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News & Features Discussion  » [General Article] City of Heroes: Profitable or Not?

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252 posts found
  BillMurphy

Managing Editor

Joined: 7/28/06
Posts: 1748

 
OP  1/04/13 7:51:39 AM#1

The closing of City of Heroes by NCSoft was a heartbreaker for many current and former players. In an investigative piece here at MMORPG.com, we take a look at the closure and whether or not CoH was a profitable game raising speculation about why it was closed in the end. Read on and then join the conversation in the comments.

In my most recent MMOFTW show, I chose the City of Heroes closure by NCsoft as one of the year’s top MMO-related news stories. In the segment, I mentioned that CoH was not profitable, and this is why it was shut down in November. Why? Because this is what we were told by NCsoft as one of the driving reasons behind the closure of the game.  Several readers reached out to tell me this was inaccurate.  But more than that, former Paragon Studios and NCsoft employees reached out to our own Rob Lashley to tell him what they believed to be true regarding the studio’s earnings in a phone interview.

Read more of Bill Murphy's and Rob Lashley's City of Heroes: Profitable or Not?.

  Volkanik

Apprentice Member

Joined: 1/04/13
Posts: 8

1/04/13 9:22:37 AM#2

I really don't understand the need for the continual dissection of why City of Heroes was closed down.  Look at the player number figures from around Q3 of 2009 and you'll see a steady trend downward.  It was an old game that people gradually stopped playing.  Simple as that.

I played the game for many years (it was my first MMO and the only one that held me more than a few months), so believe me when I say I was as saddened to see it go as anyone, but there seems to be an unwillingness by many to accept the very simple facts about its demise.

Seriously, let it go already.

  Grinnz

Hard Core Member

Joined: 8/24/10
Posts: 286

I just ate your cat!

1/04/13 9:23:54 AM#3
I'm akin to believe they didn't want to fund CoH in light of their newer MMO's coming out, as it's resources could be put forth to maintaining the newer ones.

  Grakulen

Staff Writer

Joined: 3/07/12
Posts: 440

1/04/13 9:27:59 AM#4
There are a lot of people still seeking clarification around some of the financials surrounding the shut down. We had new information and wanted to share it with everyone.
  victorbjr

Advanced Member

Joined: 9/13/10
Posts: 163

1/04/13 9:35:36 AM#5

Victor from Devil's Advocate here. Just wanted to say this was some intriguing reading just on the basis of the thought experiment alone.

 

I'm earnestly hoping for a resurgence of this game in the future though. Here's to hoping,

 

/heroicsalute

A writer and gamer from the Philippines. Loves his mom dearly. :)

Can also be found on http://www.gamesandgeekery.com

  Rthuth434

Novice Member

Joined: 12/26/12
Posts: 367

1/04/13 9:35:43 AM#6

the game was NOT profitable. they were paying more in wages alone than the game pulled in for a few years now

  gandales

Apprentice Member

Joined: 1/12/06
Posts: 465

1/04/13 9:38:38 AM#7
I apologize for my previous writing, I didn't read through the end of the article. It is definitely a decent analysis. I still think that this mystery eventually will be clear out after a few years when it won't matter anymore.

 

 

  erictlewis

Novice Member

Joined: 11/08/08
Posts: 3058

The definition of insanity is doing the same thing over and over while expecting different results.

1/04/13 9:39:05 AM#8

I sit here and wonder, if the game was truly making a profit then why shut it down. Usually you only shut down a game that is going down the toilet. In case we had a few games this year that should have been closed but are still going.

So I am left to wonder why they did this as from what I could tell there were making a profit. So that leads to other questions to why.

  superniceguy

Advanced Member

Joined: 2/17/07
Posts: 2278

NGE, LOTRO, STO, KOTOR, Lego Star Wars > NGE 2 (SWTOR). SWG>ALL. Above hopefully subject to change.

1/04/13 9:40:11 AM#9
Originally posted by Volkanik

I really don't understand the need for the continual dissection of why City of Heroes was closed down.  Look at the player number figures from around Q3 of 2009 and you'll see a steady trend downward.  It was an old game that people gradually stopped playing.  Simple as that.

I played the game for many years (it was my first MMO and the only one that held me more than a few months), so believe me when I say I was as saddened to see it go as anyone, but there seems to be an unwillingness by many to accept the very simple facts about its demise.

Seriously, let it go already.

Seriosuly, your first post is to come on and say that?

