It’s been five months since City of Heroes shut down, and the more we hear about the events surrounding the closure of Paragon Studios, the less realistic that NCSoft’s explanation that they had “exhausted all options” seems to become. Gamasutra has published a very informative piece on the closing of Paragon Studios, detailing how Paragon Studios management attempted to buy out the studio, its employees, and its games. Due to a last minute roadblock, the deal fell through and we all know what happened next.
“It was very much a surprise. We all were really working as if things were going to work out. … It was business as usual right up until the last day.”
-Matt Miller, former lead designer at Paragon
You can read the rest of the three page article at the link below.
City of Heroes is undoubtedly the most surprising shut down of the year, not to mention the show of support for the game by its community during its last days.
You didn’t think that the drama surrounding City of Heroes was over just because the servers had shut down, did you? Well think again. MMORPG.com has posted an article today detailing exchanges between NCSoft and a former Paragon Studios employee over the fate of City of Heroes, and as usual the two pieces of information directly clash with one another. According to the source from Paragon Studios, City of Heroes had been profitable even before the transition to free to play, bringing in twelve million annually compared to four million in operating costs. NCSoft apparently wanted $80 million to sell City of Heroes to another developer, however they valued the game at $3 million for tax purposes. Ultimately, however, the game was shut down as while the game was profitable, the profits were not “what they needed to be,” and Paragon wound up the weak link in NCSoft’s restructuring.
MMORPG.com asked for a comment from NCSoft, and received the following note from Lincoln Davis, Director of Corporate Communications:
“It is disappointing that such inaccurate information was provided to MMORPG by an anonymous source and is being reported on as news. The operating cost, annual revenue figures and other financial information shared by this anonymous source are simply wrong. The studio was unprofitable before the shutdown. Both NCSOFT and Paragon Studios were incredibly proud of the transition of City of Heroes to a Free to Play business model, but unfortunately it wasn’t enough to support the studio’s needs. We made the difficult decision to close Paragon Studios and sunset City of Heroes because the franchise no longer aligned with the long term profitability goals for the company.
“While we looked to sell the franchise multiple times, we were unsuccessful in finding a suitable partner that we thought would support City of Heroes’ fans in a manner they were accustomed to for years to come. Closing a studio and sun setting a beloved franchise is never an easy thing to do for the publisher, the developer or the fans. This was not an easy decision to make. The Heroes and Villains have taken to the skies of City of Heroes for the last time, but the game and community will remain in our memories. We truly thank our fans for their years of support and we hope they understand the difficult position we were in when making the final decision.”
I’d like to look at one particular node: Paragon Studios. Now, the anonymous source claims that Paragon Studios had another game in the works, a Lost meets Minecraft game, which means that Paragon was eating far more money than simply keeping City of Heroes optional. Lincoln Davis doesn’t say that City of Heroes was unprofitable, and one can only imagine that such a game wouldn’t consume three million dollars a quarter in upkeep alone. Rather, Lincoln Davis specifically states that “the studio” was not profitable, referring to Paragon Studios itself. It is entirely possible that while City of Heroes was profitable, the second project that Paragon Studios was consuming the rest of its revenue and then some, leaving the studio as a whole as a burden on NCSoft’s finances.
I should point out that the source was anonymous by request, meaning MMORPG.com presumably knows who they are talking to and that person is a credible source in the company. It is also important to note that this is the first time someone from NCSoft has commented directly that Paragon Studios was not making a profit, a comment that should have been made several months ago when Paragon Studios was first shut down. Despite the comment by Lincoln Davis, the latest entry into the City of Heroes saga once again leaves us with more questions than answers.
Was City of Heroes itself profitable? How much was this second project by Paragon Studios costing them to develop? Why didn’t Paragon just shut down the project since it was apparently breaking the bank? What was going on with this second game Paragon Studios was making? If the cost that NCSoft was asking for City of Heroes was not $80 million, as Lincoln Davis claims the figures were “simply wrong,” then how much were they asking for? If Paragon Studios was unprofitable due to these other projects, what kind of money were they losing every quarter? Who decided that shutting the game down now would be better than putting it into maintenance mode and simply ceasing development (like Microsoft recently did with Age of Empires Online)?
We will probably never get a complete answer on exactly what was going on at NCSoft and Paragon Studios that lead up to the shut down, but the statement by Lincoln Davis paints a pretty clear picture that the performance of Paragon as a studio and its other projects, regardless of how City of Heroes itself had been running, played a major part in the studio being shut down. There is an answer somewhere, and it is likely much more complicated than any of us will be able to figure out.
City of Heroes is undoubtedly the most surprising shut down of the year, not to mention the show of support for the game by its community during its last days.
