First Quarter – MMO Fallout

Nexon Boasts 11% Boost In Sales

Riders of Icarus

Nexon has posted its latest financial statement for the first quarter 2016 and the results are indeed something to write home about. First quarter revenue amounted to 57.5 billion yen ($530 million USD), an 11% increase over the same period last year. Sales were driven partially due to the higher-than-anticipated sales of Dungeon&Fighter in China.

Alternately, operating income underperformed primarily due to the impairment loss on Gloops’ goodwill of 22.6 billion yen. Nexon bought Gloops for $486 million cash back in 2012. Impairment loss refers to the cost of acquisition minus the depreciation.

Nexon’s earnings call will take place later this morning.

(Source: Nexon press release)

Despite Claims of Rampant Piracy, PC Accounts For 25% Of Ubisoft Sales

Ubisoft has released their first quarter sales figures for the 2015-2016 fiscal year with results that are better than expected. While the company had forecast earnings of €80 million, the company actually pulled in €96.6 million. Sales have been strong thanks to the performance of Assassin’s Creed as well as continued sales of Far Cry, Watch Dogs, and The Crew. As far as platforms go, digital revenues more than doubled from 23% to 56% of total sales over last year.

Sales for the first quarter of fiscal 2015-16 came to €96,6 million, down 73.2% (75.6% at constant exchange rates) compared to €360.1 million for first-quarter 2014-15 which saw the release of Watch_Dogs®.

Geographically speaking, Europe and North America still hold the majority of sales while the ‘rest of the world’ has grown from 12% last year to 20% of market share this year. On platforms, the Playstation 4 is in a clear lead over the Xbox One (27% compared to 11%), with the latter bringing in as many sales as the old generation of consoles (360 and PS3, 11% each) while the Wii and WiiU combined only accounted for 3%.

The PC, on the other hand, has seen a major growth in revenue share, from 14% last year to 23% this year, giving it more than twice the sales of the Xbox One. The results are even more impressive if you believe Ubisoft’s estimation from 2012 that the PC has a 95% piracy rate.

“On PC it’s only around five to seven per cent of the players who pay for F2P, but normally on PC it’s only about five to seven per cent who pay anyway, the rest is pirated. It’s around a 93-95 per cent piracy rate, so it ends up at about the same percentage. The revenue we get from the people who play is more long term, so we can continue to bring content.”

Second quarter releases by Ubisoft include Might & Magic Heroes VII, Rabbids Appisodes, and Toy Soldiers War Chest.

(Source: PC Gamer)

Funcom Reports Lower Revenues In First Quarter

Funcom has released their first quarter finances for 2015, and the results are a bit of a mixed bag. Revenue fell over the first quarter from the same time last year, down from $3.8 million in 2014 to $2.7 million. Despite this drop, Earnings Before Interest, Tax, Depreciation, and Amortization came out higher, $487 thousand compared to $451 thousand. In line with revenue falling, Funcom was also able to cut operating costs down to $2.2 million, $1.4 million down from the same point nearly a year ago.

Over on the operations side, Funcom’s bread and butter continues to be its three profitable MMOs (The Secret World, Age of Conan, and Anarchy Online). Lego Minifigures Online is set to launch on tablets this summer, however the game will be undergoing a business transition to buy to play instead of its original free to play. In the report, Funcom admits to overestimating the buying power of its target audience, and has committed to making changes to improve on player satisfaction.

(Source: Funcom)

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