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Graic Valente
Gallente
Valente Galactic Enterprises
Posted - 2011.06.27 22:33:00 - [151]
 

Puts the SOE insta-denial in a little bit more context methinks.

The Pteradactyl
Posted - 2011.06.27 22:33:00 - [152]
 

Worst possible scenario is that Dust fails badly, staff cutting causes WOD to be pushed back years until it becomes irrelevant and eventually dropped. EVE staff(and other costs) are gutted and EVE has to operate with little updating for an extended period of time. At this point I would fear a sale to a bigger fish.

Erichk Knaar
Caldari
Noir.
Noir. Mercenary Group
Posted - 2011.06.27 22:34:00 - [153]
 

ITT: Internet financial experts with deep understanding of the games business.

Cmdr Zander
Posted - 2011.06.27 22:34:00 - [154]
 

great idea... they practically invested too much money without success and they are killing their cash cow (EVE) trying to repay their mistakes so they can fail even more.

EPIC FAIL

diaufop
Posted - 2011.06.27 22:36:00 - [155]
 

Edited by: diaufop on 27/06/2011 22:39:56
Edited by: diaufop on 27/06/2011 22:38:44
Originally by: gdjghjhgjfh
what I see after costs, subs adding $$, and employee stock/pay is $11,000,000 surplus. Whats the problem?


The fact that they have a $11,800,000 loan repayment coming up in October. I think a lot of the :doom: in this thread is blown out of proportion, but this is more than likely the root cause of the massive panic from CCP when people mass-unsubscribed over the weekend.

Tahnil
GNADE Inc.
Posted - 2011.06.27 22:38:00 - [156]
 

This community puzzles me. Shocked

You're falling for a mud campaign of some disgruntled employees and bitter veterans, who use the first suitable moment for an all-out attack against CCP. On top the amateur media like failheap and evenews24 publish every piece of stupidity and half-truth, just for their 15 minutes of fame. And everybody seems to tune in by trying to find the next sensational interpretation or half truth.

As of this moment, you're destroying the very foundations of this community in some kind of lust for doom. This is malicious gossip, even if some bits of truth can be found in this discussion.

This is insane. Confused

Vincentus
Posted - 2011.06.27 22:39:00 - [157]
 

Originally by: gdjghjhgjfh
what I see after costs, subs adding $$, and employee stock/pay is $11,000,000 surplus. Whats the problem?


Answers:

Originally by: Vincentus
Edited by: Vincentus on 27/06/2011 20:44:36
Edited by: Vincentus on 27/06/2011 20:44:04
Very interesting read. Had been looking for this but could only find some basic 2008 figures. After a quick glance, I'd say the most telling things are that (in no particular order):

- revenue gone up with 6M, to 57M
- the called in the partly paid shares last year, adding another 16M in cash (without it, they would have negative cash of 5M...)
- their liabilities are 4M higher than their assets, while last year they had a surplus of 6M in assets (note that by far the highest asset is development)
- Salaries risen by 8M, average number of positions for 2010 doesn't even take into account all the new employees (558 vs 603), so are probably even higher this year.
- 23M in development cost, which is 50% of their revenue

Strapped for cash?

Graic Valente
Gallente
Valente Galactic Enterprises
Posted - 2011.06.27 22:39:00 - [158]
 

Originally by: Erichk Knaar
ITT: Internet financial experts with deep understanding of the games business.
I worked for a finance company for ten years and have been playing computer games for around 25 years with a brief stint working at a gaming company.

So you are correct. ;)

Mindseamstress
Gallente
Jovian Labs
Jovian Enterprises
Posted - 2011.06.27 22:42:00 - [159]
 

Originally by: diaufop
Edited by: diaufop on 27/06/2011 22:38:44
Originally by: gdjghjhgjfh
what I see after costs, subs adding $$, and employee stock/pay is $11,000,000 surplus. Whats the problem?


The fact that they have a $11,800,000 loan repayment coming up in October. I think a lot of the :doom: in this thread is blown out of proportion, but this is more than likely the root cause of the massive panic from CCP when people mass-unsubscribed over the weekend. If the status quo had carried on, not a problem. But losing any substantial number of subs could put them into financial problems, hence the emergency meeting with CSM and likely (lies) backpedalling over pay-to-win. They can't afford to lose too many subs without investors asking hard questions.


True, if the outlook for Eve is stable though you just roll over the loan. It's no big deal - cos do it all the time. Except... credit is still tight now and with Greek sov debt issues looming the refinancing could coincide with credit crunch nr 2.

diaufop
Posted - 2011.06.27 22:42:00 - [160]
 

Originally by: Tahnil
stupidity and half-truth

You are aware that these are CCP's official books, coming from Iceland's equivalent of the IRS? If ther are any half-truths in this document, they're coming from CCP themselves.

