Frequently Asked: NCSoft

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Frequently Asked is a new column relating to MMOs and common questions that I receive and see on other websites. If you have any questions of your own, feel free to drop a comment.

1. Why does NCSoft shut down everything?

Short answer: money. The longer answer is that NCSoft has made a lot of risky investments that didn’t work out and cost them a lot of money, due to poor management or design. Some of these were doomed to fail, while others simply found themselves in the wrong place at the wrong time. In order to properly understand each game, we need to look at them individually. This is going to be a long process.

Lineage is the first game on the list, and a perfect example of the differences between the Korean and western gaming markets. South Koreans love their mmos, so much so that subscriptions for Lineage and other online games are actually included as perks to get people to sign rental leases. Imagine going apartment hunting and seeing a World of Warcraft subscription listed alongside utilities, laundry access, and parking. Despite its impact and obvious popularity, with revenue dwarfing and now exceeding the cumulative earnings of the rest of NCSoft’s catalog, the fact that Lineage was declared not financially viable in the west and subsequently shut down back in 2011 says a lot about the ability of NCSoft’s products to penetrate the foreign market.

Now let’s talk about their other games. Auto Assault launched in 2006 to sales that would later be tenderly described as “sluggish.” It was buggy, unfinished, and rushed to market with a fifty dollar price tag and a full subscription price. In fact, the game did so poorly that it was pegged as the primary culprit for the company posting a two hundred thousand dollar loss that quarter, thanks to a one-time write off of $13.1 million. Just two months later, NCSoft-Austin went through a restructuring, laying off seventy of its three hundred workers while the publisher’s stock tanked and lost roughly a third of its value over the same period. With Arenanet celebrating the tremendous launch of Guild Wars and City of Heroes remaining at a stable one hundred fifty thousand subscribers, it’s no wonder that NCSoft decided to axe Auto Assault.

Tabula Rasa is one of NCSoft’s biggest series of blunders to date, and a name that the executives would really like to forget. What we do know of Tabula Rasa’s development cycle is that it originally started as a heavily Asian influenced fantasy MMO aimed at the Chinese and Korean markets, with everything from player owned housing, music-based classes, and unicorns. When focus testing resulted in overwhelmingly negative feedback, Tabula Rasa was redesigned as the sci-fi shooter that we all know and a few of us even loved. Unfortunately for Richard Garriot and his team, this meant wasting two years of development and millions of dollars on a lost cause. As a result, Tabula Rasa saw increasing pressure to release a finished product and start making money, leading to the game’s poor state when the servers went live in 2007.

Having already wasted a lot of time and money, NCSoft evidently had no intention of investing any more when the game launched to a first quarter return of five million dollars, compared to its projected $50 million. In September 2008, similar to Auto Assault’s launch, NCSoft’s western operations went under yet another round of layoffs, this time in the UK offices. The company denied that Tabula Rasa was to blame, although they also denied that the game was shutting down just a couple months before announcing that Richard Garriot had left the building and the servers would be coming down in early 2009.

On top of the game’s losses, NCSoft was apparently so eager to get rid of Richard Garriot that they either didn’t properly consult their lawyers or didn’t care to, because they fired him and then penned a letter to the public by claiming that he had resigned. Garriot sued NCSoft for fraud and was awarded $28 million in damages and lost stock opportunities. Yea, NCSoft doesn’t like to talk about Tabula Rasa.

Exteel. Whenever people ask me where the name for MMO Fallout comes from, I tell them that it’s a nod to the radiating effect that success and failure in the industry has on other products. Tabula Rasa went down in such a blaze of glory that it actually caused direct collateral damage. Following Richard Garriot’s successful lawsuit and the loss of $28 million (plus the cost of lawyers and other fees) on top of what had already been a financial hole, NCSoft made the surprise decision and shut down Exteel. In the report detailing the shut down, NCSoft directly lays the blame on the game’s unstable income and makes reference to the losses sustained from the Garriot lawsuit, and while there is no way to know for sure (due to Exteel not being individually listed in NCSoft’s income), it is certainly possible that had the lawsuit never happened, Exteel might have remained running in relative obscurity at least for a little while longer.

Dungeon Runners. Speaking of running in obscurity, NCSoft’s other title Dungeon Runners was announced for closure just months after Exteel. As a game, Dungeon Runners was much beloved by its small and unprofitable community, but as a money making venture it was a tiny blip just barely making the radar of NCSoft. The publisher described it as an experiment in game design, one that they had gathered suitable data with. When the development team slowly dwindled down to three people with the game still not turning a profit, NCSoft made the decision to shut the servers down.

City of Heroes: City of Heroes is the only game on this list that was an undeniable success, and the fact that it is the only game that NCSoft has shown any interest in reviving says a lot about how they feel about the MMO. While the other games on this list were victims of profitability and restructuring following financial disaster, City of Heroes was the victim of NCSoft reorganizing its vision to encompass triple-a games and pretty much nothing else. City of Heroes had been coasting at a cool 2.5 to three million quarterly, and reports from NCSoft and ex-employees around the time of its demise seem to indicate that while the game was profitable in a vacuum, Paragon’s work on two other IPs at the time led to the studio itself being unprofitable. Given the already small part that City of Heroes played in NCSoft’s overall business and their new strategy of AAA gaming, it can be assumed that the publisher had no interest in working out a solution to Paragon Studios being unprofitable.

2. Why doesn’t NCSoft just sell their games?

Business deals are a closely guarded secret that, barring the revelations of an old CEO on his deathbed, we will never know the answer to. Next.

Oh right. We can assume a few reasons for why NCSoft doesn’t sell their failed MMOs, none of which are based off of anything other than mildly informed speculation. First, there are software issues. MMOs tend to use a lot of middleware software to deal with stuff like physics and the underlying engine, making it difficult if not impossible to transfer those rights to another company. Think of it like the EULA preventing you from selling your pc games, but on a corporate level. Secondly, while selling off a game and allowing another company to try and turn it into a viable product may seem like a win-win from a PR perspective, the idea of creating your own competition goes against every lesson in business school.

Third, there are investors and stockholders. Nothing could be more embarrassing and potentially damaging to a company’s reputation than to have them fail at developing a product only to hand that off to another company and have them do a better job. You’d be hard pressed to find a developer willing to shoot themselves in the foot and then proudly parade their inferiority to shareholders. Finally developers are creators, and if creators are anything, they are possessive. MMOs are a labor of love, encompassing years of a developer’s life to the detriment of family, friends, marriages, and often mental and physical health. Sometimes people don’t want to give that up.

3. Can I trust the NCSoft brand?

The answer to this is pretty subjective and complicated. If any lesson can be learned from NCSoft’s history it is that the company doesn’t have much patience for failure. That being said, the new company vision for AAA titles pretty much ensures that smaller games like Auto Assault or Tabula Rasa will never be approved, let alone launched and then shut down. NCSoft is only interested in games that have massive potential like Blade & Soul and Lineage Eternal, and while the corporate attitude may not protect, say, Carbine Studios from seeing the repercussions of Wildstar’s performance, at least we have the confidence that the game will likely go free to play rather than simply shutting down as with its predecessors.

So you can look at it either way, with NCSoft as a soulless corporation that puts profits over everything else, or that the digital graveyard that makes up NCSoft’s catalog is a relic of a bygone era that is no longer relevant to their current decision making. Regardless, you will not be dealing with a company like Sony Online Entertainment, who keep a lot of their games online long after they were no longer profitable.

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