This article does help to move on a bit. If this was not written, I think I still would be seriously hating NC Soft, because I strongly believed that it was making a profi, now it is 50/50. There is no confidence in saying whether it was profitable or not now, like it was 30 mins ago.

  niceguy3978

Advanced Member

Joined: 6/14/06
Posts: 1995

1/04/13 9:53:35 AM#10
I could be wrong, but isn't this the first time that NCSoft has come right out and said that the game was not profitable?  Before it seemed like it was just inferred from the fact that the game was shutting down.
  Rthuth434

Novice Member

Joined: 12/26/12
Posts: 367

1/04/13 9:55:15 AM#11
their retention number was bullshit too, people would lapse their membership like crazy in that game and even uninstall it fo r long stretches.
  cmgangrel

Novice Member

Joined: 11/14/07
Posts: 150

1/04/13 9:58:06 AM#12

This complies with to the notion that NCsoft tried to work with Paragon to make things work and keep the game alive, but the Q2 2012 Earnings Report seems to jive with our anonymous friend's claims. CoH seemed to, at least during that window, be bringing in around 3-4 million dollars a month in revenue. 

----------------------------------------------------------------------------------------------------------------------------------

The only part I have a problem with is the above section.

You link to the financial report, and say that it was bringing in $3-$4million per month, when the report that you linked to says that the figure is around $3million per *quarter* (granted, with currency conversions whatever that figure can fluctuate). I calculated it myself (around the time of the closure) that the game was bringing in roughly (at least via the financial reports, in the same fashion that has been used by the players over *multiple* years... ) roughly $2.5million - $3million per quarter, and although it had been semi stable over the past year since freedom, there was still a general downward trend.

The days of it bringing in $3-$4million per month were several years ago, when it was in its early stages of life.

 

  Rthuth434

Novice Member

Joined: 12/26/12
Posts: 367

1/04/13 9:58:49 AM#13
Originally posted by erictlewis

I sit here and wonder, if the game was truly making a profit then why shut it down. Usually you only shut down a game that is going down the toilet. In case we had a few games this year that should have been closed but are still going.

So I am left to wonder why they did this as from what I could tell there were making a profit. So that leads to other questions to why.

it wasn't pulling in any money. Lineage, Lineage 2, AION and Guild Wars were their only profitable games since over a year ago. CoH was breaking even with the cost of paying its developers...this isn't counting other expenses.

  Gishgeron

Advanced Member

Joined: 3/05/07
Posts: 1297

1/04/13 10:04:37 AM#14
Originally posted by erictlewis

I sit here and wonder, if the game was truly making a profit then why shut it down. Usually you only shut down a game that is going down the toilet. In case we had a few games this year that should have been closed but are still going.

So I am left to wonder why they did this as from what I could tell there were making a profit. So that leads to other questions to why.

  Simply making a profit is not enough, thats why.  Your overhead is going to increase each year.  If the game is already on a downward trend, and you have exhausted all your options to try and pull it back into an upward trend, then you have to make choices.  It WAS profitable.  It was getting less profitable each year, while the cost to maintain it was going up.  Before the game began to leech money from other ends of their company, they closed it.  This way they could use that money to help something else, instead of the other way around.

 

  Pheonyx

Novice Member

Joined: 12/03/03
Posts: 8

1/04/13 10:05:29 AM#15

There's two versions of this story... the truth and NC Soft's side. Have you all forgotten that this is the same company that FORGED A RESIGNATION LETTER FROM RICHARD GARRIOTT TO SHUT DOWN TABULA RASA? Sorry, but they only put out that statement to try to save face.

 

Those numbers that source gave seem to be correct, because the costs of the server hardware were paid off by the time City of Villains came about (ie. BEFORE NC Soft bought City of Heroes IP outright). The only costs involved was electricity for them and some staff onsite in Austin, which NC Austin ate anyway because that is where the servers for the US servers for their other games (like Aion) are located. NC Austin didn't lay anyone off when CoH shuttered, they just had a little less work to do.

50K a year average salary per employee is rather high in the gaming industry... try closer to 30K average and you will be closer; 50K average per employee sounds right if you are Blizzard/Activision, not a smaller development house like Paragon Studios/NCSoft.

 

One other thing:

 

...the businessmen at the company decided a more suitable fate was to end the game's life altogether rather than let it become a financial viability and 'wither on the vine' 

 

The businessmen in NCSoft didn't want it to become a "financial viability"? So basically, they didn't want City of Heroes to be successful? Yep, that sounds like NC Soft. Viability is a good thing, not withering on the vine. Of course now, the story will will be edited to put in the negative word, but this is more along the lines of the truth when it comes to NC Soft: The MMO Killer. They'd rather kill the family friendly Western game that was City of Heroes in favor of the adult (ie soft-pr0n) heavily Eastern grind fare that comes in the form of Blade & Soul which I predict correctly will tank spectacularly in the Western market just like Aion did. Aion's US server population is about 40K, but City had 100K. I'm sorry... which game should have been axed?

