Q1 2014 – MMO Fallout

Funcom has released their quarterly returns for the first quarter of 2014, and the results are certainly interesting to look at. Revenues have remained relatively stable, decreasing slightly to $3.8 million from $4.2 million last quarter. Funcom has seen a steady decrease in revenue since the launch of The Secret World, with revenues at nearly half of what they were in the first quarter of last year, $6.3 million. Despite the lowered revenue, Funcom’s cash position improved from $2.5 to $2.8 million over last quarter. The company also noted that 15 million shares were sold to the tune of $5.5 million which was used to pay interest bearing debt.

The upcoming Lego Minifigures video game hit all of its major milestones and is on course for a beta launch in June 2014 and a commercial launch later this year. Nothing has changed regarding last year’s investigation into Funcom by Økokrim. Funcom’s offices were raided last year by the Norway’s economic crimes unit and is currently being investigated for possible insider trading and negligence. There are no details on how long the investigation will take.

(Source: Funcom presentation)

NCSoft has released their finances for the first quarter of 2014, and the results are certainly worth taking a look at. Revenues and profits fell by approximately 20% in the first quarter due to a drop in sales in Lineage 1. The report states that in-game item sales were “scaled back,” and were responsible for much of the loss in profit. Lineage’s sales dropped by nearly half, from $70 million last quarter to $40 million this quarter. Lineage II and Guild Wars 2 saw a drop in revenue, while Aion and Blade & Soul increased by a modest amount.

Blade & Soul continues to perform strongly in China, adding to NCSoft’s royalty revenues. NCSoft did not market as heavily in the first quarter, seeing marketing expenses drop nearly 40%. As for demographics, royalties now make up 25% of the overall income distribution. European revenue dropped heavily, down to just under 3% of NCSoft’s total income. Korea dropped off heavily but still remains at the top with 52% of revenue, and North America increased slightly to 13%.

(Source: NCSoft Financial Documents)