Financial suicide.
Clearly something very significant and serious is going on at Anet at the moment and all the evidence suggests that the things I have described have contributed to a serious fall in player numbers that could affect the long term future of the game.
The simple fact is that once Gem store sales start falling (and of course I have no evidence that they are at the moment) the game becomes unsustainable.
To underline this – If you can locate the ANET Financial report Q4 2015 thread – you will see that revenue for HOT was less than a normal quarters gem sales.
Gem sales and by implication active player numbers are the be all and end all for ensuring the game stays in existence.
For many businesses the value of ‘good will’ far exceeds both income and assets and Anet could clearly use some good will at the moment to maintain current, entice back lost and attract new players..
So your solution to all this loss in revenue is even more loss in revenue? Okay….
Clearly you are not familiar with the term ‘loss leader’ – look it up – Also look at the Q4 2015 financial statement.
Gem store sales are the revenue stream and to sustain that income the game needs a stable (not shrinking) player base.
Anet needs to win back old and entice new players to the game – Another poorly received expansion that generates less revenue than quarterly Gem sales (as HOT did) may provide a nice blip on the balance sheet every 12 months but if player numbers
decline, the viability of the long term future of the game is sadly going to be in question.Oh I know what a loss leader is. I find it funny that you’d apply this to an expansion for an MMO. Then again, maybe you should read up on what characteristics usually qualify a loss leader, especially:
- A loss leader is usually a product that customers purchase frequently—thus they are aware that its unusually low price is a bargain.
- Loss leaders are often scarce, to discourage stockpiling. The seller must use this technique regularly if they expect their customers to come back.
- The retailer will often limit how much a customer can purchase.
- product is sold at a price below its market cost to stimulate other sales of more profitable goods or services
Lol – well done for copying and pasting a few lines from the Wikipedia entry for loss leader:
https://en.wikipedia.org/wiki/Loss_leader
Sadly though the ability to Google search and copy/paste doesn’t convince me that you have enough understanding of the concept to see how it would apply in this situation.
Care to share your thoughts on the Q4 2015 financial results?
First off, what you are looking for is this: http://global.ncsoft.com/global/ir/earnings.aspx not hard to find if you had spent 10 second googling.
Second, if you’d taken the time to actually read through Q4 2014 and Q4 2015, well read is a bit much since it’s nicely put in graphs with a lot of bells and whistles, you’d have seen the rise in sales accross the entire year of 2015 (prepurchases etc) compared to 2014. Given only the pure numbers, we are talking 85.6 BN KRW to 101 BN KRW, which is a 17.99% increase in revenue (13.68 MM Dollar). That is not calculating for the lost revenue from people getting the gems discounted with delux editions or any late adopters who bought HoT not within the first 3 months. For a over 3 year old game, not bad. Especially after a big slump in 2014 (compared to 2013).
Hell, NCSoft even specifically mention:
GW2 solidified its position as main revenue driver, by adding on expansion pack sales to stable in-game item sales
That’s not stuff you make up to fool investestors, stakeholders or shareholders. Especially when they could have left that out.
Now, I’m still waiting on any type of evidance where any MMO developer has provided any huge quality expansion free of cost. Or any type of research which has to do with digital goods and customer retention favoring getting new customers over old ones. All the literature I’ve read in the past has shown otherwise. Here is a small article which is semi current: http://oursocialtimes.com/70-of-companies-say-its-cheaper-to-retain-a-customer-than-acquire-one/
And while we are at the subject of customers, read this: http://www.extremetech.com/extreme/177409-only-0-15-of-players-account-for-50-of-free-to-play-game-revenue
EDIT: the reason I’ve stuck to wikipedia was and still is that you’ve not provided any amount of qualified analysis which would warrent more effort from my part. You did not even get your loss leader definition as it is represented in the wiki right. Show me some basic understanding, and we’ll go from there.
(edited by Cyninja.2954)