A little while ago Jack Emmert, Chief Creative Officer and Favourite Fan Pinata of Cryptic Studios, made some comments about what he learned from his experiences on City of Heroes / Villains development (and how Champions Online will be better in every way, but that's outside of my focus for this entry). Recently, Melissa Bianco aka War Witch, long-time CoH dev and Fan Favourite Zone Builder, made some comments from the other side of the fence regarding what happened over about the last two years of CoH/v's life.
Put together and thrown in with some
assumptions educated guesses, it paints an interesting picture of the relationship that Cryptic and NCsoft had over CoH/V. Please note I have no internal sources for the material below and am simply pulling together existing public material to paint the picture I see.
To start off with, it's important to know that what Cryptic and NCsoft did in their relationship. In short, Cryptic developed CoH and NCsoft delivered the back-end infrastructure that let people play CoH (e.g. payment systems, servers, customer service, marketing, etc). It is highly likely that under their developer / publisher contract, NCsoft collected all the money from CoH subs and paid Cryptic a development budget / return out of it. CoH launched in April 2004.
Up to late 2005, it seems that Cryptic and NCsoft had a pretty good relationship going - CoH had launched strongly and had between 150 000 and 160 000 active subs for most of the year, down slightly from the 180 000 subs record that occurred closer to launch, but still pretty good in the wake of WoW's unprecendented launch. City of Villains (CoV) was moving closer and closer to release while free additional content releases - not an industry standard at that time - kept adding material to the game that was generally received in a positive light. CoH had done better than expected and CoV was seen as being the next step up.
CoV was a slight step up, sure, but it didn't deliver the numbers Cryptic or NCsoft expected to see. According to Emmert, only 60 000 new players signed on CoV. I'm sure the box sales were a lot higher, as a lot of existing CoH players also bought the 'stand alone expansion', but because you could play both games for free under one sub fee, it was new player growth that Cryptic / NCsoft really wanted. Profit on a box sale is typically not what MMOs want - they rely on sub fees to keep the lights on.
There are a number of theories why CoV didn't sell as well - Enhancement Diversification received a vocal outcry, the system requirements on CoV weren't as friendly to low-end systems, fewer people may have wanted to play a villain than a hero, and so on - but regardless, it looks like the business relationship between NCsoft and Cryptic changed at that point. In early 2006, the CoH/V dev team was downsized by 75% (or to 15 people, according to War Witch). Matt "Positron" Miller took over from Emmert as lead dev on CoH/V while the former lead dev of CoV, David "Zeb / Lord Recluse" Cook ended up out of Cryptic and as lead dev on Stargate: Worlds. A paid expansion was announced, then cancelled.
On a personal note, I don't think it was Cryptic who initiated this change to the development budget. It seemed to me that they planned to develop CoH and CoV side-by-side, with a lead dev looking after each under Emmert's overwatch. It looks like NCsoft - seeing Auto Assualt tank, watching Tabula Rasa's development budget continuing to rise, among other things - thought it wasn't worth putting major reinvestment back into CoH/V after CoV didn't bump the player base by at least 100 000 new players (NB: this target player number is my assumption, but it seems round and big enough to be a fair target).
At this point it looks like Cryptic set about finding other development tasks for the developers newly 'freed' from CoH/V (they've got some unannounced projects and I've probably covered this ground enough before) while a skeleton crew worked on developing content for CoH/V. It looks like one person covered the major systems on their own (War Witch did all zone design from 2006 to early 2008 by herself) and older content was refreshed rather than entirely new content added (which actually worked in CoH/V's favour, with redesigned zones attracting players back to take a look rather than new zones spreading the player base thinner). A quote linked to War Witch about this period of time working on CoH/V was that it seemed that the game was on a deathwatch.
Jump to late 2007 and NCsoft buys CoH/V from Cryptic, sets up a new studio and promises major reinvestment back into the franchise. Why the change of heart? Firstly, I'm certain that Cryptic's Marvel Universe Online was part of the decision - it's not unfeasible to think that NCsoft wanted it's share of a superhero MMO under a greater amount of control than seated underneath another competitor. But that can't be the whole story. The other side has to be that NCsoft saw that CoH/V was still profitable and perhaps an untapped opportunity. If CoH/V has player retention of 90% and is ticking along pretty well with minor investment, surely the opportunity exists to increase investment that will grow the player base to in turn increase profits? At the very least, reinvestment into an existing product has a lower cost and lower risk compared to starting a new MMO from scratch.
As for Cryptic, selling off CoH/V saw them collect the cash they wanted that in turn has seen them step towards independence. I can't say for sure who would be driving such a move, but Cryptic CEO Michael Lewis seems a safe bet. After their experience on CoH/V, Cryptic doesn't want to be subservient to a publisher again in future as far as I can see. Champions Online will be self-published and (assuming that is a success) I'm sure that future releases from Cryptic will be as well.
The winner of this 'divorce' thus far has been CoH/V. NC NorthCal has been set up to house the CoH/V staff (and PS3 development... hmmm), new server hardware has been implemented, new staff are being hired and so on. New revenue streams have been sought to fund this development (including a $10 Valentine's Day pack and the newly announced optional in-game advertising) but it is a step forward for MMO that has apparently been living on life support for a while now. Regardless of how they do it, CoH/V has about 12 months to prepare for the launch of its closest competitor in ChampO, but being under a sole guardian in NCsoft gives CoH/V the best chance of meeting any challenge.
UPDATE: It would seem that Emmert has confirmed that NCsoft slashed the CoH/V development team:
"But our team size got cut by the publisher, and we simply didn't have the manpower to do it."