Smoking Blunts
Posted - 2011.06.27 22:44:00 - [161]
 

Originally by: Tahnil
This community puzzles me. Shocked

You're falling for a mud campaign of some disgruntled employees and bitter veterans, who use the first suitable moment for an all-out attack against CCP. On top the amateur media like failheap and evenews24 publish every piece of stupidity and half-truth, just for their 15 minutes of fame. And everybody seems to tune in by trying to find the next sensational interpretation or half truth.

As of this moment, you're destroying the very foundations of this community in some kind of lust for doom. This is malicious gossip, even if some bits of truth can be found in this discussion.

This is insane. Confused


thought the stuffs on en24 have been confimed by ccp. in a blog,might be wrong about that one though...
ccp need to get there heads out of there ass and relise that unless they take steps to fix the broken expansion (they said CQ would be optional, and it dam well should be)and confirm MT will not lead to in game advantages. there cash cow is gonna dry up.
ccp are the ones distroying the very foundations of this community

diaufop
Posted - 2011.06.27 22:45:00 - [162]
 

Originally by: Mindseamstress

True, if the outlook for Eve is stable though you just roll over the loan. It's no big deal - cos do it all the time. Except... credit is still tight now and with Greek sov debt issues looming the refinancing could coincide with credit crunch nr 2.

Yeah, if the subs number had remained stable (or even seen a bit of an increase due to a much-awaited expansion), I believe CCP would have no problem rolling over the loan. In fact, I personally expect them to be able to work out a deal even if they do lose a few thousand subs. But this thread is supposed to be about :doom: so....there is a *chance* that this could go catastrophically badly.

MaiLina KaTar
Posted - 2011.06.27 22:46:00 - [163]
 

Don't count chickens before they hatched. If WoD / Dust don't fail they'll probably be in the green. So to make any sort of substantial analysis you'd have to wait and see how they perform.
If anything, the report shows that the Eve community is paying for a whole bunch of **** that isn't Eve. You make up your own mind about that.

Vincentus
Posted - 2011.06.27 22:46:00 - [164]
 

Originally by: Mindseamstress
Originally by: diaufop
Edited by: diaufop on 27/06/2011 22:38:44
Originally by: gdjghjhgjfh
what I see after costs, subs adding $$, and employee stock/pay is $11,000,000 surplus. Whats the problem?


The fact that they have a $11,800,000 loan repayment coming up in October. I think a lot of the :doom: in this thread is blown out of proportion, but this is more than likely the root cause of the massive panic from CCP when people mass-unsubscribed over the weekend. If the status quo had carried on, not a problem. But losing any substantial number of subs could put them into financial problems, hence the emergency meeting with CSM and likely (lies) backpedalling over pay-to-win. They can't afford to lose too many subs without investors asking hard questions.


True, if the outlook for Eve is stable though you just roll over the loan. It's no big deal - cos do it all the time. Except... credit is still tight now and with Greek sov debt issues looming the refinancing could coincide with credit crunch nr 2.


Well, no, they wouldn't just roll over the lone, because the companies costs are way higher than what is coming in in cash. They only state a profit because of some accounting rules (technical), they are actually burning 8M+ per year. You have to put on a very good show with lots of love for investors to get them to finance that.

Dero Grey
Posted - 2011.06.27 22:48:00 - [165]
 

I'm wondering, If CCP doesn't make things right with the upset player base couldn't the players with stockpiled PLEX's turn around and hand them out like crazy to people who would use them for game time to try and effect CCP's sub income? That could turn out really bad and basically bankrupt them right?

Larissa Sunsorrow
Posted - 2011.06.27 22:48:00 - [166]
 

from the other forum:

Quote:
Fairly bog standard set of IFRS accounts however there are some very interesting things going on here. CCP have made reasonable profits for each of the last two years, $5.4m and $6.0m. They have also managed to increase their cash reserves by about $6.5m during 2010. Also they have settled a loan that was hanging over their heads. Not too bad at first glance. Alarm bells start ringing to me on page 21 (I must admit that I skimmed the first few pages as numbers confuse me sometimes - reading the notes to accounts is often much more interesting). CCP are spending around $30m on staff costs and capitalising more than half of them circa $16m. What does this mean? It means that any capitalised costs are being dumped into the balance sheet and not being immediately recognised in the profit and loss acount. This in itself isn't illegal by earmarking it as research and development cost. But it is a whopping amount. I then turned my attention back to the balance sheet. These R&D assets total $54m and are being released to the P&L over four years. "Amortization of capitalized development cost in 2010 is almost exclusively due to EVE Online" - presumably this represents the investment in Incarna/Dust. Now the catch with these kind of capitalised labour costs is that an impairment test must be done every year. Sounds more technical than it is; in practice it means that if a project is no longer viable then the company would no longer be entitled to carry on its balance sheet any capitalised costs. If this were to happen to CCP, then the consequences would be disastrous all those profits would be wiped out and the company would be technically insolvent. So it does take a lot to imagine what kind of pressure the auditors would exert (if they have any integrity) once subscriber numbers start dropping... I turned my attention back to the cashflow statement. The company's operating cash flow is actually negative. The cash it has generated during the year has mainly come from new share issues. In fact the loan appears to have been settled via some kind of stock issue. It's all very well having $11m of cash in the bank but it you are ****ing it away at $7.4m per year you arent going to be in business long. So without being able to see what has happened so far in 2011, I would say alot is riding on the success of the Incarna and Dust 514. It would be interesting to see how much, if anything, Sony have paid for the exclusive licensing of Dust. If Incarna fails and/or if Dust gets delayed then it could be curtains for CCP.

