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NCSoft's 3Q 2012 Earnings Report


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#1 Liberis

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Posted 17 November 2012 - 05:56 PM

Has anyone looked at this? I can't decipher it. =\

This was in there though:
Posted Image

http://global.ncsoft...r/earnings.aspx


Edited by Liberis, 17 November 2012 - 05:57 PM.


#2 Voison

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Posted 17 November 2012 - 05:59 PM

They made more money then I did. :qq:
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#3 Xeviant

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Posted 17 November 2012 - 06:14 PM

They're net income was $ 4,315,973.45 over the previous year( a 175% year on year growth).  The values are given in millions of KRW (south korean wong) which is about 1 KRW=.0009 USD.  The YoY graphs show year on year.  So, operating profit (year on year) went up by 150%  Sales is up 123%( year on year).

Edited by Xeviant, 17 November 2012 - 06:15 PM.


#4 el hefe

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Posted 17 November 2012 - 06:40 PM

View PostXeviant, on 17 November 2012 - 06:14 PM, said:

They're net income was $ 4,315,973.45 over the previous year( a 175% year on year growth).  The values are given in millions of KRW (south korean wong) which is about 1 KRW=.0009 USD.  The YoY graphs show year on year.  So, operating profit (year on year) went up by 150%  Sales is up 123%( year on year).

they launched 2 products in 3Q this year vs. 0 last year it only makes sense that profit and sales went up.

#5 ilr

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Posted 17 November 2012 - 09:14 PM

Forget the Y-o-Y crap, look at Q2, they were veering into the ditch and GW2 pulled them out of it.  And they're heading right back into that ditch in Q4 if they keep adding "articifical difficulty" to the game instead of real content.

Edited by ilr, 17 November 2012 - 09:14 PM.


#6 licho

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Posted 17 November 2012 - 09:26 PM

Am i the only one here who is happy that company which gave me so much fun, actually got some profit, and will stay in game to release future content?

Edited by licho, 17 November 2012 - 09:26 PM.


#7 Dove

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Posted 17 November 2012 - 10:35 PM

WOW.

I'm working on my MBA and am a personal finance coach, so here's my take on it:
  • Sales just means gross money the company brought in, also called revenues.They were fairly steady, which means their previous core business was doing its job of maintaining sales while they ramped up new products, namely Blade and Soul and Guild Wars 2. 24% increase from the previous quarter and 23% increase over Q3 2011 is obviously due to massive one-time sales of these products. Commentary: with Guild Wars 2's business model, it will be interesting to see what kind of cash flows it produces in the future. We've known for a long time that ANet stood firmly behind the B2P model, but that there's also going to be adoption curves... people who don't buy on the first wave, and of course we're familiar with ANet's strong implementation of the cash shop to generate consistent revenues. If it's me, I'm guessing over the next year that sales number will start to slow again as people who are going to buy GW2 will buy it, along with possibly some gems moving forward. Obviously this quarter represents a huge momentary spike, but they ought to continue with greater revenues.
  • Operating profit just refers to net gains, so revenues less expenses, overhead, etc. I expect the profit curve for the 3 quarters shown prior to Q2 of 2012 are pretty typical for a game company with an aging product line. The loss in Q2 is probably due to that curve still declining, but moreso than the company taking a loss, I'd bet they were shoveling overtime towards ANet as a surge to get production of GW2 complete. Also consider the cost to the company of the initial manufacturing of box copies and any marketing and PR that went on. Commentary: I think this chart and the next illustrate pretty well why ANet announced release and turned it out so quickly. First, the timing was aligned with what they had originally projected, but second, the parent company was getting eerily close to nil on profits. I'm sure increased work on GW2 helped make those curves look more severe than they ought in Q1 and Q2 of 2012, but declining revenues and profits were probably an incentive to everyone to push GW2 out the door.
  • They did a pretty phenomenal job of converting revenues into profits, and profits into net post-tax income. Look at how the YoY percentages vary between the charts. With an extra 23% of sales, they made an extra 50% profit and a 75% gain in net income. Commentary: While I don't know what production cost curves look like for video game companies, much champagne was poured at NCSoft/ANet over these results.
Edit: Looking at these results and thinking about my commentary, I'm sticking behind my initial analysis of "WOW," but I'd be willing to bet that their analysts were, alongside the congratulations, asking questions about future profitability of GW2. I imagine Q4 will include results from the cash shop and projections for future sales of the game itself and cash shop purchases, and that will help define long-term profitability.

