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Saving Face
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Posted - 2011.06.27 19:35:00 -
[1]
 Originally by: Tobiaz
I guess there are some very unhappy employees at CCP if stuff like this gets leaked. Or are these things public?
This is actually public information for a change, just not normally widely disseminated.
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Saving Face
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Posted - 2011.06.27 19:39:00 -
[2]
Originally by: Khamal Jolstien
Cancel DUST and WoT, or outsource/license development to competent studios for these products and become a developer/publisher.
No. If they cancel them they have to write them off, remember all the code they wrote is in the balance sheet as capitalized expenses.
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Saving Face
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Posted - 2011.06.27 20:13:00 -
[3]
Edited by: Saving Face on 27/06/2011 20:14:10
Originally by: Mr Kidd
FHC mentions a 30,000 unsub population is needed to put CCP in negative territory.
That's half of the picture. About 30k subs/year less would be enough to put their profit in the negative given everything else stays the same. The reported profit is meaningless though. Cash flow is important and that is already negative. (Unless they can sell shares again.)
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It's also mentioned that they may already need MT to make their income look more attractive in order to get the loan at a lower rate. However, would that number be necessary to affect their potential to refinance their 11 mil loan that is due in October? If the community could resolve to keep a certain number unsubbed until then it might be just the leverage we need.
They can pay that loan back if they don't lose their cash. Problem is they are still bleeding $8m per year so they need something to cover that or they go bankrupt in October. Increasing revenue from EVE by way of huge income from monocles would go a long way in convincing an investor/a bank that their code is actually worth what they said it was worth. Losing money over it will say the opposite, naturally.
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Saving Face
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Posted - 2011.06.27 20:29:00 -
[4]
Originally by: Uglavitch Nefrex
Having read the end of year accounts, I actually support an increase in subscription cost, if they drop the microtransactions. Also I support a time limit on Plex.
Yeah that would work well, all the PLEXes suddently being used up ;)
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Saving Face
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Posted - 2011.06.27 20:56:00 -
[5]
Originally by: Markus Jome
But the point is that whateveer reason CCP might have to introduce pay to win, lack of money would be no reason, as they have plenty of profit.
/facepalm
They are bleeding $8 mil a year and turning a paper profit because of the huge amount of capitalized expenses (dev cost for products that don't generate income right away => asset on the balance sheet).
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Saving Face
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Posted - 2011.06.27 21:16:00 -
[6]
Originally by: coolzero
its most likely not a leak...
No it's no leak. If you live in Iceland you can get a copy for a small fee. Someone on FHC actually was about to do that when someone else piped up that he already had it.
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Saving Face
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Posted - 2011.06.27 21:28:00 -
[7]
Originally by: stoicfaux
Why is the report in English, and why does it use US dollars?
It's not uncommon to do accounting in USD as opposed to ISK when you're an international business, makes things much easier. If they actually do all their internal accounting in USD, this probably saved them in the last financial crisis.
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Saving Face
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Posted - 2011.06.28 06:30:00 -
[8]
The report says they recognize subscription revenue on a straight line basis over the time the subscription is paid for. This means PLEXes that are not yet redeemed should fall under unrecognized revenue as they can't have started recognizing it yet per these rules. This puts an upper limit on PLEX liability at around $3 million.
This is not really a problem. They already have the money. A PLEX credited to an account will make the balance sheet look about $15 prettier because the PLEX would be moved from liabilities to equity. It robs them of another opportunity to get money from you for that month but the reduction in income is still capped by the $3 million above.
If you buy a PLEX now, their liabilities go up by one PLEX. However they also get a cash infusion of one PLEX at a time where they are burning cash, which is a good thing. You don't even have to trash the PLEXes or spend them on monocles. You're effectively giving them a loan.
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Saving Face
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Posted - 2011.06.28 06:51:00 -
[9]
Originally by: Whyther
I'm also a bit concerned about the $4M+ in goodwill that hasn't been impaired in the last two fiscal cycles.
I don't know if we have any indication that it would actually be reduced. They acquired White Wolf and their IP before the current emovampire rage.
