One thing I’ve seen repeated a few times in the wake of yesterday’s announcement is a rumour that City of Heroes / Villains is shutting down because:
- Its game engine is licensed to Cryptic Studios for a period of time; and
- Now that licence period is up; and
- Cryptic’s new owners Perfect World Entertainment (or even Cryptic itself) are asking for too much money; so
- NCsoft is shutting down CoH/V.
Think about it for a second – it doesn’t really stack up.
Point 1 is definitely true – that’s why Cryptic’s name still appears on the bottom of the page, a legacy from the Cryptic / NCsoft deal in buying CoH/V. Point 2 is completely unconfirmed. Point 3 sounds like a plausible reason if the rumour was true (which is the secret of a good rumour – lots of plausible reverse inferencing). Point 4 is… well, see yesterday.
There’s a chance it is true, but I don’t think so. If it was true, NCsoft would have just led with it in their PR release. It gets NCsoft off the hook and makes Cryptic / PWE look like the bad guys – no talk about “not fitting in with the future direction of NCsoft”, just “PWE / Cryptic did it – blame them”. Plus it would have been less of a surprise for Paragon Studios (or at least their management layer) since they would have known this is coming.
And then there’s Paragon Studios / NCsoft spending the required investment turning a game free to play (F2P) throughout 2011 knowing that the engine licence had to be renegotiated mid-2012. That just seems exceptionally poor planning for the F2P conversion to have happened if Cryptic had any kind of power to just turn off the lights. After all, if Freedom had been successful, PWE / Cryptic could have really gone on a gouging spree and / or have an even bigger reason to shut CoH/V down.
I’m aware that for a lot of CoH/V players “Blame Jack Emmert / Cryptic Studios” is the default position, but I don’t see this rumour really being backed by the truth. CoH/V is shutting down due to the decisions of its publisher, nothing more, nothing less.
World Class Villains 
I agree, the rumors are ridiculous. I’d go so far as to say there’s no chance of them being true, in fact.
Another piece of conventional wisdom I keep hearing is that the game is profitable. We don’t know whether the game is profitable or not, though I suspect the game has been losing money at least since Freedom’s launch if not before. That’s only a suspicion, but declining revenues and the close down are indicators that the game was not most likely not making NCsoft any money. Of course, I’d be happy to take a look at a source and change my mind on the “the game is profitable” conventional wisdom, but I don’t believe any such source exists. All we have are the game’s overall revenues, everything else (how much it costs to run & actively develop are the $10,000 questions) is guesswork.
I think CoH/V’s issue might not be that it is profitable, but it isn’t delivering enough revenue back for that profit to be meaningful to NCsoft. Even if it has an operating profit of 50% (very possible for an older title that has long since paid off its development costs; it could even be higher) it would be profitable to the tune of approx. US$1.25m in Q2 2012. That’s a lot for an individual, but not a lot for an publisher owned studio consisting of somewhere between 30 – 80 people.
And that’s just considering CoH/V – I’ve got no idea how much Paragon Studios’ secret title was costing them.
While not a forgone conclusion, I do certainly see this as possible. Too many details are secret to know conclusively , however the actions of NCSoft & Paragon up until now don’t show them as acting as if COH is unprofitable. And even if that is the case it doesn’t mean that Cryptic/PWE are the villains- maybe NCSoft was playing hardball for a cut rate deal while PWE expected something “fair”.
Still the closing date actually gives this rumor far more credence to me. The Cryptic buyout happened November 2007. The game ends.. November 30th, 2012, 5 years later
NCsoft supports a title fully, right up to the point they don’t. With Tabula Rasa I’m pretty sure that only two months before its closure was announced they had a high level management figure saying they were 100% behind that title.
When SOE announced that Star Wars: Galaxies was shutting down, they were sure to include a statement about how it was licensing with LucasArts that was the problem. It would have been easy for anyone at Paragon Studios to include a similar statement, especially since there’s no love lost between Paragon and Cryptic for certain individuals.
It is possible that the licensing issue had something to do with it, but it’s a lot more likely that CoH/V has failed to meet NCsoft’s financial targets and that’s been part of the impetus to pull the plug.
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