You didn’t think that the drama surrounding City of Heroes was over just because the servers had shut down, did you? Well think again. MMORPG.com has posted an article today detailing exchanges between NCSoft and a former Paragon Studios employee over the fate of City of Heroes, and as usual the two pieces of information directly clash with one another. According to the source from Paragon Studios, City of Heroes had been profitable even before the transition to free to play, bringing in twelve million annually compared to four million in operating costs. NCSoft apparently wanted $80 million to sell City of Heroes to another developer, however they valued the game at $3 million for tax purposes. Ultimately, however, the game was shut down as while the game was profitable, the profits were not “what they needed to be,” and Paragon wound up the weak link in NCSoft’s restructuring.
MMORPG.com asked for a comment from NCSoft, and received the following note from Lincoln Davis, Director of Corporate Communications:
“It is disappointing that such inaccurate information was provided to MMORPG by an anonymous source and is being reported on as news. The operating cost, annual revenue figures and other financial information shared by this anonymous source are simply wrong. The studio was unprofitable before the shutdown. Both NCSOFT and Paragon Studios were incredibly proud of the transition of City of Heroes to a Free to Play business model, but unfortunately it wasn’t enough to support the studio’s needs. We made the difficult decision to close Paragon Studios and sunset City of Heroes because the franchise no longer aligned with the long term profitability goals for the company.
“While we looked to sell the franchise multiple times, we were unsuccessful in finding a suitable partner that we thought would support City of Heroes’ fans in a manner they were accustomed to for years to come. Closing a studio and sun setting a beloved franchise is never an easy thing to do for the publisher, the developer or the fans. This was not an easy decision to make. The Heroes and Villains have taken to the skies of City of Heroes for the last time, but the game and community will remain in our memories. We truly thank our fans for their years of support and we hope they understand the difficult position we were in when making the final decision.”
I’d like to look at one particular node: Paragon Studios. Now, the anonymous source claims that Paragon Studios had another game in the works, a Lost meets Minecraft game, which means that Paragon was eating far more money than simply keeping City of Heroes optional. Lincoln Davis doesn’t say that City of Heroes was unprofitable, and one can only imagine that such a game wouldn’t consume three million dollars a quarter in upkeep alone. Rather, Lincoln Davis specifically states that “the studio” was not profitable, referring to Paragon Studios itself. It is entirely possible that while City of Heroes was profitable, the second project that Paragon Studios was consuming the rest of its revenue and then some, leaving the studio as a whole as a burden on NCSoft’s finances.
I should point out that the source was anonymous by request, meaning MMORPG.com presumably knows who they are talking to and that person is a credible source in the company. It is also important to note that this is the first time someone from NCSoft has commented directly that Paragon Studios was not making a profit, a comment that should have been made several months ago when Paragon Studios was first shut down. Despite the comment by Lincoln Davis, the latest entry into the City of Heroes saga once again leaves us with more questions than answers.
Was City of Heroes itself profitable? How much was this second project by Paragon Studios costing them to develop? Why didn’t Paragon just shut down the project since it was apparently breaking the bank? What was going on with this second game Paragon Studios was making? If the cost that NCSoft was asking for City of Heroes was not $80 million, as Lincoln Davis claims the figures were “simply wrong,” then how much were they asking for? If Paragon Studios was unprofitable due to these other projects, what kind of money were they losing every quarter? Who decided that shutting the game down now would be better than putting it into maintenance mode and simply ceasing development (like Microsoft recently did with Age of Empires Online)?
We will probably never get a complete answer on exactly what was going on at NCSoft and Paragon Studios that lead up to the shut down, but the statement by Lincoln Davis paints a pretty clear picture that the performance of Paragon as a studio and its other projects, regardless of how City of Heroes itself had been running, played a major part in the studio being shut down. There is an answer somewhere, and it is likely much more complicated than any of us will be able to figure out.
The community of City of Heroes weren’t just virtual superheroes this weekend. A team of forty nine battle ready players took to the streets this weekend to fight crime (and cause it) in a 24 hour marathon for the name of freedom, honor, and charity. The marathon raised over $8,500 for Children’s Miracle Network Hospital, a facility that treats children regardless of their family’s ability to pay.
One participant, DrakeGrimm, had the following to say:
“It is events like this that make me honored to stand up and be a part of this community. We are heroes, and this is what we do.”
At the end of the marathon, players grouped together outside City Hall in Paragon City to raise their torches in support of the game and its community. City of Heroes is scheduled to shut down on November 30th, although the community has still not given up hope of saving the MMO. You can find the SaveCOH campaign here: http://www.savecoh.com/
One of the luxuries of being a reporter is that I can always fall back on the ability to say “well it is a press release, so we have to give the benefit of the doubt.” The same way in which we automatically trust what comes out of a developer’s financial statements on the grounds that just because ENRON lied, doesn’t make all companies suspicious. But with NCSoft, even a simple notice on the Main page is suspect, thanks to the precedent set just a couple years back with the forging of Richard Garriot’s resignation. Sorry, fool me once shame on you.
So when NCSoft published the notice that all options had been exhausted when selling City of Heroes, the game’s fans were understandably suspicious. In a report over at Addicting Info, it appears that NCSoft may have been toying with what constitutes “all options.”
