Funcom Q3 2012 Finances


The third quarter results are in for Funcom, and the news is a mix. The Secret World has launched and revenues for the third quarter are 10,963 TUSD, more than double for the same quarter in 2011 and far higher than in the second quarter of this year. Unfortunately  due to the poor launch of The Secret World in July, new estimates show that the company may not achieve a positive cash flow in 2013. All of Funcom’s titles that have launched are in a position of bringing in a positive cash flow, while development continues for Funcom’s Lego Minifigures MMO, as well as Project A revealed previously and in conceptual stages. The Lego MMO is set for a 2014 launch.

Now for some juicy speculation. Funcom stated that 30-40% of The Secret World’s income is from the cash shop. Since The Secret World pulled in $1.1 million USD in October, and we’ll go the low route and say 70% is from subscriptions and they are all people paying the $15 a month. That leaves Funcom with approximately fifty one thousand subscribers for The Secret World in October. This number is either great or terrible, depending on your perspective. Hopefully it is more than enough to keep the MMO going.

Funcom has retained ABG Sundal Collier and GP Bullhound, leading some to believe that the development studio is on the verge of selling itself off to the highest bidder.

Funcom Reverses Layoffs, Anarchy Online Engine Update, Steam


You were paying attention when Funcom stated that the layoffs back at the end of August were temporary, weren’t you? In the latest Flash Point podcast, Joel Bylos went on to explain that the rehiring process has already begun, with three of the ex-Funcom employees brought back to the team. On the end of The Secret World, Funcom will continue its tactic of monthly issue updates, adding in a wide range of new content to the MMO.

In other Funcom news, Anarchy Online is coming to Steam. In the monthly update post over at the Anarchy Online forums, Producer Ilaliya explains that the Steam-compatible version of Anarchy will be available as soon as a few kinks are worked out, some to do with in-game bugs dealing with the Steam overlay, the other to do with internal scheduling over at Valve. Additionally, the long awaited upgrade to the Dreamworld Engine for Anarchy Online is coming along, with public beta testing to start hopefully early next year. This upgrade will bring with it a multitude of changes to Anarchy Online on a graphical and functional level, including the ability to add armor as additions to a character rather than the old painted on look.

(Source: Flash Point Podcast)

(Source: Monthly Development Update)

Funcom Q2 2012 Highlights


Funcom’s second quarter finances are out, and the results are rather predictable. Since we already know from previous reports that The Secret World failed to meet up to Funcom’s expectations, and greatly so, it comes as little surprise that the recently launched MMO has pulled in less than half of Funcom’s previous “Conan-like” scenario. The second quarter also has the bad luck of taking in all of The Secret World’s development costs with little of its income, due to head start not beginning until the end of July.

The Company still considers it likely that sales for the 12 months period following launch of the game will be less than half of what was presented in the Conan-like scenario in 1Q presentation.

Revenue was down once again compared to the previous quarter, due to Funcom’s main source of revenue (Age of Conan) taking yet another hit in sales. That being said, all of Funcom’s currently launched MMOs are rated as “cash flow positive.” The Secret World has sold more than 200,000 copies since launch, as noted in the filing, with what Funcom says is a strong and positive reaction from its user base. Funcom recently launched a number of titles, including The Secret World, the MOBA Bloodline Champions, and a couple of free to play social games.

For the future, Funcom has a few titles under its belt. Revealed earlier this year, Funcom has partnered with Lego to create an MMO based on the mini-figures. Additionally, the report mentions a large-scale MMO titled “Project A.” No doubt we will be hearing more about that in the future.

(Source: Funcom Investor)

Funcom Q1 2012 Finances


Funcom today released the financial details for the first quarter of 2012, and the results are mixed. Age of Conan continues to be Funcom’s major source of income, although revenue is down due to the release of a “large competitor.” Revenues dropped from 3,389 TUSD in Q1 2011 to 2,293 TUSD this quarter. The Secret World continues to be a major drain on Funcom’s finances.

On the good side, Funcom’s current flock of titles (Age of Conan, Anarchy Online, Bloodline Champions) continue to remain at a positive cash flow, bringing in some much needed funds to keep The Secret World going. Funcom notes much more positive reactions to The Secret World than Age of Conan at the same time before its launch, and projects a higher retention rate than Age of Conan.

At the current rate, The Secret World is projected to sell 30% more than Age of Conan, with in-game store sales marking 35% of the game’s projected revenue, and a healthy retention rate of 490 thousand subscribers. A poor retention rate would be around 280 thousand.

