NCsoft has released their financials for Q1 2010. Following up on my earlier post about City of Heroes / Villains’ performance, I’ve had a look. Sadly, results aren’t good.
Chartreuse
In Q1 2010, CoH/V recorded 3 348 m Won (about US $2.94m) – it’s lowest quarterly revenue to date. Previously, it was the Q4 2009 period that held the lowest quarterly revenue (3 927 m Won or US$3.36m).
Over that time, the South Korean Won has strengthened slightly against the US$, which doesn’t help CoH/V’s reported revenue but isn’t the major cause of the decline.
Here’s a chart of CoH/V’s reported player numbers (that ceased being reported in Q3 2008) versus revenue in $US.
CoH/V's revenue continues its decline. (Click on the image to see a bigger version.)
Q1 2010 was not a particularly big quarter for CoH/V, but revenue dropping by about 15% (using the Won figures) is not what a MMO developer wants to see ahead of the release of an expansion. Taking the very rough approach of dividing the quarterly figure by (3 x $15 =) $45 to determine approximate active account numbers, this returns a value just over 65k. As previously discussed, this is likely an underestimate by at least 10%, but even so it points to CoH/V having a declining player base that currently probably sits in the realms of 70k – 80k active accounts.
It’s The <blank>, Stupid!
So, what’s driving the decline? Some have said it is the economy and that is likely a motivator, but it’s a poor reason. If you have an entertainment budget, $15 a month for something that can grant numerous hours of entertainment is fantastic value… assuming you are playing those hours. Outside of the repeated Valentine’s Day Event, Q1 2010 held no unique content for existing CoH/V players.
Goro may just end up suing me for name infringement.
The development focus of CoH/V is currently on the Going Rogue expansion. In my opinion, the marketing and communications around GoRo has been awful if they are looking to attract new or returning players to it. The Overview page makes GoRo seem pretty bland and is missing information that the devs have announced on the official forums (e.g. the other new powersets of Kinetic Melee and Electric Control). With launch expected in July, there isn’t that much time to get in front of players and get them interested.
Even the current players I speak to appear to be adopting a ‘wait and see’ approach to GoRo, because although new powersets and features like side switching and Incarnates sound interesting, there isn’t that much information available on specifics. People seem most excited about Praetoria, but even information about how the gray-side is going to interact / intersect with existing blue-side and redside-systems is thin on the ground.
There are also factors like increasing competition in the MMO space, especially among free-to-play titles, that can draw players away. However, in my opinion, the key reason behind the decline is that existing CoH/V players are being given little reason to stay (at least during that Q1 2010 period).
The Words of the Profit
I’ve got no doubt that CoH/V is still a profitable venture, but ‘profit’ always needs to be weighted up in the MMO genre against ‘worth investing further in’. GoRo is the must-win opportunity for CoH/V if it wants to be considered for a reasonable development budget versus being put in maintenance mode. Paragon Studios is working on another MMO so it is reasonably safe from a visit from NCsoft’s axemen, and it continues to hire new people.
Post-GoRo will be an interesting time. As someone who has played CoH/V since launch, I can’t see GoRo reversing the decline that has set in and growing CoH/V outside of its launch boost. At six years old, CoH/V is what it is and to attract new players it would need to change some of that ‘CoH/V-ness’, which requires substantial reinvestment and also risks turning off current players. CoV was only seen to bring in 60 000 new accounts to the player base and that was a whole MMO – GoRo is an expansion that will only provide new zones for levels 1 – 20 and then relies on systems such as side switching and max-level Incarnate changes to keep the players involved.
We’ll see. It will be the quarter or two following GoRo’s launch that will tell the story about CoH/V’s future.
UPDATE 21 May 2010: Fixed the picture link.
World Class Villains 
For me, there are two reasons why I’m not devoting hours per day playing CoH like I used to.
