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Spec Builder
Posted - 2011.08.10 20:41:00 - [1]
 

I'm not sure why the Eve community thinks CCP is not doing well financially but when I reviewed the leeked Balance Sheet and P+L they had a profit of about $10 million. You have to understand the goal of most small companies is to show as little as possible profit because corporations pay higher taxes than individuals, typically. I know this applies to the US for sure. As I recall they had approx $8 million in depreciation in 2010. This is a paper writeoff, ie. profit. I am at work now and I don't have the pdf version of the sheets here with me but I would hardly say they are hurting for money, new players maybe but not money. With all the fuss about that document I'm a bit surprised CCP CFO or of similar rank hasn't set the community straight.

Kijo Rikki
Caldari
Point of No Return
Waterboard
Posted - 2011.08.10 20:42:00 - [2]
 

Link to said leak?

Also, a 70$ monocle says someone is hurting for profits.

Spec Builder
Posted - 2011.08.10 20:45:00 - [3]
 

I'll see if I still have it on my laptop at home but I'm sure there are still peeps with the link.

And I would hardly say selling a monicle for $70 shows CCP is hurting for cash but what it does show is that some of the players in Eve have a lot of disposable income to waste on items that don't help you in game.

Kijo Rikki
Caldari
Point of No Return
Waterboard
Posted - 2011.08.10 20:51:00 - [4]
 

I believe they are hurting for profits. First they nerfed 0.0 sanctums which, in the end, will either force people to work much harder to replace ship losses or buy a GTC, which I believe was the true intent. Second, AT9 was a joke this year. Third, an MT program that is by and large ridiculous compared to any other sane MMO.

But you're right, the handful of you who actually play this game are apparently not adverse to throwing away money that could have been spent on more productive venues, like hookers or blow.

Spec Builder
Posted - 2011.08.10 21:01:00 - [5]
 

Well, what you believe isn't supported by the financial facts of the balance sheet and P+L. As far as nerfing 0.0, the huge infux of isk has been an issue for some time. 1bil used to mean something. Now it's something you can attain in a day or so or from buying 3 plexes. You used to have to work hard to attain wealth in this game but now you can just buy a plex or have 0.0 access and rake in the iskies. I guess Eve has succomed to the "fast food" metality. I want what I want right now and I don't want to have to work hard to get it. I want to be able to drive, get the goods and leave.

Bootleg Jack
Potters Field
Posted - 2011.08.10 21:14:00 - [6]
 

They have never been hurting, the entire rumor was nothing more than wishfull thinking by petty people who did not get their way and needed a little emo payback Laughing

Jovan Geldon
Gallente
Lead Farmers
Kill It With Fire
Posted - 2011.08.10 21:18:00 - [7]
 

Look on Failheap and you can find the thread analysing the statement (someone fetched it from the public records office in Reykjavik, it wasn't "leaked").

To cut a long story short, EVE is a very profitable venture and has been for a number of years, but the development of DUST 514 and the WoD MMO are causing CCP to lose money hand over fist. In fact they would have gone bankrupt this month if they hadn't been able to refinance (although that wouldn't be difficult, considering the figures they can produce about how profitable EVE is).

This is the root cause of this "microtransaction" gubbins. Clothes and suchlike are much more profitable (not to mention easier and quicker to produce) than much-needed changes to soverignty grind mechanics and POS interfaces and other such annoyances, so no-one should be surprised that *that* is where they are focusing their efforts.

Basically, CCP wants all your $$$ to belong to them so they can finish their derivative console FPS and vampire dress-up MMO. I make no comment on the ethics of such an attitude, I merely point out its existence.

Iggy Stooge
Gallente
Federal Navy Academy
Posted - 2011.08.10 21:46:00 - [8]
 

CCP need to show that they can further monetize their current assets (Eve), so that they can borrow money to develop other assets.

Red Maiden
Gallente
Aliastra
Posted - 2011.08.10 22:11:00 - [9]
 

Originally by: Kijo Rikki
But you're right, the handful of you who actually play this game blah blah blah.


There are plenty of people who still play this game. Whenever I log in, there are usually 40K people on. I guess we have different definitions of "handful". Troll on!

U vula
Posted - 2011.08.10 23:56:00 - [10]
 

IDK, the OP might be on to something.

Evidently, CCP employees routinely pay $1000 for jeans, so how bad can it really be for them?

