By which I mean it’s burning to the ground.
Continue reading “NCSoft Q3 Finances Show A Company On Fire”
Tag: finances
Square Enix Sales Boom In 2016
(Editor’s note: Before we dive in, I’ll remind viewers that Square Enix operates on a different fiscal year that ends March 31st. As a result, while most other companies are reporting their first quarter finances this month, Square Enix is on Q4 for the 2016 fiscal year. This is not a mistake on our part)
Square Enix has released its end of year results for the 2016 fiscal year, and the results are pretty positive across the board. Net sales grew 27.5% over the same period last year while operating income boosted 58% and normal income rose 49%.
Much of Square Enix’s success has been attributed to the strong releases of mobile titles alongside the console releases of Rise of the Tomb Raider and Just Cause 3. Over on the MMO side, the company also had a fair amount of praise for the continued success of Final Fantasy XIV and Dragon Quest X. While sales of merchandise derived from IPs increased, sales from comic books remained sluggish compared to last year.
Square Enix has a slew of titles ready to launch over the next year, including Rise of the Tomb Raider (PS4), Final Fantasy XV, Deus Ex: Mankind Divided, Dragon Quest Heroes II, Kingdom Hearts 2.8, World of Final Fantasy, and more.
(Source: Square Enix)
Funcom Earnings Slow Over Last Year
Funcom’s final quarterly report of 2015 has released, and the results are not so pretty. Revenues dropped to $2.5 million from $2.9 million over the same period last year, due to Funcom’s major sources of revenue (their MMOs) declining with age. In addition to a loss in equity and earnings, the total cash position of Funcom dropped from $1.1 million in the third quarter to 616 thousand in the fourth. The company’s cash flow for 2016 and beyond is set to be secured via sale of stocks as well as a convertible bond.
On the games front, Funcom’s primary revenue drivers continue to be Age of Conan, Anarchy Online, and The Secret World. The Park met all non-revenue related goals while selling in line with internal expectations. For those who have forgotten, in a previous financial report Funcom did not expect The Park to generate any significant source of revenue. For the first quarter, Funcom expects to launch The Park on Xbox One and Playstation 4, increasing revenues as well as expanding the company into the console market.
And while Funcom’s revenue did increase over the third quarter, this kind of result is to be expected. I’ve brought this up in previous articles but fourth quarter earnings being higher than third quarter are normal, due to the holidays and in this case a new game release. The fourth quarter is normally followed by a drop in sales in the first, which means that any growth is out of the ordinary and therefore better than expected.
As mentioned in previous releases, Funcom’s strategy going forward is to work on small budget, experimental projects working existing IPs into new technologies and platforms. The fruits of this labor will hopefully bear, at minimum, one small game per year and one larger title in development at all times. The Park is the first small game to be released under this plan with Conan: Exiles the first large title.
(Source: Funcom)
Square Enix Releases 9-Month Finance Report
Square Enix today has released their nine month period report ending December 31, 2014, and the news is good. Compared to the report from the same time last year, figures have increased across the board in substantial numbers. Operating income has shown an 89.6% boost to $126.02 million, net sales up 16% to $1.01 billion, net income up 110.8% to $92.8 million, and ordinary income up 65.6% to $140.73 million.
In their filing, Square Enix pointed toward the success of mobile and PC browser platforms for its success, titles like Sengoku IXA, Dragon Quest Monsters Super Light, and Final Fantasy Record Keeper. MMORPGs such as Final Fantasy XIV and Dragon Quest X were also noted for “making favorable progress.”
Also contributing to Square Enix’s success is the continued growth of comics and merchandise licensing, while the arcade sector has maintained itself despite decreased sales through efficient store management. Overall, Square Enix projects the end of year sales to hover around last year’s figures.
(Source: Square Enix)
Reminder: Tentative Schedule For Quarterly Releases
January is upon us, and that can only mean one thing: the 2014 fiscal year is ending and the 2015 fiscal year is beginning, well for most people. This year MMO Fallout plans on expanding our coverage of quarterly reports with even more analysis, so now is as good a time as any to show off the anticipated schedule for this year’s coverage:
- February: Q4 2014 Reports
- May: Q1 2015 Reports
- August: Q2 2015 Reports
- November: Q3 2015 Reports
Presently MMO Fallout more heavily covers NCSoft, Perfect World Entertainment, Star Vault, with heavier coverage of Electronic Arts and unconfirmed other companies coming. I will be covering Square Enix, but only in their annual reports.
I will make a note in the actual report, but Square Enix’s fiscal year runs a little different from the other companies, so try not to be too quick in hitting those comments when you see “annual report for 2015 fiscal year” being published in May. Once again, Square Enix’s 2015 fiscal year roundup is published in May, as it covers April through March. Clear as mud? Good.
If you have any ideas for content you’d like to see added in the quarterly roundups, go ahead and drop a comment.
Perfect World Q3 2014 Finances
Perfect World International has released their third quarter finances for 2014, and the results are bound to be interesting. For the quarter, the developer/publisher reported a 5% increase in revenue to $158.7 million USD, although gross profit decreased slightly from the same time last quarter, and the company posted an operating loss of $3.8 million. Mr. Robert Xiao, Perfect World CEO, attributed revenue growth to the strong performance of DOTA2 which the company publishes in China, as well as Forsaken World and CrossGate Mobile. The blame for the quarterly losses, however, is being pointed at the U.S subsidiary.
