Somebody Thinks MMOs Still Have Value – CCP Raises 20 Million in New Funding, Talks IPO Again

With Star Wars: The Old Republic pretty much failing to meet expectations all around, there has been a lot of talk about the death of many things: Monthly subscription MMOs, big budget MMOs, and well… MMOs in general.

Aside from a burst of asylum level crazy talk about SWTOR somehow claiming as many as 10 million monthly users once it goes free… which I am going to guess is what they will need to make it profitable in that mode… to whatever, the news seems to be grim.

Then there is CCP, which seems to be bucking the trend… as usual.

It still has a the subscription model going.  And while it has eyed the cash shop idea longingly at times, it really hasn’t gone very far in that direction, barring some useless cosmetic items.

And they continue to buck the trend by getting $20 million in new funding in these dark days, according to Tech Crunch.

Of course, this should not 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 going bankrupt, but actually made a handy profit for 2011.  This despite the whole Incarna thing.

What will a publicly traded CCP mean?  Is that even a good thing?

I couldn’t tell you.  Then again, I live in Silicon Valley where IPO generally means “screw the company, I’m cashing out!” so I sometimes have a dim view of the whole process despite having “cashed out” at least once myself.

But somebody out there thinks there is value to be found in MMOs.

9 thoughts on “Somebody Thinks MMOs Still Have Value – CCP Raises 20 Million in New Funding, Talks IPO Again

  1. mbp

    I wouldn’t begrudge CCP the chance to cash out after making such a unique game but I would be very worried about the impact being in a public company would have on the game.


  2. Wilhelm Arcturus Post author

    @mbp – In my personal experience, a lot of companies go about becoming successful, going public, and remaining public each as distinctly different modes of operation. Sometimes that leads to a state of affairs where what made the company successful in the first place is completely destroyed by the next two stages.

    So, yes, CCP going public worries me a bit.

    On the other hand, continuity of culture is important. Again, personal experience, but the above failure I mentioned is often accompanied by founders being pushed aside by the VCs who bring in somebody who knows how to bring a company public and who, as often as not, screws up the culture of the company.

    If CCP can hang on to its culture… broken though it may be at times… we might not be disappointed.


  3. Toldain

    Well, $20 million to a company with an established product and revenue stream, and a record of growth and profitability is a LOT different that $75 million in guaranteed loans to a company with none of the above things.

    CCP’s IPO noise is very likely traceable to the source of the $20 million, who are looking for a quick rollover.


  4. Machination

    @bhagpuss – EVE is mightily cheap to maintain, compared to a ‘ground game’. Sandboxes always tend to be cheaper, since a lot of the content is produced by players. I hope they stick to their sandbox ways.

    … and don’t blow all the cash on full voice-over dialoges. Spend it on gameplay.


  5. splatus

    An IPO is – imho – highly unlikely. It is viable game plan but a buyout by e.g. Sony is still more likely. IPOs are incredibly expensive and only worth for companies who expect massive growth – not in something nebulous as “subscribers” (this means “accounts”, not “players” of course) but hard cash. EVE Online it its current form can not grow 10-100 fold in <5 years – numbers that the IPO bankers would demand. DUST may or may not work well, its a huge technical and commercial risk that the IPO bankers don't want to see.

    A significant event however – some M&A could be very good. _If_ executed well, it could give CCP the cash and the product development discipline to build their vision. Incarna _was_ a good idea ruined by piss-poor execution. However, most M&As end badly, with the new target getting folded into some mega company that doesn't understand the culture of the new acquisition. Dont underestimate physical distance either. Iceland is far away from either Osaka or Silicon Valley.


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