Joe Skellington
Minmatar
Matari Legion Holding
Matari Legion
Posted - 2011.08.11 00:06:00 - [11]
 

Edited by: Joe Skellington on 11/08/2011 00:07:59
Originally by: U vula
IDK, the OP might be on to something.

Evidently, CCP employees routinely pay $1000 for jeans, so how bad can it really be for them?


$1000 Jeans

I think I saw a few pics of CCP devs in these Jeans.

Windjammer
Gallente
Posted - 2011.08.11 00:07:00 - [12]
 

Beg all you want. You’ll only be different.

In depth analysis by a couple of fairly well educated people in the business world indicates a different conclusion than your own. These came out soon after the document was released. CCP needs to get that loan.

If you want to argue with them, dig up the threads and post your opinion. It’s unlikely those people are going to come back and point out the flaws in your argument at this late date.

It should be obvious why CCP’s CFO isn’t going to come onto these forums and discuss this issue.

Alxea
Posted - 2011.08.11 00:16:00 - [13]
 

Originally by: Kijo Rikki
Link to said leak?

Also, a 70$ monocle says someone is hurting for profits.

The login average has been about the same for the past year, give or take some up spikes. That doesn't say they are losing anything more like gaining. I call troll.Rolling Eyes

Kijo Rikki
Caldari
Point of No Return
Waterboard
Posted - 2011.08.11 00:39:00 - [14]
 

Right, its not like they're trying to develop another game or anything expensive like that. And its certainly not possible for server costs to increase with local currency inflation.

Originally by: Red Maiden
Originally by: Kijo Rikki
But you're right, the handful of you who actually play this game blah blah blah.


There are plenty of people who still play this game. Whenever I log in, there are usually 40K people on. I guess we have different definitions of "handful". Troll on!


We all know those are just Cribba's alts. Rolling Eyes

In all seriousness, I believe someone gave a number of 250k actual subscribers. Not actual people, mind you, just accounts... since it seems like everyone I know has 2 - 5 accounts of their own. At 15$ that's 3.75m per month. Now somewhere I read it costs an average of 1k to maintain a server, and EvE runs on blade servers for each solar system (perhaps 5k plus?). Being blade servers, it probably costs alot less to run but still, it seems they would be about breaking even after paying their employees, bandwidth etc. And they're currently developing a very complex FPS that will interact with EvE....your typical console game takes about 10 mil to produce.

Anywho, that's all guessing. But it is hard to ignore the monocle. The outrageous price smacks of desperation. That's not trolling, thats an honest opinion. BTW, where is this link?

Herping yourDerp
Posted - 2011.08.11 01:01:00 - [15]
 

R&D for WOD and Dust 514 are probably equal or greater then Eves profit.

Pax Infinitas
Posted - 2011.08.11 01:12:00 - [16]
 

Originally by: Spec Builder
I'm not sure why the Eve community thinks CCP is not doing well financially but when I reviewed the leeked Balance Sheet and P+L they had a profit of about $10 million. You have to understand the goal of most small companies is to show as little as possible profit because corporations pay higher taxes than individuals, typically. I know this applies to the US for sure. As I recall they had approx $8 million in depreciation in 2010. This is a paper writeoff, ie. profit. I am at work now and I don't have the pdf version of the sheets here with me but I would hardly say they are hurting for money, new players maybe but not money. With all the fuss about that document I'm a bit surprised CCP CFO or of similar rank hasn't set the community straight.


The reason no one has set the community straight is that there is nothing really to set straight.

Look up the discussion on FHC if you'd like, but the fundamental issue is burn rate. They show a profit because they (rightfully) capitalize their development costs. Cash that they spend on development of Dust and WoD doesn't leave as an expense. Rather, that cash is transformed into non-liquid assets: namely, Dust and WoD. Why is this important? Because as of the last statement I saw (FY2010), they spent $8 million more than they brought in via revenues.

One of the hardest things to wrap your head around in the finance and accounting world is that it's entirely possible for a company to encounter a liquidity crisis (read: run out of money) while showing a profit. It happens every day. I've helped to wind down a couple of those companies. Don't make the mistake of confusing "profitability" with "viability" or "liquidity" or "healthy".

