GW2 - NCSoft 3Q '13 Earnings Report

[Sharuko]

Just listened to the NCSoft call as it relates to all their MMOs all the info is available here including the PDF and the stream of the audio. Here are the GW2 results:

• GW2 dropped 15% in revenue from 2Q '13 to 3Q '13 ($27.1 million dollars to $22.9 million dollars)
• GW2 had a Chinese closed beta in May '13 and Sept '13.
• GW2 was supposed to release in China during 4Q '13 but that is delayed.
• Too early to talk about a GW2 expansion next year as they are first focusing on a Chinese release.
• GW2 will only look into launching in Korea after Chinese launch and if they see visible results in China.

B&S seems to be a massive success in China during CBT. They are adding "one server a day". Seeing a lot of queues. And they are already making money from B&S in China during beta. It was hinted that the success of B&S in China might be the reason for the delay of GW2 in China.

If you are interested in listening the the audio stream in English, the Q&A session which my info comes from is about mid way into the stream. The revenue information is on the PDF itself.

http://www.ncsoft.net/global/ir/earnings.aspx

[Angarin]

I thought gw2 didn't want to have an expansion because of living world content?

[Sharuko]

I thought gw2 didn't want to have an expansion because of living world content?

Someone asked about an expansion, they skirted around the issue by saying they want to focus on Chinese release first. Don't think you guys will see it next year.

[Angarin]

Someone asked about an expansion, they skirted around the issue by saying they want to focus on Chinese release first. Don't think you guys will see it next year.

Ah ok.

I thought I read an article about it, but I guess they changed their mind.

I hope it includes perhaps the ritualist or dervish =/

[Svifnymr]

Anet says "no plans for expansion", NCSoft tells shareholders they're "thinking about an expansion". Just corporate double speak.

[Angarin]

Anet says "no plans for expansion", NCSoft tells shareholders they're "thinking about an expansion". Just corporate double speak.

Ah I see

10char

[zito]

GW2 dropped 15% in revenue from 2Q '13 to 3Q '13 ($27.1 million dollars to $22.9 million dollars)

GW2 as in just the box? Or including the cash shop?

[Valeron]

it's total revenue so that is including everything

but they report that the cash shop sales is stable so what it really means is a drop in box sales

makes sense as that happens with all up front purchase games. of course an expansion is the typical way of getting more box sales but they are trying a different strategy. It will be interesting to see if that works in the long haul. I think we'll have to wait until after the Chinese release before making any concrete judgements on the strategy.

[Meledelion]

40bucks a copy would mean that in four months they sold 675k copies in Q2 which is a lot.

They would've sold another 575k copies in Q3 which is unlikely.

[zito]

40bucks a copy would mean that in four months they sold 675k copies in Q2 which is a lot.

They would've sold another 575k copies in Q3 which is unlikely.

Its not unlikely since there were a few sales going on for the box and word of mouth that 2 week content is ramping up (of course all you do is zerg so...)

[InfiniteRetro]

not looking good

[zito]

not looking good

22 million profit in one quarter is not good? From B2P game? wha...

[Valeron]

all we need is Tackhisis to show up and we will have the trifecta of trolls in one thread

[Sharuko]

22 million profit in one quarter is not good? From B2P game? wha...

It isn't "profit" it is "revenue". Profit is a tiny fraction of revenue. Revenue doesn't account for costs and operations. Operating profit is probably closer to around $5 million dollars. Which probably explains why they have no plans for an expansion.

- - - Updated - - -

I think we'll have to wait until after the Chinese release before making any concrete judgements on the strategy.

China will have almost no effect on revenue.

[Valeron]

Profit is a tiny fraction of revenue.

profit = revenue - costs

China will have almost no effect on revenue.

huh? of course it will have an effect on revenue

[Sharuko]

profit = revenue - costs

I know what it is. But generally operation costs itself are around 60%. You can take a look at the earnings report for NCSoft as a whole and see the ratio of costs to revenue is.

huh? of course it will have an effect on revenue

It won't. Go look at the earnings report and look at the total revenue for China/Taiwan. Is is barely anything even though Aion, Lineage and B&S are fairly popular in China. That is because third parties usually take all the revenue. China is good for marketing and that is it, "we have this many subscribers", "we sold this many copies" etc.

Look at WoW for example, even though Chinese players account for 55% of their population, they represent less than 10% of revenue.

[Valeron]

I know what it is. But generally operation costs itself are around 60%. You can take a look at the earnings report for NCSoft as a whole and see the ratio of costs to revenue is.

ok but you used profit in the wrong context in your previous post. profit (or loss if costs are more than revenue) is a result from the revenue/cost equation, it's not a part of revenue

[|Dexter|]

By this time next year GW2 will be shutting down in China and Korea if they ever get it from the ground in the first place their!

We can do without the unproductive, inflammatory comments. Infracted. -Edge

[Sharuko]

ok but you used profit in the wrong context in your previous post. profit (or loss if costs are more than revenue) is a result from the revenue/cost equation, it's not a part of revenue

Yeah my only point was the $22.9 million dollars is revenue. It doesn't reflect "profit" as zito stated.

[Aeluron Lightsong]

Well, hopefully things get better that or they revaluate their cash shop.