Is the call itself posted somewhere? I may dig around the NCSoft Investor Relations just to formulate more insights.

Edited by Dove, 17 November 2012 - 10:39 PM.


#8 Al Shamari

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Posted 17 November 2012 - 10:50 PM

So their profits spiked... but: http://www.reuters.c...ymbol=036570.KS

#9 ToySoldier

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Posted 17 November 2012 - 11:22 PM

View Postilr, on 17 November 2012 - 09:14 PM, said:

Forget the Y-o-Y crap, look at Q2, they were veering into the ditch and GW2 pulled them out of it.  And they're heading right back into that ditch in Q4 if they keep adding "articifical difficulty" to the game instead of real content.

Agree profit will likely dive, and here is how things are for me:

I've been thinking about revenue for GW2.  As a customer, I have bought multiple copies of the game for myself and friends when I was thrilled at launch.. 2 of my friends that I gifted haven't begun playing yet because they are very busy, and I'm about to tell them: Don't play.  The game is looming to be a gear race and they won't have time to keep up.

Atm I feel the game has the wrong offerings for its gem shop.  BTP salvage kits, etc. are all micro-sales of "power" disguised as convenience.  Gems-to-gold-to-purchase gear in game is also in reality a sale of "power".  With this model GW2's gear escalation is a certain future.  It also means grind and all kinds of painful mechanism are upcoming so that we will buy "convenience" just to ease the pain of micro items needed (from BTP) to ease the grind.

What I'd like to see is a change toward real fun items in the gem shop.  Entertainment is what casual players will pay for.  I do not want to encourage a company to invent pain/grind, then buy items to ease pain/grind.

If GW2 made FoTM rewards cosmetics, like GW2's original promise was, instead of gear, then hardcore players can sell those in BTP and I will buy gems to trade for them.  I will then be happy to stay in the game.  Now I'm not even logging in.

(A side point:  By cosmetics I don't mean just armor skin, weapon skin.  Skins tend to be very limited in demand, being most people only equip one set of gear.  "Cosmetic items" can extend to housing related items, pets, fun gadgets, much much more to extend the beautiful world in a fantasy living way. I'm sure the devs are creative enough to think of ideas for those.  For example, a mermaid pet that will play a tune with her instrument when you ask her to.  A servant in a castle you own that will bring cakes to your guests.)

Edited by ToySoldier, 17 November 2012 - 11:51 PM.


#10 ilr

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Posted 18 November 2012 - 12:39 AM

Yeah those are all factors too of course.  I was only basing my prediction off several past years of closely monitoring both Anet's and Cryptic's influence on profit.  They always, ALWAYS dropped off steadily whenever there wasn't completely new Encounters/Tilesets/Mechanics being added to either game.  Yeah I'm pretty disappointed in them myself right now but that's never influenced my judgment on what their numbers are doing.


Also the Adoption curve Dove just mentioned... . I knew a LOT of gamers from another network who were going to wait this one out.  Needless to say word of mouth won't be bringing those people in anytime soon now.



View PostAl Shamari, on 17 November 2012 - 10:50 PM, said:

So their profits spiked... but: http://www.reuters.c...ymbol=036570.KS
I'd encourage people to actually look at the 6-month b/c THAT'S where you see the real volatility.  This downward slide isn't volatile at all, it's clearly calculated.  And why's that matter?  B/c early this summer was when everyone actually started getting a hands-on feel for the content and the odds makers could really start making their bets.  It's exactly like how Nate Silver predicted the entire election months ahead of the media b/c they was too busy trying to drive sensationalism instead.

