Haberdashers about CCP’s 2012 financial report. This is a publicly available document, there are no inside leaks to get worked up over here. His analysis does not make for the rosiest of readings, but I dare say that there are some uncomfortable home truths in there for CCP. I suggest you go read his post to save me recapping it all here.
Ok, I’ll admit up front that I am by no means an accountant. In fact big chunks of that report don’t mean much to me at all, but it is an interesting topic regardless. 2012 was a big year for CCP as the company was all hands to the pumps trying to put out the post-Incarna fires and recovering from the unpleasant aftermath of having to drastically downsize the company to cut costs. It was a successful year for EVE development but a highly turbulent period for CCP.
The report Corelin analyses runs up to December 2012, which was around the time that the Retribution expansion was deployed. I expect that the impact of that release was only just starting to show up in time for these figures to be published, so they likely don’t take into full account just how much of a boon Retribution turned out to be for EVE. At an EVE meet early this year I was talking to one dev who told me that a few months after its release EVE had an all-time record number of trial accounts active with a good rate of subscription conversions.
In February you might recall that EVE broke the 500,000 subscriber mark. The end of year report quotes EVE’s subscriber base as being ‘approximately 490,000’ which would suggest that Retribution added around 10,000 extra customers. If I remember correctly, I think Hilmar once stated that he would consider Incarna to be a success if it brought in 10,000 new players. Just a thought. 😉
The other blog post that caught my eye was this analysis of the impact of Odyssey by Kirith Kodachi over at Inner Sanctum of the Ninevah, in which he compares the Peak Concurrent User count over the past two expansions. By those numbers, that activity boom following Retribution has eroded since Odyssey. The PCU does not tell us the subscriber count, but it is the metric that players prefer to use when comparing player interest in the game.
I would say that the activity level of Odyssey is starting to look similar to that of Inferno, both of which are lower than Crucible and Retribution, but higher than Incarna. Funnily enough the two highest ranking expansions of those five were both winter releases. Obviously CCP would prefer to see a marked rise in activity despite the season, but I do wonder how much the time of year played a part in the slump. I expect that Rubicon will see another rise in activity as the days grow short and colder again in time for the 2013 report, so I’m not too concerned about the health of EVE itself right now.
So CCP’s main source of income, EVE, should report a stronger showing compared to last year which will have brought in some extra cash. Also in May this year Dust514 officially launched. It hasn’t set the gaming world on fire as CCP obviously hoped it might, but as far as I can tell there is no shortage of people playing it and filling up the matches. At least some of them will be spending some money on it, I myself bought a veteran pack to get myself started in the game. Again, even if it isn’t a veritable cash cow the game at least is now becoming a source of some revenue and beginning to pay at least part of its own costs. So that’s a positive compared to a year or so ago.
Corelin points out that CCP will have at least a couple of major loan repayments to make in 2015/2016 for which they will need to boost revenues/cut costs to meet. I find myself thinking of Valkyrie’s 2014 release target here. We still know very little about the game as yet, but CCP do seem very confident and/or determined to launch it next year. Should they succeed then that would be a third product out in the marketplace bringing in new revenue a year or so before that first loan deadline comes around. Further to that, the World of Darkness presentation at Fanfest this year roughly indicated that CCP are looking towards late 2015/2016 to launch WoD.
I think that CCP are very much looking towards delivering marketable products and broadening their sources of income these days. Their merchandising efforts certainly seem to be ramping up with new clothing lines, books, graphic novels, the imminent Collectors Edition boxed set and not to mention a TV show all in the works.
I expect that 2013’s end of year report will show a healthy bump in CCP’s earnings compared to 2012. I also expect that Fanfest 2014 will be the year of EVE Valkyrie ahead of its probable winter release, followed by a 2015 Fanfest that may be the year CCP finally shed a little sunlight on WoD. If they don’t then we will probably have to start calling it vapour-ware. If CCP can turn these investments into products then I expect they will be able to keep the lights on for a few more years yet.