 
 
 
 

[color=blue]"The coward knows only death; the hero knows only life"- Kakita Toshimoko, Legend of the Five Rings CCG/RPG

  Rthuth434

Novice Member

Joined: 12/26/12
Posts: 367

1/04/13 10:09:30 AM#16
hell, TSW was in danger of closure and they were making a small profit. Funcom itself was making more money this year than last...the game still was not going to work and there's a chance it still won't be around for as long as CoH was...
  Rthuth434

Novice Member

Joined: 12/26/12
Posts: 367

1/04/13 10:11:38 AM#17
Originally posted by Pheonyx

There's two versions of this story... the truth and NC Soft's side. Have you all forgotten that this is the same company that FORGED A RESIGNATION LETTER FROM RICHARD GARRIOTT TO SHUT DOWN TABULA RASA? Sorry, but they only put out that statement to try to save face.

 

Those numbers that source gave seem to be correct, because the costs of the server hardware were paid off by the time City of Villains came about (ie. BEFORE NC Soft bought City of Heroes IP outright). The only costs involved was electricity for them and some staff onsite in Austin, which NC Austin ate anyway because that is where the servers for the US servers for their other games (like Aion) are located. NC Austin didn't lay anyone off when CoH shuttered, they just had a little less work to do.

50K a year average salary per employee is rather high in the gaming industry... try closer to 30K average and you will be closer; 50K average per employee sounds right if you are Blizzard/Activision, not a smaller development house like Paragon Studios/NCSoft.

 

One other thing:

 

...the businessmen at the company decided a more suitable fate was to end the game's life altogether rather than let it become a financial viability and 'wither on the vine' 

 

The businessmen in NCSoft didn't want it to become a "financial viability"? So basically, they didn't want City of Heroes to be successful? Yep, that sounds like NC Soft. Viability is a good thing, not withering on the vine. Of course now, the story will will be edited to put in the negative word, but this is more along the lines of the truth when it comes to NC Soft: The MMO Killer. They'd rather kill the family friendly Western game that was City of Heroes in favor of the adult (ie soft-pr0n) heavily Eastern grind fare that comes in the form of Blade & Soul which I predict correctly will tank spectacularly in the Western market just like Aion did. Aion's US server population is about 40K, but City had 100K. I'm sorry... which game should have been axed?

 
 
 
 

 

 

yet all their reports show aion pulling in more money than CoH.

  spitfire1064

Novice Member

Joined: 12/01/07
Posts: 61

1/04/13 10:12:39 AM#18
Originally posted by niceguy3978
I could be wrong, but isn't this the first time that NCSoft has come right out and said that the game was not profitable?  Before it seemed like it was just inferred from the fact that the game was shutting down.

Ya,Probably. They call this damage control.

This game was making a profit, but look at the overall numbers and you will notice that COH compared to the rest of there games was a pimple on the bootie of a rhino, they had a shift in focus and decided to put there attention in the Asia market and over there COH is not popular at all for they don't get the whole superhero gig anyways.

They were also not prepared for the backlash that cancelling that game brought, that's where the damage control comes in.

  Akais

Novice Member

Joined: 7/07/07
Posts: 268

1/04/13 10:13:16 AM#19

I'm inclined to think of this as an issue or profit margin rather than profit as well.

NCSoft has a history of axing games that don't trend to their expectations when it comes to profit margin. 

What I don't entirely understand is why the game couldn't get sold.

It seems silly to me that NCSoft would turn down any potential profits able to be realized with the sale of a game with an installed and rather loyal fanbase. There are tons of companies that would pay handsomely for this. Likewise,  the IP is so niche that it's highly unlikely NCSoft will ever use it again constructively.

 

  Rthuth434

Novice Member

Joined: 12/26/12
Posts: 367

1/04/13 10:16:28 AM#20
Originally posted by Akais

I'm inclined to think of this as an issue or profit margin rather than profit as well.

NCSoft has a history of axing games that don't trend to their expectations when it comes to profit margin. 

What I don't entirely understand is why the game couldn't get sold.

It seems silly to me that NCSoft would turn down any potential profits able to be realized with the sale of a game with an installed and rather loyal fanbase. There are tons of companies that would pay handsomely for this. Likewise,  the IP is so niche that it's highly unlikely NCSoft will ever use it again constructively.

 

 

...what if EA was looking to buy? i'd rathjer kill it then and most would agree. seriously couldn't have been any decent company looking to take it on. would you want to see a company like Ubisoft or Microsoft run a mmo again?

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