Additionally, Funcom has come upon $22 million in standby equity which can be drawn upon as the company desires.

Video of the ___: Anarchy Online New Engine


Anarchy Online’s engine upgrade has been a long time coming, and while there is still some time to wait before players can enjoy the decade old MMO with brand new digs, the team at Funcom has promised to release a series of videos detailing new environments and player design.

Funcom Q4 Finances: Project A Unveiled


In their third quarter finances, Funcom predicted a lower revenue for quarter four on account of the initial fervor over Age of Conan’s free to play ending. In the presentation, released today, Funcom reaffirmed this by posting a revenue loss of 11% quarter over quarter.

While Age of Conan remains Funcom’s primary source of income, revenue for the title was down compared to the previous quarter when Funcom launched free to play. Bloodline Champions, Funcom’s MOBA, saw an increase in profits thanks in part to the launch in Russia.

Quarter 1 2012 revenues are expected to be even lower due to a further decreased revenue from Age of Conan. Age of Conan, Anarchy Online, and Bloodline Champions continue to generate a positive cash flow for Funcom, brought down by the costs of developing several titles.

The finances also make reference to “Project A,” an MMO in the conceptual stage.

(Source: Funcom)

Funcom Q3 2011 Finances


Because most of you probably don’t care to read up on it yourself, MMO Fallout is committed to bringing you the important information from each quarter’s financial reports. Yesterday, Funcom revealed its third quarter finances to investors, and there is plenty to boast about. Revenues increased 55% in the third quarter compared to the second, but Funcom expects the fervor to somewhat die out, and has predicted a loss in revenue in the upcoming fourth quarter due to a foreseen diminished interest in Age of Conan.

The Secret World is “progressing well,” and the team is putting the final touches on squashing bugs, improving optimization, and balancing content. The game is still set for an April 2012 launch. Funcom’s final figures are rather low due to the development costs of The Secret World and a number of free to play games. In their “target scenario,” The Secret World will sell 30% more clients, and a healthy retention is around 490,000 subscribers. In their “Conan prediction,” Funcom expects only slightly better retention than Age of Conan (280,000) and one million sales in the first year.

Some more interesting information:

  • The cost of hosting Age of Conan since launch has been 18 million, excluding bandwidth costs.
  • The Secret World will cost approximately 4-8 million over the same time span, reducing costs greatly.

Funcom Q2 2011 Finances


It’s August, and that can only mean plenty of Q2 financial reports to read. Funcom has released its financial reports for the second quarter of 2011, with just enough time to factor in Age of Conan: Unchained. Here are some points of interest:

  • Age of Conan: Unchained has more than doubled revenue for the title, although we already knew that.
  • Bloodline Champions is being localized in Russia.
  • Funcom believes that the Secret World will be a less risky launch, given the stability of its engine (Dreamworld 2.0)
  • Age of Conan, Anarchy Online, and Bloodline Champions are all bringing positive cash flow, but the development costs for The Secret World, Pets Vs Monsters, Fashion Week, and My Kingdom are putting serious hurt on Funcom’s money.
  • Funcom sees The Secret World as selling more in its first year than Age of Conan did, as well as significantly better retention.
  • A “healthy retention” for The Secret World is considered 490,000 subscribers. “Conan-like scenario” is listed as 280,000 subscribers.
Unfortunately, unlike NCsoft, Funcom does not offer as detailed sales figures on a per-game basis or per-region. So Funcom is bleeding money, but such an outcome is expected with so many projects on the table.

Looking Back, Moving Forward: November 2010


It's funny because it bashes WoW...

Small change in the LBMF structure. Now that November is done, companies are going to have to ramp up work if they’re going to get their game out and hit that 2010 release date. According to the MMORPG.com game list, there are more MMOs apparently slated for release this month than I can care to count.

My biggest disappointment with November was probably that there won’t be a 2011 MMO calendar. The 2010 MMO calendar on my wall, many of the months having various autographs, came out last year to benefit St. Jude Childre’s Research Center, and apparently is not coming back for 2011. I may just buy a Guild Wars 2 calendar, or perhaps just use my Nintendo 2011 calendar I received as part of the Nintendo Club.