And Speaking of politics, I'd also point out the discrepancies between profit and taxed "internationalism" ....
  (IoW: some of their profits are all US-specific loopholes)

Edited by ilr, 18 November 2012 - 01:04 AM.


#11 Khlaw

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Posted 18 November 2012 - 12:50 AM

None of it is extremely useful without context.  Example, profit was probably way down in 2Q12 because they were spending a lot on getting the two games mentioned up and running.

#12 Dove

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Posted 18 November 2012 - 12:58 AM

View PostAl Shamari, on 17 November 2012 - 10:50 PM, said:

So their profits spiked... but: http://www.reuters.c...ymbol=036570.KS

Yeah, I also looked at their stock price over the last year. There's an enormous leap in early September, but a pretty steep decline from there. I wonder how much of that is market driven vs. performance.

#13 I'm Squirrel

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Posted 18 November 2012 - 06:14 AM

View Postilr, on 17 November 2012 - 09:14 PM, said:

Forget the Y-o-Y crap, look at Q2, they were veering into the ditch and GW2 pulled them out of it.  And they're heading right back into that ditch in Q4 if they keep adding "articifical difficulty" to the game instead of real content.

This man speaks TRUTH!

TBH. I think they would've been just fine if they worked on making profit through successful GW1 expansion sales. Or something of the sort. GW1 has gameplay mechanic originality that has never been cloned before, thus having the potential to go even further into "next-gen" PC gaming. But, ArenaNet already dropped that so, it's either bring something new to the gaming world through GW2 or ArenaNet will go bankrupt in the next ~2 years.

Edited by I'm Squirrel, 18 November 2012 - 06:15 AM.


#14 Kymeric

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Posted 18 November 2012 - 04:06 PM

I haven't spent any money beyond the box price yet.  I'm a "smell-the-roses" kind of player, though I play too much to really be considered "casual" if you are talking just time spent logged in.

Having said that, I'm just now getting to the point where I am considering two more character slots so I can have one toon of all seven of the professions I'm interested in.  I'm also just now getting to the point where I'm considering another bank tab, because up to now I've been able to manage my inventory well.

But those are the only things currently in the cash shop that interest me at all.  I refuse to pay real money for anything that only gives me a chance at something.  I want to be able to weigh the gem cost against my perceived value for the item, then decide whether to buy it.  Anything that gives me an RNG chance at something has absolutely no value to me.

There are other things that would get me to spend more real money on this game.

1. Mounts - Yes, I know people hate this idea, but a 60% speed boost, land only mount would be worth money to me.  I like the feel of riding a horse in a fantasy game.  And it would put me out in the world, crossing zones, more than the current waypoint system does.  I promise not to complain when I get dismounted by mobs when I try to ride through them and they engage me in combat.

2. Automatic Town Clothes when in town - As it is now, I don't have an interest in town clothes, because I don't want the hassle of switching to them every time I enter a town, only to have them disappear as soon as I take 2 hp of falling damage.  Another option would be to give me the option for Automatic Town Clothes when not in Combat.  I'll wear them even more, and see them as worth purchasing.

3. Attractive Town Clothes - Right now we most have gag clothes.  Chef's hat, aviator glasses, boxing gloves. :P  I'd like other options beyond my starter set of Town Clothes that I can wear.  Things that are attractive and make me distinctive when out of combat.

4. Name Change Contract - Despite rumors, this hasn't appeared in the CS yet.  I have a level 65 character with a name that people pronounce differently than intended.  I've since come up with something far better, and would like to change to that.  It'd be worth 800 gems to get a new name without having to level from 1 again.

5. Awesome dance emotes - I'd be willing to sink some cash into some cool dances.

6. More stuff that is Account wide, instead of character bound.  As is probably clear by my intro, I tend to make and delete a lot of characters.  I'm not going to put real money down on for something that is going to disappear if I choose to delete a character, or simply lose interest and stop playing that character.

These are all ways ANet could get more money from me without adding gear tiers.