In view of U.S. subsidiary’s recent performance and near-term business outlook that are below our expectations, we recognized acquisition-related impairments in this quarter. However, we are still confident in the long-term prospects of our U.S. subsidiary given its strong R&D and operational capabilities as well as promising pipeline.
Xiao expressed hope in the US subsidiary’s long term prospects, noting its “promising pipeline” as well as strong R&D and operational capabilities.
(Source: Perfect World Entertainment)
Funcom Q3 2014 Financials
Funcom has released their third quarter finances for 2014 and the results are decidedly negative. Revenues for the quarter decreased from $3.1 million last quarter to $2.6 million this quarter. Funcom’s main source of revenue last quarter derived from the cash-positive operations of Age of Conan and The Secret World, while revenue overall fell due to weak in-game sales from $3.1 million to $2.6 million.
This past quarter saw the release of two mission packs in The Secret World, as well as updated versions of high-end raids in Age of Conan. Issue #10 of The Secret World is expected to go live later this holiday season. Lego Minifigures Online left open beta on October 1st and has since failed to meet expectations of player numbers and revenue. The game will be released on Mac as well as iOS and Android operating systems in 2015.
And finally, the release notes that Funcom has the has the ability to fund its operations for the next twelve months, continuing to support its games and work on the development of a new title in 2015.
(Source: Funcom)
NCSoft Third Quarter Finances
NCSoft has released their third quarter finances, and the news is good. While sales decreased 1% since last quarter, they amounted to approximately $195 million. Operating profit increased 25% quarter over quarter to $74.15 million, with pre-tax income up 33% and net income up 43% to $79 million and $69 million respectively.
Increased revenue was attributed to sales in Aion, Lineage, Lineage II, and Blade & Soul in Korea. Wildstar’s income dropped substantially, down to $14 million from $27 million during its launch quarter. Guild Wars 2, meanwhile, had its third straight quarter of falling revenue, down to $17.95 million from $21 million last quarter and $31 million of its previous peak in the fourth quarter of 2013. Korea once again made up the bulk of NCSoft’s sales, an increase over last quarter to 65%. The US and EU, which were combined into the same category, amounted to 18% of sales, with Japan at 5%, Taiwan at 1% and an addition 10% from royalties.
(Source: NCSoft)
CCP's Latest Financial Report Shows Troubled Times
CCP Games has released their latest financial statement, and the results are a showcase on the company’s latest round of problems. Due to decreased revenue, CCP announced that they have shut down their San Francisco offices and laid off two key US executives: CFO Joe Gallo and CMO David Reid. The cancellation of World of Darkness, which we learned about earlier this year, reportedly brought about a substantial cost including the cost of terminating employees and writing off assets.
Revenue for the first half of 2014 amounted to $36.5 million, down slightly from $36.7 million last year, however EBITD (Earnings Before Interest, Tax, and Depreciation) was down to $4.5 million from $8.3 million last year.
(Source: Gamasutra)
Star Vault Profits Continue To Drop In Q2
Star Vault has posted their second quarter finances for 2014 and the results are not pretty. Net sales amounted to approximately seventy thousand dollars, down over 30% under the one hundred five thousand in the first quarter. Net profit, meanwhile, took a nearly 80% dive down to one hundred fifty two thousand in the red compared to eighty six thousand in the red for the first quarter.
The report notes that the number of subscriptions dropped in the second quarter. Player activity has dropped over the summer which Star Vault believes may be related to waiting for the territory control patch to be released. During the same quarter, Star Vault has also been at work to make Mortal Online compatible with the Oculus Rift.
Henrik Nystrom’s quarterly statement:
In April, we announced an updated development plan to allow time for testing and bug fixing prior to the launch on Steam, as the content and quality are prioritized over making a quick launch. During the first half of 2014 has been fully focused on getting the TC patch (Territory Control) with brand new unique features, completed and we went into the testing phase at the end of June.
As expected, the number of players has decreased over the summer, which may be partly due to the players wait for the TC patch will soon be released. At the end of the period, the reduction of the number of players stalled.
In parallel with the TC construction, we have worked with the new continent as planned, where most is via outsourcing. With the new continent will face in Mortal Online will be doubled and the new Territory control, we will be able to offer unique features.
During the quarter, we have also developed a full support for virtual reality headset Oculus Rift that lets you see the game world in a completely different way; when you turn your head the same thing happens in the game and you look around. It also sees the depth and 3D by Oculus, which may provide some benefits in Mortal Online because you always play the game in first person view.
We plan to further develop support for Oculus Rift hardware (now owned by Facebook) so that this is clear until the release date of Oculus Rift published. There is a huge interest in this among the players and we believe that the combination of Mortal Online and Rift Oculus will provide a gaming experience beyond the ordinary.
Henrik Nystrom
CEO, Star Vault AB
In the long term, Star Vault plans to develop new titles however no other information has been given.
Editor’s note: Quarterly reports are provided by Star Vault and publicly available via the Aktietorget stock exchange. All monetary values are presented in Swedish Kroner and are converted to US Dollars for your convenience using rates provided by Citibank NA and reflect trading values on the day of reporting. Henrik Nystrom’s statements are automatically translated by Google and some context/grammar may be lost in the translation.
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