Now, CCP is actually not in a horrible position. They're not carrying a tremendous amount of debt and they could probably go another round (maybe two, but that's iffy) of raising capital via equity before investors start screaming. They are, however, in an area where the warning bells should be going off internally. They face 2 problems.
  1. Eventually they're not going to be able to raise more capital. This isn't a huge issue if they're close to completing their projects. It's problematic if they're not showing significant progress in bringing Dust and WoD to market. Having unfinished products when the capital faucet gets turned off is a disaster.
  2. They may not want to become too leveraged in case Dust goes the way of APB and WoD goes the way of Uru. Then, instead of funding their next project via EVE's success they're paying people they owe and CCP becomes yet another one-hit wonder.


So is CCP on the brink of financial ruin? No. In fact, given their behavior as of late they're a lot better off than I originally gave them credit for. But the warning bells at CCP HQ should be going off and I think they are going off. I think MT is a direct response to those warning bells going off. Agree or disagree that's the course they chose to take. It may end up as an F2P/P2W fiasco with CCP going down in flames. It could also end up giving them just the shot in the arm they need, too. It's all in how they play it and all in how the EVE playerbase reacts. It also will be affected by the viability and success/failure of Dust and WoD.

Me? I'll keep playing eve until it goes P2W or becomes unplayable. I wish CCP the best with Dust (won't play an FPS on a console) and WoD (not interested in Emo Teen Vampires Online). Hopefully, they'll heed some of those warning bells that are going off, though.

J Kunjeh
Gallente
Posted - 2011.08.11 01:42:00 - [17]
 

Originally by: Kijo Rikki

In all seriousness, I believe someone gave a number of 250k actual subscribers. Not actual people, mind you, just accounts... since it seems like everyone I know has 2 - 5 accounts of their own. At 15$ that's 3.75m per month.



The number is around 350k paying accounts which are owned by about 250k or so real players. That's just off the top of my head though.

J Kunjeh
Gallente
Posted - 2011.08.11 01:44:00 - [18]
 

Originally by: Pax Infinitas
astute analysis


Excellent explanation and analysis. +100 Eve's to you.

Akita T
Caldari Navy Volunteer Task Force
Posted - 2011.08.11 02:19:00 - [19]
 

Originally by: J Kunjeh
Originally by: Kijo Rikki
In all seriousness, I believe someone gave a number of 250k actual subscribers. Not actual people, mind you, just accounts... since it seems like everyone I know has 2 - 5 accounts of their own. At 15$ that's 3.75m per month.

The number is around 350k paying accounts which are owned by about 250k or so real players. That's just off the top of my head though.

More like 375k paid accounts and a guesstimated 300k owners.
The key bit here being that people with multiple accounts tend to be the more active kind, and also cluster around with more people with multiple accounts, so whenever you encounter such an "active player pocket" you do get the impression that "everybody seems to have 2-5 accounts", when the average is more like 1.25 accounts per person or thereabouts.

Asuri Kinnes
Caldari
Adhocracy Incorporated
Posted - 2011.08.11 02:43:00 - [20]
 

Edited by: Asuri Kinnes on 11/08/2011 02:46:24
Originally by: J Kunjeh
Originally by: Kijo Rikki

In all seriousness, I believe someone gave a number of 250k actual subscribers. Not actual people, mind you, just accounts... since it seems like everyone I know has 2 - 5 accounts of their own. At 15$ that's 3.75m per month.



The number is around 350k paying accounts which are owned by about 250k or so real players. That's just off the top of my head though.

I thought the last QEN said that the average is 2.2 accounts / player.

Akita T
Caldari Navy Volunteer Task Force
Posted - 2011.08.11 03:10:00 - [21]
 

Originally by: Asuri Kinnes
I thought the last QEN said that the average is 2.2 accounts / player.

Characters/account, IIRC. Which is obviously something different.

Tippia
Caldari
Sunshine and Lollipops
Posted - 2011.08.11 03:13:00 - [22]
 

Originally by: Asuri Kinnes
I thought the last QEN said that the average is 2.2 accounts / player.
No, I don't think they've ever given any kind of number on that one. They do tend to provide a characters per account stat, which is usually in that area.

Oh, and another comment on the whole economic state of CCP: I'm fairy convinced that the NeX is not about making money, or they would have put perishable goods in there at normal MT prices. Instead, it's a tool for them to reduce liability by removing PLEX (or, more specifically, the deferred service they represent) from the economy and thus remove service debt from their books.

It's perhaps not as good as “real money”, but it has a number of other accounting advantages which makes it worth-while for them to pursue, and it also gives them a better position if they ever want to raise more capital for… ehm… extra-curricular pursuits…

Monstress
Posted - 2011.08.11 03:14:00 - [23]
 

Hai gaiz I read CCP's financial statements for the PREVIOUS fiscal year I'm so leet I have determined CCP is going broke because of financial statements from LAST YEAR. CCP is so incompetent they haven't secured more investments/loans since then! ZOMG IS TRUE?