#15 ilr

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Posted 19 November 2012 - 12:14 AM

^ I was adamantly against mounts to begin with, but that was before I experienced the "joys" of rounding up cooking ingredients with less than 1 gold to my name on a level 70+ where just respawning at the nearest WP from an accidental fall costs 1.3 silver.  It was like they didn't even attempt to based WP travel on Distance or personal Income,  but instead almost entirely on level.  A well executed mount system could build off that poor design choice to put a lot of immersion back into the game that some people would really enjoy.


PS:  Not mentioning this to pander to financial concerns either... just trying to stay constructive about what sorts of conveniences they really could be selling to counter all the RNG bullshit that NEXON woman gave us a choice between

#16 Xuphor

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Posted 22 November 2012 - 01:29 AM

Please keep on-topic people. This thread is not about if Ascended gear is ruining the game, it's not about how good the game's content is, it's not about having good endgame. This topic is about NCsoft's financial earning's report.

More off-topic talk will result in warnings.

#17 paradiselight

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Posted 22 November 2012 - 01:44 AM

Some additional info to talk about
1) Nexon bought NCsoft at a share value of 250,000 South Korean won each (source)
2) NCsoft is now trading at a value of 160,000 (chart). Implying a paper loss of 36% for Nexon.
3) Despite the stellar y-o-y jump, NCsoft 3Q profits missed expectations, leading to a 13% slide in share value over a single day (news). You can also see the slide with heavy volume on the charts by choosing a 1-month time scale.

Edited by paradiselight, 22 November 2012 - 01:44 AM.


#18 ToySoldier

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Posted 22 November 2012 - 01:57 AM

View Postparadiselight, on 22 November 2012 - 01:44 AM, said:

Some additional info to talk about
1) Nexon bought NCsoft at a share value of 250,000 South Korean won each (source)

Thanks.  Article being dated June 8 is interesting.  Now ANet is working under 2 higher levels of management.

At a high level, it's very easy for an analyst who know nothing about mmorpgs to simply look at spreadsheets and misjudge the players entirely.  Someone like me, a casual player who just want to have fun, and "get the pain over with", will show up on a spreadsheet as "reached 80, bought exotic gear, stopped logging as much".  Solution: "more gear tread for our revenue."

#19 Green

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Posted 22 November 2012 - 02:30 AM

View PostToySoldier, on 17 November 2012 - 11:22 PM, said:

...2 of my friends that I gifted haven't begun playing yet because they are very busy, and I'm about to tell them: Don't play.  The game is looming to be a gear race and they won't have time to keep up.

In game gear and profit reports mix like oil and water. Any excuse to climb up on a soap box and bitch to the community. lol

#20 ChristianSky

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Posted 22 November 2012 - 02:38 AM

I'm curious as I can't decipher it either. What is their gross revenue, in US dollars, that they got from Q3 2012?

#21 ToySoldier

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Posted 22 November 2012 - 02:47 AM

View PostGreen, on 22 November 2012 - 02:30 AM, said:

In game gear and profit reports mix like oil and water. Any excuse to climb up on a soap box and bitch to the community. lol

It was a statement of a fact from my life to illustrate why revenue can drop.  It was followed by constructive suggestion on better gem store items for the causal players to improve the revenue.  If all that is beyond this discussion, I don't mind at all if the mod deletes it.  But flames like yours offer little in substance, imho.

(To Mod: I welcome you to delete this post if you delete the post I am replying to.  No longer going to answer to posts such as this one, to help keep the thread clean. Thanks.)

Edited by ToySoldier, 22 November 2012 - 03:06 AM.


#22 paradiselight

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Posted 24 November 2012 - 05:57 AM

Actually, the most interesting graph is the one on page 5.

Posted Image
  • Aion generated more revenue than GW2 a year ago
  • Aion is losing revenue pretty quickly.
  • The current conversion rate between KRW and USD is 1 USD = 1085.5 KRW. Using that ratio, we find that GW2 generated a sales of about $42.23 million.
  • GW2 sold more than 2 million copies, so each copy generated a sales of about $21. Ugh, isn't GW2 selling at $60 each?
  • Blade and soul generated 28.7% less sales than GW2. But it has only launched in South Korea and China vs global luanch of GW2.





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