Erinyes Nazgul
Posted - 2011.06.27 22:48:00 - [167]
 

Looks like they are doing really well. They have Dust coming out in a year plus whenever WoD is released.... 2 upcoming games and relatively little debt comparatively, that's awesome...

Mister Smithington
Posted - 2011.06.27 22:49:00 - [168]
 

This actually makes a lot of sense.

If the thread keeping track of cancelled accounts is anywhere near accurate, my sloppy math says CCP needs to sell 1.6 monocles per hour, every day of every month for as long as those accounts would have been subbed. That's more monocles per hour than they sold in their initial offering, according to Hilmar's email (52 monocles in 40 hours). In other words, their current MT model cost them more money in cancelled subs than they're making on sales. Restating for Emphasis: CCP knows their current MT model has failed.

This brings the emergency CSM meeting into a whole new light. Hopefully the focus of this meeting will be how to bring those subs back (and I have a strong hunch that most of them will resub if CCP gets their act together), and what they can offer for MT that will be in high demand, that won't break the sandbox or be otherwise game effecting (gold ammo), and what price it can be sold at such that it will sell in mass quantities. The CSM and the community has CCP by the balls. We can bail out CCP, but only if they show us a product we're interested in consuming.

Also, a quick note on the plex issue:

Because Plex is a legalized form of RMT, the limiting factor is the isk demand of those willing to pay real money for it. Even if every plex were redeemed tonight, tomorrow there would be more on the market so long as the Isk demand still exists. CCP doesn't have to worry too much about that plex revenue being redeemed at some point in the future, because even if it is, it only opens room in the market for more.

Mindseamstress
Gallente
Jovian Labs
Jovian Enterprises
Posted - 2011.06.27 22:51:00 - [169]
 

Originally by: Vincentus
Originally by: Mindseamstress
Originally by: diaufop
Edited by: diaufop on 27/06/2011 22:38:44
Originally by: gdjghjhgjfh
what I see after costs, subs adding $$, and employee stock/pay is $11,000,000 surplus. Whats the problem?


The fact that they have a $11,800,000 loan repayment coming up in October. I think a lot of the :doom: in this thread is blown out of proportion, but this is more than likely the root cause of the massive panic from CCP when people mass-unsubscribed over the weekend. If the status quo had carried on, not a problem. But losing any substantial number of subs could put them into financial problems, hence the emergency meeting with CSM and likely (lies) backpedalling over pay-to-win. They can't afford to lose too many subs without investors asking hard questions.


True, if the outlook for Eve is stable though you just roll over the loan. It's no big deal - cos do it all the time. Except... credit is still tight now and with Greek sov debt issues looming the refinancing could coincide with credit crunch nr 2.


Well, no, they wouldn't just roll over the lone, because the companies costs are way higher than what is coming in in cash. They only state a profit because of some accounting rules (technical), they are actually burning 8M+ per year. You have to put on a very good show with lots of love for investors to get them to finance that.


It's normal to be cash flow negative when you develop software. The 8m they burn a year can also be axed at any time since they just have to downsize. What investors look at is growth and value creation. Creditors will to a great degree do the same but may collateralise their lending with co assets or shares. Eve is worth a fair bit (maybe $300-500m) so 8m is no big deal in the grand scheme of things.



Adunh Slavy
Ammatar Trade Syndicate
Posted - 2011.06.27 22:53:00 - [170]
 

Edited by: Adunh Slavy on 27/06/2011 22:54:26
Originally by: Holy One

Seriously, I think Hilmar and co. have probably spent more hours playing eve than I did getting my Phd. Shocked


Maybe they stopped, and lost sight of it? Paying their own subs too would be helpful, get the full customer experience. Hell, rant at CCP as an alt and wait for some feed back.

Henry V, the night before battle, in camp as a commoner - He may have had better perception about _very predictable behavior_.

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2011.06.27 22:54:00 - [171]
 

Originally by: Cipher Jones
Originally by: Lug Thorne
So really their short term financial future depends on keeping Eve going?


