I think it's an appropriate time to comment on Perfect World Entertainment's acquisition of Cryptic Studios given my previous blog posting in May:
Atari is looking to discontinue operations at Cryptic Studios, which it only just picked up in 2008. Cryptic Studios is responsible for $7.5 Million of Atari’s losses during the past fiscal year ($8.8 Million) The discontinued operation is part of Atari’s strategic shift to release fewer, but more profitable games, and to expand more aggressively into the casual online and mobile game space. (via Gamasutra)
The strategic shift comes as no surprise as the casual online and mobile game scene has been rapidly growing for the past few years, while the triple-A MMO space has stagnated with multiple MMOs moving themselves into the more casual, “free to play” model. Atari suffered heavy losses and unfortunately is in a poor position to compete in the high velocity, high capital cost space, so the decision to expand more into the casual and mobile space is a logical one. Casual and mobile games see much earlier return on investment, much lower capital costs, and allows vulnerable publishers like Atari to reduce their risks by exploring multiple, smaller opportunities.
Both of Cryptic’s titles, Champions Online, and Star Trek Online, had released to strong criticisms of lack of polish and content. Small community criticism also involved the pricing and limited nature of of premium content. Both titles also suffered a short lifespan in the media spotlight, which no doubt hindered the titles’ ability to attract new players.
This does not come as a surprise to me personally, as both of Cryptic’s titles seemed to lack severe polish in both the aesthetics and natural flow of the gameplay, and it seemed to be more of an game engine flaw than design issue.
My best wishes to the Cryptic employees, some of which will likely lose their employment during this transition.
My best wishes to Atari, a sound, logical strategic shift does not guarantee a turnaround when the market is rapidly changing.
PWE's acquisition of Cryptic comes as a "small" surprise due to their primarily Asian-focused title offerings, but at second glance is quite consistent with their other studio acquisitions. This includes Blacklight from Zombie Studios, based in Seattle, and Torchlight from Runic Games, also based in Seattle.
Champions Online has already shifted full-gear into a free-to-play model, with Star Trek Online hesitantly staying subscription. Cryptic is not confirming one way or the other as they are waiting for evidence of the model's profitability. It is difficult to imagine STO staying subscription however, due to the upcoming onslaught of newer, shinier games that further test subscriber's willingness to stay with STO.
I await impatiently to see whether PWE can successfully turn a rapid investment sink into a profitable studio through their own tried-and-true Free-to-Play business model, since Cryptic Studio as an entity will likely not survive another failure with a second publisher.