One, the computer has finally fallen off the cutting edge, and with Ultra Mode released, my visual play experience “isn’t as good as it could be”. Sadly, in order to upgrade the system to optimal UM specs, I would essentially have to replace the entire system. So I’m making do with the OpenGL mode, and cutting way back on particle physics and fancy power effects.
Two, the similarity of the missions. I’ve seen every map in the game with the exception of the Hamidon (and I’ve no intention of doing that one, the mini-Hami in the LGTF kicked my ass). I’ve run into every enemy group at least once. Therefore, every instance mission is “meh, I’ve seen this one.” After 5 years of playing, I would like to see new places to play in.
I LOVE the community, the roleplay opportunities, the costuming, the powersets… but the GAMEPLAY has gotten extremely stale. This is in opposition to WoW, which doesn’t have nearly the customization (and relies on add-ons by other people to expand the roleplay opportunities) but has taken mission design and raid design so many steps further it’s not funny. The WORLD is bigger, there’s more to explore, there’s in-jokes everywhere, and each dungeon requires you to think things through rather than ‘go in shooting’.
I hate to admit it, but Blizzard has Paragon Studios beat when it comes to keeping players PLAYING.
I don’t know if CoH 2 will expand beyond Paragon City/Rogue Isles/Praetoria, but in my view, they really need to turn their attention to new things to DO. Costume bits and new powersets are cool, but giving players entire new zones to explore and new and surprising instance maps to challenge them is what will keep them at their computers, having fun.
I LOVE the community, the roleplay opportunities, the costuming, the powersets… but the GAMEPLAY has gotten extremely stale. This is in opposition to WoW, which doesn’t have nearly the customization (and relies on add-ons by other people to expand the roleplay opportunities) but has taken mission design and raid design so many steps further it’s not funny. The WORLD is bigger, there’s more to explore, there’s in-jokes everywhere, and each dungeon requires you to think things through rather than ‘go in shooting’.
+1
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I would be extremely interested in seeing a further analysis of Q2-Q4 revenue derived in 2010 by NCsoft from City of Heroes now that the Going Rogue Expansion has been released (and very likely is past its sales spike at this point), and also now that the Incarnate System has recently gone live. I have been wondering how many old players have reactivated their inactive accounts simply for the Incarnate System — even though they had to purchase the Going Rogue Expansion to use it.
I do mean to go back and look at the most recent data release, but it’s a busy Xmas period and I’ve also got a few games I’m playing that I’d like to finish. 🙂
Let’s say I’ll do it “soon”.
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Have you seen CoH recently? CoX is a veritible ghost town, only two servers (Virtue and Freedom) have any “real” traffic, and the largest majority of players are either farming or begging to be farmed in Atlas. It’s getting harder and harder to team in the game even during peak hours. A friend of mine has 19 level fifty toons! Nineteen! Almost all of them are from farming!
Consider WoW’s gameplay–which is very anti-farming. Also consider the fact that WoW runs its daily maintenance cycles in the background, allowing people to play the game uninterrupted. Also consider the fact that their content keeps inceasing and increasing for the upper-level players and it’s easy to understand why it has a subscriber base of 12 million vs. CoH who is languishing under the 200k mark.
Why has Blizzard kicked ncsoft’s butt in the MMORPG arena? The answer is remarkably simple: the staff is required to play the game… and generally like playing the game. VERY few of the devs working on CoH actually play the game and I happen to know for a fact that over half of the devs at WoW play on a regular basis. That’s the reason why CoH is building it’s own coffin right now and why WoW is laughing all the way to the guild bank.
I haven’t played CoH/V in a while, but do come back to look at the forums from time to time. That it seems to be the same old faces and very few new accounts is a potential indication that CoH/V really isn’t bringing in new players.
WoW is potentially an unfair comparison due to its sheer scael, but I find it interesting that a lot of the old CoH dev faces have left. Yes, five or six years is a long time to work on one game, but this stage of CoH/V’s life was meant to be the “we’ve got lots more investment and resources, this will be awesome!” and all that has happened is that the player base has continued to drop.