SOE Sold, Just Games or Console?

[Luridis]

So, there's this big announcement about Sony Online Entertainment...

 

Are they just about games and the online service or do they house the PlayStation hardware division as well?

 

At any rate, I feel for the developers there. Investment acquisitions are almost never good, they're about squeezing every dollar out and then dumping the company on a longer term investor. Usually, lots of people get canned and benefits are reduced, not to mention quality going down the tubes.

[Amentep]

Sony Computer Entertainment is, AFAIK, the group that handles playstation hardware, R&D and software.

 

Sony Online Entertainment was the MMO division, which AFAIK again was the MMO games and the infrastructure to support them.

[Tale]

It's just the MMO division.  Everquest, Planetside, DC Online, et al.

[Hurlshort]

Yeah, I'm concerned, but it's not like Sony was doing a ton to develop their MMO's.  They had downsized quite a bit over the years.  Still, it had a nice stable of games and they were all receiving decent support, so hopefully that will continue.  It will be interesting to see what this means for Everquest Next.

[ktchong]

Seems to me that Blizzard is the only company that is actually earning real money from MMO.   Yet all the other idiots still got into - or want to get into - the MMO business, and then got their arses handed to them by Blizzard, (i.e., BioWare, Bethesda.)  Seriously, MMO is an over-saturated market.  The MMO total market share is not growing.  Everyone who wants to play MMO is married to World of WarCraft.  Then there are the rest of us who absolutely refuse to play MMO.  BioWare, Bethesda or whatever companies that try their hands on MMO would never get a dime or minute out of us for their MMO.

Edited February 8, 2015 by ktchong

[Hurlshort]

Seems to me that Blizzard is the only company that is actually earning real money from MMO.   Yet all the other idiots still got into - or want to get into - the MMO business, and then got their arses handed to them by Blizzard, (i.e., BioWare, Bethesda.)  Seriously, MMO is an over-saturated market.  The MMO total market share is not growing.  Everyone who wants to play MMO is married to World of WarCraft.  Then there are the rest of us who absolutely refuse to play MMO.  BioWare, Bethesda or whatever companies that try their hands on MMO would never get a dime or minute out of us for their MMO.

 

Considering the MMO market is thriving with a number of titles, it seems to me like you don't know much about the market or the genre.  You don't need anywhere near WoW numbers to turn a healthy profit.

 

Edited February 8, 2015 by Hurlshot

[Mamoulian War]

 

Seems to me that Blizzard is the only company that is actually earning real money from MMO.   Yet all the other idiots still got into - or want to get into - the MMO business, and then got their arses handed to them by Blizzard, (i.e., BioWare, Bethesda.)  Seriously, MMO is an over-saturated market.  The MMO total market share is not growing.  Everyone who wants to play MMO is married to World of WarCraft.  Then there are the rest of us who absolutely refuse to play MMO.  BioWare, Bethesda or whatever companies that try their hands on MMO would never get a dime or minute out of us for their MMO.

 

Considering the MMO market is thriving with a number of titles, it seems to me like you don't know much about the market or the genre.  You don't need anywhere near WoW numbers to turn a healthy profit.

 

 

 

I mostly agree with you, but having ****loads of revenue, does not automatically means you are not in red numbers in the end.

 

And your table also proves few of ktchong's points. MMO market is dominated by WoW and NCsoft. For a new MMOs, it is very hard to get out of red numbers after all. The biggest example is SW: TOR. The game was a reason why EA bought Bioware in the first place IMO, that's 860 mio. Let's say Bioware was worth 4/5 of the price (688 mio) of whole Bio/Pandemic bundle and the development cost 200 mio (not included marketing costs and royalties).

 

http://venturebeat.com/2012/01/20/ea-spent-only-200m-to-make-star-wars-the-old-republic/

 

The estimate of the development time and all expenses included is at 500 mio.

 

That makes 1,188 bio of money spent on that game. So even if the revenue would be profit, which is not, the game would get into black numbers maybe in 7 - 8 years, because most of the money earned was from the initial sales, and these revenues are not in the table as well.

 

As we all know the difference between revenue and profit can be astronomical. EAs revenue in 2013 was 3,797 bio. GAAP net income was 98 mio. Non-GAAP revenue and net income was at 3,793 bio and 264 mio respectively.

 

http://investor.ea.com/releasedetail.cfm?ReleaseID=762744

 

So coming out of these numbers, my uneducated guess is, that it might take them a "little bit" more that 7-8 years to get out of red number with this game

 

FFXIV is very similar story, but so far without numbers provided (feel free to correct me if I missed them)

 

But on the other hand FFXI was confirmed by Wada-san as a most profitable FF ever.

 

http://www.famitsu.com/news/201206/23016877.html

 

http://andriasang.com/con1mt/ffxi_profits/

 

But nevertheless it took them 10 years to get there.

[Hurlshort]

You are entirely correct MW.  TOR is a really bad case.  They simply spent way too much in development.  There is really only one game that has ever managed to maintain a high subscription rate over the course of years, so it should not be the model, it is the exception.  That being said, they cut back on staff, changed to a different business model, and now they aren't bleeding money every month.  In fact they have become a healthy contributor to EA's profits.  They are operating in the black on a monthly basis, but I have no idea how far they have to go to recoup the initial investment.  

 

Elder Scrolls Online has kept their profit/loss reports close to the vest.  The fact they haven't released on consoles makes me think they are struggling, but with the success of so many others going to free to play, I no longer see that as a sign of doom.

[Hurlshort]

Since the thread is about Sony Online Entertainment, I tried to see what type of money they are pulling in.  They have a huge stable of MMO's.  But it is hard to get a clear picture what is doing well there.  I would guess the Everquest games and DC Universe Online are stable, I've played those a few time over the years and they are always healthy in both players and content.

[Hurlshort]

Apparently the former SOE is getting hit hard with layoffs and resignations.  It is not looking good for Everquest and all the other titles developed there.