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Saving Face
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Posted - 2011.06.28 07:07:00 -
[10]
Yeah I just think they will want to wait with the impairment of White Wolf goodwill until they know how profitable WoD is. Since that gives them a benchmark for the value of their IP.
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Saving Face
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Posted - 2011.06.28 07:17:00 -
[11]
Oh they don't need to make *much* money. They only need to show that they can milk us for more cash. It doesn't actually have to be a lot since they are just starting.
So if all goes well, they will straight out tell the CSM they are desperate for cash. The CSM will help them find ways to milk us in a way that will not pee all over those customers who don't want to be milked. A realistic guess I think would be cheaper clothes appearing in the NEX. If they can see profit in that sort of thing then the CSM might be able to extract a promise about non-vanity MT, which would cause the rage to subside. With no rage and very little profits from MT they would still have shown a potential to increase profits so I don't quite understand why they didn't do that in the first place.
Also you know how it is with predictions that start out with "if all goes well". If CCP decides on being :ccp: they will flat out refuse everything the CSM could possibly ask for and go full MT. They may even be able to show a profit from that - I don't know how forum rage translates to lost subscription income. EVE might no longer be the game we're playing right now (or not). But it might well become another game that is more profitable than EVE is right now.
The sad part is that EVE on its own is profitable. They overestimated their strength with regard to Dust and WoD and now have to milk EVE to fix it, or sell some of their assets. Since their assets are mostly code they wrote, that can't mean anything good either.
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Saving Face
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Posted - 2011.06.28 10:20:00 -
[12]
Originally by: Katra Novac
Yeah, they have to take the responsibility for their actions, just like anyone else.
Sure, but that doesn't mean we want EVE to stop if we can help it.
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Saving Face
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Posted - 2011.06.28 10:47:00 -
[13]
I have no doubt they can manage their subscription income. EVE itself is profitable and Dust will no doubt* be profitable when it comes out. No problem at all.
*you can read that in whichever way you want
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Saving Face
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Posted - 2011.06.28 12:01:00 -
[14]
Originally by: Arm Smith
Seems like even if ccp survives the october date, it will still only be a mater of time till thins go totaly pete tong.
Okay, first, it will only be a matter of time if you assume that Dust isn't profitable. We don't know that yet. CCP will be running their business based on the assumption that Dust will be profitable, otherwise it would make no sense to develop it.
Assuming nothing else changes, to survive until Dust launches, they need to raise around $20 million more this year than last year. The $12 million loan needs to be refinanced, cash burn of $8.5 in 2011 needs to be absorbed and there needs to be a buffer of unknown size for the part of next year before Dust turns profitable and potential cost to releasing a new game on the PS3 via retail. This is not that bad.
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This is prob a slightly WOW there cowboy sugestion.
But should dust be cancelled?
Financially, this would have a big impact on the balance sheet because the code they wrote for Dust is currently an asset. If it turns out it has no value after all, they'd have to write it down resulting in a huge paper deficit (but not actually in losing hard cash). Kind of like "oops, that $30 million worth of code we thought we had? Turns out it's worth less than a shuttle."
The other side of it is that they would have to downsize considerably and it's hard to predict how that will work out even for EVE, knowing how little we've been getting in the way of fixes and new content recently. If Dust fails they will have to do this anyway, but if you are concerned about EVE, what you would hope for is that it doesn't so that CCP doesn't fall apart.
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Saving Face
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Posted - 2011.06.28 12:16:00 -
[15]
Originally by: Miilla
Again I think they should have used that money to buy a PROFITABLE company and use that for their projects, not living on bond issuances.
I don't know, that's pretty much standard practice. You take out a loan in order to work on a product that will then generate income above what you need to repay the loan. Most businesses do this because bootstrapping from a garage only works rarely.
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I think they also made a mistake of trying to grow too fast in headcount.
They aren't growing organically, at least.
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Saving Face
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Posted - 2011.06.28 18:09:00 -
[16]
Edited by: Saving Face on 28/06/2011 18:08:59
Miilla, you missed the really interesting part.
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CCP has called for their democratically elected expect players from all over the world this week which will be discussed ways of how the introduction of products for sale in EVE will be presented.
They are not there to parley, they are there to help CCP with presentation.
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