Tippia
Caldari
Sunshine and Lollipops
Posted - 2011.08.11 03:19:00 - [24]
 

Originally by: Monstress
Hai gaiz I read CCP's financial statements for the PREVIOUS fiscal year I'm so leet I have determined CCP is going broke because of financial statements from LAST YEAR. CCP is so incompetent they haven't secured more investments/loans since then! ZOMG IS TRUE?
We'll see next year…

…because you're not implying that there's anything strange about it being last year's statement, I hope?

Stella SGP
The Kimotoro Initiative
Posted - 2011.08.11 03:28:00 - [25]
 

Edited by: Stella SGP on 11/08/2011 03:31:09
Originally by: Kijo Rikki
Link to said leak?

Also, a 70$ monocle says someone is hurting for profits.


Lol? Louis Vuitton must be DYING for profits then?

Edit - Let's keep it to vanity items only.

Monstress
Posted - 2011.08.11 03:35:00 - [26]
 

Originally by: Tippia
Originally by: Monstress
Hai gaiz I read CCP's financial statements for the PREVIOUS fiscal year I'm so leet I have determined CCP is going broke because of financial statements from LAST YEAR. CCP is so incompetent they haven't secured more investments/loans since then! ZOMG IS TRUE?
We'll see next year…

…because you're not implying that there's anything strange about it being last year's statement, I hope?


I do hope we see next year's statements, if someone is kind of enough to pay for the documents. I'd be pretty damn surprised if CCP hasn't received an investment from Sony or loans elsewhere.

Nothing strange about the fact that they're from last year, just wanted to throw a clue to the people who've been fixed on the idea that those statements represent CCP's current position.

Tippia
Caldari
Sunshine and Lollipops
Posted - 2011.08.11 03:45:00 - [27]
 

Originally by: Monstress
Nothing strange about the fact that they're from last year, just wanted to throw a clue to the people who've been fixed on the idea that those statements represent CCP's current position.
It provides enough to give a clue about their current position…

…and there are some concerns with where it's going.

Kijo Rikki
Caldari
Point of No Return
Waterboard
Posted - 2011.08.11 03:55:00 - [28]
 

Originally by: Stella SGP
Edited by: Stella SGP on 11/08/2011 03:31:09
Originally by: Kijo Rikki
Link to said leak?

Also, a 70$ monocle says someone is hurting for profits.


Lol? Louis Vuitton must be DYING for profits then?

Edit - Let's keep it to vanity items only.


I don't know who Louis Vuitton is but after gandering at his website I think its safe to assume that its very high end clothing and he must be a world renowned designer. You're comparing his products to a non-existent one that costs more than actual clothing us normies buy from the local department store. While it may seem asinine to pay 450$ for an actual belt, its still a far cry from paying 70$ for a digitized monocle.

I think the analogy you need to put in your head is if Farmville started selling golden sheep or something for 70$. Then you'd have to ask yourself 'Why?'

Gratianus Augustus
Posted - 2011.08.11 06:15:00 - [29]
 

CCP have no need for customers apart from to hide transactions in the noise.

Unlike legit business where cashflow matters, for CCP it's just smoke and mirrors.

Stella SGP
The Kimotoro Initiative
Posted - 2011.08.11 06:23:00 - [30]
 

Originally by: Kijo Rikki
Originally by: Stella SGP
Edited by: Stella SGP on 11/08/2011 03:31:09
Originally by: Kijo Rikki
Link to said leak?

Also, a 70$ monocle says someone is hurting for profits.


Lol? Louis Vuitton must be DYING for profits then?

Edit - Let's keep it to vanity items only.


I don't know who Louis Vuitton is but after gandering at his website I think its safe to assume that its very high end clothing and he must be a world renowned designer. You're comparing his products to a non-existent one that costs more than actual clothing us normies buy from the local department store. While it may seem asinine to pay 450$ for an actual belt, its still a far cry from paying 70$ for a digitized monocle.

I think the analogy you need to put in your head is if Farmville started selling golden sheep or something for 70$. Then you'd have to ask yourself 'Why?'


You main issue here is overpricing of items, regardless of whether it is virtual or real, the concept remains the same.

PFFFT! Monocles and Golden Sheeps are NOTHING!


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