Looks like they need to repay 11 mil by or on 10-28-11. With an profit of 5-6 mil a year, have fun with that.

80 dollar monocle indeed.



If you check the huge PR, the leaked mail stating how "Incarna = best patch EVER" and all the other positive spin, you can only understand that they asked for another financing and want to show the perspective investors tangible and visible "results" shown as the best thing ever.

They NEED to show off Incarna as good, they NEED to make it compulsory, it's all the guarantee they can show to potential new investors.

Lyra Blazing
Posted - 2011.06.27 22:54:00 - [172]
 

Sometimes i hate to be right but it seems CCP are going to be broke. And they only have them self to blame for :)

http://www.eveonline.com/ingameboard.asp?a=topic&threadID=1534341

Hopefully some good company is buying the eve code from whats left from CCP. Maybe then we might be able to resub.


Asmodeus Et'Mort
Amarr
Imperial Academy
Posted - 2011.06.27 22:55:00 - [173]
 

So one question to all you accounting boffins out there, Isnt plex a liability to the company that should be included in these figures? Havent CCP already been paid RL cash thats been accounted for in these figures but have yet to provide the service? So Im just asking if the value of plex in the game counts as an official accounting liability?

Does that make it better or worse? sorry im an historian i have no concept of figures other than dates!

Cipher Jones
Minmatar
Posted - 2011.06.27 22:55:00 - [174]
 

Originally by: Tahnil
This community puzzles me. Shocked

You're falling for a mud campaign of some disgruntled employees and bitter veterans, who use the first suitable moment for an all-out attack against CCP. On top the amateur media like failheap and evenews24 publish every piece of stupidity and half-truth, just for their 15 minutes of fame. And everybody seems to tune in by trying to find the next sensational interpretation or half truth.

As of this moment, you're destroying the very foundations of this community in some kind of lust for doom. This is malicious gossip, even if some bits of truth can be found in this discussion.

This is insane. Confused


So you read the financial report then? Yes/No Circle one. Thought so, thanks for your opinion.

kestrael nanahara
Caldari
Wrecking Shots
Wildly Inappropriate.
Posted - 2011.06.27 22:57:00 - [175]
 

Originally by: The Pteradactyl
Worst possible scenario is that Dust fails badly, staff cutting causes WOD to be pushed back years until it becomes irrelevant and eventually dropped. EVE staff(and other costs) are gutted and EVE has to operate with little updating for an extended period of time. At this point I would fear a sale to a bigger fish.


You know ive been an apologetic for CCP for a long time. But im going to say something... EVE HAS BEEN OPERATING WITH LITTLE UPDATING FOR AN EXTENDED PERIOD OF TIME.

Mindseamstress
Gallente
Jovian Labs
Jovian Enterprises
Posted - 2011.06.27 22:57:00 - [176]
 

Originally by: Asmodeus Et'Mort
So one question to all you accounting boffins out there, Isnt plex a liability to the company that should be included in these figures? Havent CCP already been paid RL cash thats been accounted for in these figures but have yet to provide the service? So Im just asking if the value of plex in the game counts as an official accounting liability?

Does that make it better or worse? sorry im an historian i have no concept of figures other than dates!


It is an "accrual" technically speaking, i.e. cash received for services not rendered. A liability should be recognised on the balance sheet for this.

Soji Kanagawa
Posted - 2011.06.27 22:57:00 - [177]
 

I say cancel WOD and Dust...I would much rather they focus 100% of their time on the EVE Universe anyway :)

Vaerah Vahrokha
Minmatar
Vahrokh Consulting
Posted - 2011.06.27 22:59:00 - [178]
 

Originally by: Tahnil
This community puzzles me. Shocked


As of this moment, you're destroying the very foundations of this community in some kind of lust for doom. This is malicious gossip, even if some bits of truth can be found in this discussion.

This is insane. Confused


No, this is what EvE teaches people to become. Lusty bast4rds.

Cold, harsh, hypercapitalistic world where everyone are out to get YOU.

So here, they got it.

Aleria Angelis
Eleutherian Guard
Posted - 2011.06.27 22:59:00 - [179]
 

Wow thanks for the information, this would explain the way CCP's been acting lately.

If it came to selling WoD or Dust I can see why they've chosen MTs, like other people have said; a little transparency and honestly would have gone along way.

Markus Jome
Posted - 2011.06.27 23:07:00 - [180]
 

Edited by: Markus Jome on 27/06/2011 23:09:16
I don't see the connection between the Vanity Store and CCPs financial situation. It's easy to say "they sell monocles because they need money", but noone in CCP could think that they could sell even remotely enough monocles to solve their financial problems (8 mio loss per year -> 100k+ monocles per year). In other numbers: everyone of the 300k plus subscribers would have to buy stoff worth more than 25 dollar per year.


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