The Good:

  • Star Trek Online Free To Play: Sure, Cryptic may be bribing us by saying “play Champions Online free to play and perhaps spend some cash, and maybe we’ll consider throwing you a bone in Star Trek Online,” but who cares? Star Trek Online may be going free to play! Although it will be limited, a free to play transition for Star Trek Online should be just what the game needs to get some big traffic, especially with the changes in response to player gripes, and the introduction of user generated content.
  • K2 Networks Picks Up APB: K2Networks, also known as GamersFirst, picked up the rights to All Points Bulletin and plans on reviving the game early next year, after an extensive patching to make the game suitable for its new free to play environment.
  • PvP In Alganon: Well, technically to have player vs player combat you need more than one player, but we can work on that at a later date. In the November patch, Quest Online added a system for flagging for PvP, as well as dueling. In future patches, Alganon players will see a keep/siege system similar to Warhammer Online, as well as a renown system that players will level up for gear.
  • Pirates of the Burning Sea now Free: Flying Lab Software released the free to play transition to Pirates of the Burning Sea this month.

The Bad:

  • No City? I’m On Break: A company royally breaking their game in a patch is not all too uncommon, in fact I can name at least one game (rhymes with ShroomTape) where such an event occurs every other week. When Mortal Online released a patch that inadvertently removed a city, killing its occupants and creating a gigantic void for players who came anywhere near it, much of the angry response came not because of the glitch itself, but because of the response. The players were told that the missing city could not be replaced for a few days, because the developers were off for the weekend.
  • Final Fantasy XIV: Not Satisfactory: It isn’t often a company comes right out and says “our game isn’t satisfactory,” but Square Enix did with Final Fantasy XIV, and after bad news on the financial grounds, they are committed to keeping their current subscribers (who haven’t paid a dime in subscription fees three months after release) and bringing in new players. To top off this need for players, I found that stores in the US, and possibly other countries, are pulling Final Fantasy XIV from shelves. Target and WalMart are now only selling the title online.
  • Star Gate: No More Resistance: Square Enix isn’t the only group getting a double whammy this month, as Cheyenne Mountain Entertainment announced that they had won the lawsuit against Fresh Start Studios, gaining their assets back for Stargate Worlds. Unfortunately, MGM terminated the agreement with Cheyenne over the Stargate license, meaning for right now the MMO is dead. Later on in November, Fresh Start announced that Stargate Resistance would be shutting down early next year.
  • Aion Million Man March: Later on in November, mmosite reported on a protest in Aion China against the rampant botting in the game. An estimated thirty thousand players appeared to congest cities in a number of servers in protest, shutting down four servers in the process.

The “What’s Happening in December?”:

  • Earth…Something or Other: Earth Eternal shut down back in August after the developers stopped paying the bills, and I think it’s safe to assume that Sparkplay Media’s CEO is now unemployed. We still don’t know who purchased the game, although all signs point to Time Warner, and there is no indication when the game will be brought back online. Guess we’re in for another month of waiting.
  • Anarchy In The Cash Shop: Anarchy Online last month launched the game’s brand new cash shop, offering everything from level packs, stims, and more for a nominal fee. I’ll be watching to see if there are any financial reports gloating on the success of the cash shop, or if its existence is merely pushed to the back as something of an embarrassment.
  • Cataclysm Shakes WoW: Oh look, a mention of World of Warcraft on MMO Fallout! Although the damage to the World of Warcraft has already been done, for the most part, in the Shattering event, Cataclysm launches in just a few days bringing new races, new areas, and generally a whole lot of new to the World of Warcraft.
  • And More!

Cash Shop Coming To Anarchy Online


What did you say?

Anarchy Online is one of the oldest MMOs on the market, and for the fact that it never appeared much (read: at all) here on MMO Fallout, the game has brought a number of innovations to the MMO genre, foremost instancing, dynamic questing, and in-game advertising. Funcom also touched upon what we now think of as endless trials, when they made the original game completely free (plus in-game ads) that brought in major money for Funcom.

Last week, Funcom announced that the “new” cash shop would be coming to Anarchy Online. This week, in a forum post, they commented further on the upcoming update. In addition to hundreds of social items, Funcom is looking at adding some non-vanity items in the form of xp stims (boost experience gain for a limited time), time-limited access to expansion content, level packs (boost to level 50, 99, 150, 199 instantly) only available to players who have a level 220 character, and more.

We’ll see how this goes for Anarchy Online. According to the forum post, Funcom plans on rolling out a Funcom Points currency across their games, meaning a similar cash shop may appear in Age of Conan and upcoming The Secret World.

More on Anarchy Online as it appears.