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CCP Makes $66 Million in 2011, Talks IPO, and Hires David Reid February 22, 2012

Posted by Wilhelm Arcturus in entertainment, EVE Online.
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CCP announced that 2011 revenues for the company were $66 million, up from $59 million in 2010, and that the player base for EVE Online stands at more than 400,000 subscriptions, an increase from the “nearly 360,000″ reported in their 2010 financial statement.

2011 was quite a year for CCP, with the double whammy of the Incarna expansion features disappointing a large segment of the player base and the realization that they were over-reaching their financial abilities juggling EVE Online while developing both Dust514 and a World of Darkness MMO.

The former ignited in-game protests and a confrontation with the CSM that lead to a refocus of development and eventually to the much heralded Crucible expansion this past fall, while the later lead to layoffs and putting World of Darkness MMO on the back burner.

A tough year and quite a bounce back from a precarious state.

I was a little bemused to see that their new chief marketing officer was David Reid (now officially @CCP_Pokethulhu.) formerly of NCsoft and Trion Worlds and famous in my mind for the “Tabula Rasa is Triple-A and Here to Stay” interview, given just before they announced the game was going to close.  That interview and other weasel words that have come out of his mouth in the past tends to taint anything he says in my mind.  That is my bias however, and may be unfair.

But when he says things like, “the company has been excited to embrace new models, in addition to the traditional subscriptions offered by EVE,” I start to wonder which side of his mouth he is speaking from at any given moment.  Did he not get briefed on the whole Incarna, Noble Exchange, gold ammo rumor fiasco?  Did he think he was just speaking to investors and that EVE players might not read his statement?

Granted, he is not saying that EVE specifically will be embracing new models… well, except in China I gather… but would you think after the summer of protest the company as a whole might be more circumspect on the subject.  Again, he might just be saying what he thinks potential investors want to hear, since Free to Play and items stores are still hot stuff and the CCP CEO is talking bring the company public with an IPO.

The IPO thing is a bit a jolt as well.  Coming from Silicon Valley and having been through the IPO thing a couple of times, you only go public for two reasons.

You either need a cash infusion to finance an expansion of the company and the new projects that come with it or the founders/investors want to cash out. (Or, in the US, if you have more than 500 stock holders or people are transferring enough of it around that the SEC makes you go public.)

Now, given that they had to cut back on staff in 2011 and put the World of Darkness MMO on hold, this could be a play to expand operations so that the company can afford to do three things at once.

Or this could be a large investor who wants to get their money out of the company.

I suppose we shall have to wait and see.

Anyway, at least bankruptcy seems to be off the table.  Now to see how 2012 progresses and if we will get an answer to one of my 12 questions for 2012.

Comments»

1. Jason - February 23, 2012

Well, most of that seems pretty good, like they’re back on track following a rocky 2010, but hiring David Reid? I can’t think of that as anything but epic failure.

2. Wilhelm Arcturus - February 23, 2012

Well, he isn’t really part of the team until he has a CCP handle. So what do you think it should be?

CCP_ForkedTongue?
CCP_Carebear?
CCP_SixMonthsAtMost?

3. Aufero - February 23, 2012

Look at it this way – there can’t be too many gaming company executives with more experience in answering the question “We pissed off our entire subscriber base, what do we do now?”

(Well, Smed. But he’s with SOE for life.)

4. Noizy - February 23, 2012

A large investor who wants to get his money out of the company? How about the largest investor in CCP, Bjorgolfur Thor Bjorgolfsson. He was heavily involved in the collapse of Iceland’s banking system and as of this summer still really needs money.

5. Ixliam - February 23, 2012

@Aufero – Maybe a dream team of Brad McQuaid and Derek Smart for the “We pissed off our entire subscriber base, what do we do now?” experience. Derek can at least boast experience with continuing to piss off/ban players.

6. Toldain - February 23, 2012

It could be both.

My understanding is that CCP was launched with an initial investment of 2 million. So Bjorgolfsson stands to gain a lot of money from an IPO.

If they think their revenue numbers are bouncing back, then they would probably use an infusion of cash to fund new projects.

7. Hong WeiLoh - February 23, 2012

Problem is they’re seeing those VERY short-term numbers as a long term trend, and taking a real gamble on that playing out. Personally I would wait a year or two, see if the trend continues, or it’s just a short “spike”… or worse yet the next expansion has people pissed again and numbers fall…

On the bright side, CCP may very well learn a hard lesson a lot of their EVE players have about “charging in” and “risk aversion”. Course it’ll cost them their company, and us EVE, to learn it, but meh.

8. Wilhelm Arcturus - February 23, 2012

Well, I don’t know about VERY short term numbers. I have quoted two years of revenue, and the linked articles mention the total earned by EVE over its lifetime and its continued year over year growth.

After years of dealing with companies whose only focus is the current quarter, even talking about two years seems like a financial epoch, especially when they were still growing during a down economy.

But yes, the devil is in the details, and I worked for at least one company that played games… closing quarters early, dumping product in the channel, taking revenue in the wrong quarter… to show 8 quarters of successive growth just sweeten an IPO. Of course, that was when you had to have two successful product lines and be growing and profitable to IPO, back when dinosaurs roamed the earth.

9. SynCaine - February 23, 2012

“CCP-I’m a marketing guy and don’t influence game design at all. I’m also not in Azeroth anymore, this time for realz, help!”

That might be too long huh? Non-factor is a non-factor.

10. Wilhelm Arcturus - February 23, 2012

And, to be fair, my bias against David Reid is based on comments that probably weren’t meant for fan consumption… well, except for that Tabula Rasa thing. But maybe he is one of those guys who knows how to do the IPO road show to get funding and on board and such. That is a serious talent.

I just wonder how the Incarna riots would have gone if he had been the company front man handling things.

CCP_PayNoMind

11. Genda - February 23, 2012

Speaking of hubris and David Reid. Does he know where those missing subscribers are now?

No, I didn’t think so.

He did more to turn me off to Rift than the game did, and that’s saying something.

12. Wilhelm Arcturus - February 23, 2012

This just in: David Reid was just assigned his CCP Handle.

He is now available to follow on Twitter as @CCP_Pokethulhu.

I cannot decide between alarm, amusement, or disgust.

Whoops, his first tweet was “Greetings Earthlings!”

Clearly disgust won.

13. TAGN: CCP Raises 20 Million in New Funding, Talks IPO Again - August 10, 2012

[...] course, this should really be news. CCP was talking about more funding and an IPO back in February when they announced that they had not only defied some dire predictions about [...]


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