Daily Archives: October 5, 2016

The Further Diminution of Station Cash and Additional Intrigue

Daybreak Games announced yesterday that they would cease selling physical game cards for Daybreak Cash (which I am going to call Station Cash from here forward out of habit/tradition) or All Access membership effective last week.  The cards should have been pulled from stores as of September 26.

Soon to be gone

Soon to be gone

Naturally, in the grand SOE tradition, ads for these cards are still all over the various Daybreak game web sites despite the order to pull them from shelves.

Probably not coming to Target now...

Probably not coming to Target now…

Should you find such a card still on the rack at your local WalMart, because there is always somebody who doesn’t get the word, their ability to be activated will cease on November 8, 2016.  After that date they will just be colorful bits of plastic.

If you have an activated card, you can still redeem it for the foreseeable future, likely in part because California state law does not allow companies to expire or invalidate gift cards that customers have paid for.

The timing of this is… if not interesting, at least worth a moment of thought.

Daybreak sending out the word to pull Station Cash cards off the rack a full week before they announced to customers that the cards would be going away was not accidental.  They clearly wanted to get at least some of the cards off the rack before they told people.

But why?

There are downsides to such cards.

The cards have a bit of a checkered history, being one of the sources of Station Cash that helped devalue the currency back in the day with “Triple Cash” deals for redeeming cards and the inevitable bonus cash that WalMart demanded its customers get.

TripleSC01

Triple your take!

As a revenue source, Daybreak has to share a cut with the retailer and the card processor so, as Blizzard would rather you buy digital direct so they don’t have to share the loot, so Daybreak no doubt wishes you would just buy straight for them and leave them with the cut the middleman would otherwise take.

Then there is the accounting annoyance of such cards.  When a customer buys the card you cannot claim it as revenue until it is actually redeemed.  You have to carry that money on the books as an obligation.  In one of those way that accounting goes from measuring reality to becoming reality, you get the money and can spend the money, you just can’t claim the money towards revenue or profit.  But that likely doesn’t apply if Daybreak straight up sells you the Station Cash, because that transaction is done and you have your virtual good and/or service right away.

On the upside, those cards were low effort sales.  Somebody else has to ship them, put them on the shelves, ring them up and so on.  Daybreak just has to redeem codes and keep the accounts at their end.

And, of course, these cards are how players who do not have credit cards can buy Station Cash and All Access for their accounts.

So why kill them off?  If they were not selling enough, removing them from the shelves THEN announcing they were going away doesn’t make a lot of sense.  Doing it the other way around might have gotten them an injection of cash as people who wanted/needed to use them rushed out to pick up a few before they were gone.

And killing them off doesn’t end the accounting hassle.  That goes on for a while because you already have  this ecosystem of cards and some percentage always go missing and never get redeemed.

For this, I think we have to go back to a bit of news almost two weeks in the past, the announcement that one of Daybreak’s games, H1Z1: King of the Kill, was no longer going to use Station Cash and would be getting its own virtual currency with the generic name “Crowns.”  Not “Daybreak Crowns,” just “Crowns.”

So while Connor over at MMO Fallout attributes this to possibly more Daybreak financial woes, I wonder if this portends further changes at the company.  They have cut one of their games out of their Station Cash herd and now they are shutting down a somewhat passive revenue stream without trying to give it a final, farewell milking.

Are we looking at the start of some sort of splitting up of Daybreak into smaller, perhaps more saleable parts?  The Crowns announcement started people wondering that.  Does the retail card cut further that?  Is this another preparatory move, or just Daybreak trying to simplify their business?

Anyway, the announcement and brief FAQ is available here.