Within short order, two different investment groups (speaking while protected by anonymity) claimed that NCSoft had refused to even discuss a sale, and ignored any and all offers. A company which engages in this kind of behavior is not a good steward of its shareholders’ investment.
Only Addicting Info knows who these developers are, but if NCSoft did ignore even the idea of a sale, this news is just fuel on the growing fire that is NCSoft’s community relations following the surprise closure announcement. For now, however, the SaveCOH movement is not giving up hope.
Last week NCSoft published a press release to try and quiet the growing masses of angry City of Heroes players. Breaking their previous silence, NCSoft took to the stage to explain that attempts were made to sell the City of Heroes game, but we’re unsuccessful. And as you can see by the comments on our coverage alone, the community is having difficulty swallowing what NCSoft is trying to feed them.
In a press release by SaveCOH, the community presents several questions that they would like answered by NCSoft, including just what counts as “exhaustive efforts” in selling the game, and why potential buyers are reporting no response to their offers.
What attempts were made to sell the IP address, and how they were exhausted.
• Why a number of potential investors who came forward to try and buy the rights, did not receive a response of any kind from NC Soft.
• How NC exhausted all the option, given that the game is not due for closure until November 30, and the fact that there have only been only 32 business days since the announcement of the ‘sunset’ of the game.
• Why NC Soft did not consider combining servers, putting the game in maintenance mode and keeping it running without further developments or updates, or allowing people to create their own, private servers.
• They are calling on campaigners are also calling on NC Soft to publically name a price that they would be willing to accept for either Paragon Studios, or City of Heroes itself.
• And they want to know why a game that was running ‘well in the black’ and had seen an increase in players in the months leading up to the announcement is being closed down, while games such as Guild Wars which are running at a loss, are being kept alive.
• And why NC Soft failed to respond to an invitation from players to play the game with them, or a letter from best-selling author Mercedes Lackey to endorse NC Soft products, free of charge, for a period of five to ten years, for free, if they would be willing to work with players to keep the servers online.
Hopefully we will have more details in the near future. You can find the SaveCOH movement at http://www.cohtitan.com.
It’s been over a month since NCSoft announced that City of Heroes would be shutting down, and since then the community has thrown virtually every theory out there as to why there hasn’t been any news from the talks with Paragon Studios. The question that lays on everyone’s mind is: If NCSoft isn’t willing to keep the game running, why didn’t they try selling the studio/game? As it turns out, they did try. In an announcement on the City of Heroes website, NCSoft offers a small bit of detail on what went down.
We’ve exhausted all options including the selling of the studio and the rights to the City of Heroes intellectual property, but in the end, efforts to do so were not successful. City of Heroes has a special place in all of our hearts, and we want to ensure its reputation and the memories we share for the game end on a high note.
So there is some kind of reassurance that NCSoft at least made an attempt to save City of Heroes. It may not be the answer that they want to hear, but it is an answer nonetheless.
The hope for City of Heroes grows bleak, but that doesn’t mean the community has given up hope. Since NCSoft’s surprise announcement that City of Heroes would shut down later this year, players have rallied all over the web to keep the superhero MMO online and fighting crime. Or causing it, depending on your stature. City of Heroes player Tim The Enchanter has posted a video entitled “Save City of Heroes,” combining music, in-game footage, and an array of news headlines and podcast audio related to the movement.
Currently the change.org petition to save City of Heroes has gathered over nineteen thousand signatures. So far NCSoft hasn’t said much at all apart from detailing reimbursement plans. But the fans will not go out without a fight.
Sorry, City Of Heroes players. NCSoft has finally broken their silence over the incoming shut down of City Of Heroes, and it wasn’t to announce that the talks with Paragon Studios and player support had moved them to change their minds. Rather, the publisher announced the expected round of compensation and reimbursement.
Players who were VIP as of September 1st will remain so for the rest of the MMO’s life. Outstanding balances as of September 1st will be reimbursed, as well as Paragon Points purchased after August 24th. If your outstanding balance was purchased with a game card, you will be required to submit a support ticket and have NCSoft call you to reimburse via wire transfer. If that is not possible, players will receive a check by mail.
There are several events planned to take City of Heroes to its sunset with a bang.
NCSoft may have announced that City of Heroes is shutting down on November 30th, but that doesn’t mean the community (or Paragon Studios for that matter) are going down without a fight. Since the announcement, the community has rallied in multiple ways, from encouraging users to write to NCSoft, setting up rallies in-game and on the official forums, and signing petitions to keep the game running. The petition has so far amassed over thirteen thousand signatures.
And Paragon Studios isn’t going down without a fight either. According to a post on the City of Heroes forum:
Alpha Wolf: Sorry guys but I don’t have any new update. I know Paragon management is having discussion with ncsoft and investors. Continue get people to sign online petitions, post on game forums, and just continue to make noises so ncsoft cannot ignore players.
Naturally this isn’t a guarantee that anything will come of the talks, but it offers hope to Paragon’s longstanding community.
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