Funcom Q1 2017 financials: ‘Most profitable quarter ever,’ Secret World Legends delayed on Steam

Conan Exiles performed beautifully for Funcom, at least during the first part of this year, the company’s investor report for the first quarter revealed today. The survival sandbox’s early access launch in February helped propel Funcom’s once-beleaguered revenues to five times their state this time last year, making it the “most profitable quarter ever” in the history of the studio. The Xbox One and PlayStation 4 releases are on track for Q3 2017 and Q1 2018, respectively.

The company reiterates that the reboot of The Secret World as Secret World Legends will make its recently announced June 26th debut, but the Steam launch will be delayed until July 31st as a result of “crowded market conditions with multiple MMO releases in May/June on Steam” — those being Black Desert’s Steam launch, Elder Scrolls Online’s Morrowind launch, and Final Fantasy XIV’s Stormblood. Seriously, nobody else should even try launching that month.

“The Company expects the majority of players after launch to be newcomers to the game, but is also working to make it worthwhile for as many veterans of The Secret World as possible to continue playing Secret World Legends. Due to the high uncertainty regarding a Free to Play business models the Company expects the development team to need to tweak the monetization mechanisms of the game in the months following launch. Paid User Acquisition will gradually be tested and introduced in tandem with the monitoring and tweaking of the game’s monetization KPIs.”

The report reiterates that Funcom Oslo is concepting another Conan game, while Funcom Durham is working on yet another project “in [an] early concepting stage.” Staffing is expected to rise to 120-130 by the end of the year.

Anarchy Online and Age of Conan, which were unceremoniously maintenance moded in last quarter’s report with no advance warning to press or players, are not mentioned, though under the strategy section, there’s this bit:

“Additionally, the company will keep developing and supporting the existing MMORPGs as they are an important source of revenue and drive the internal IPs.”

Source: Investor report. Thanks, Daniel!
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48 Comments on "Funcom Q1 2017 financials: ‘Most profitable quarter ever,’ Secret World Legends delayed on Steam"

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strangesands

Honestly, they should just wait until October for a thematic launch.

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Kevin McCaughey

It seems to just be about the numbers now at Funcom. Players don’t matter unless it is new ones with deep pockets and no sense. Very disappointed,

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Phil Gillespie

Game studios don’t run on pixie dust and magic tricks, they are no different to any other organisation.

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Denice J. Cook

I have the feeling that Funcom has been skirting bankruptcy for many years now. Running in the black is the only other option besides closing down for good.

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Zen Dadaist

“Additionally, the company will keep developing and supporting the existing MMORPGs as they are an important source of revenue and drive the internal IPs.”

Meaningless copypaste from their previous quarter’s report. Those communities have been cut off entirely from all FC communications. I hear rumours that a GM was spotted in AO a couple of weekends ago. That’s the level they’re at – not one communique to anyone about anything. Just dropped like a hot potato. I get that they’re excited about CE and SWL but talk about a kick to the stomach to those of us who were dedicated enough to have paid them for subs over the years for their older games. We were not given so much as a ‘bye’ by a community staffer. First sign of success is to give the middle finger to those who held on.

Yes, I am feeling shittily treated by FC. Yes I am regretting the support I showed them through the years.

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kanbe

I agree they should deal SWL AS its timing is horrible for releasing. That said since they’re only delaying the steam launch instead of the full game I’m getting the feeling that “launch” is going to be more of an open beta kind of deal.

With the info we have now about how some zones and weapons arnt even in the closed beta yet that’s my impression

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Megalus Doomslayer

To summarize: Funcom has no expectation that their main reason for this project will in anyway result in the intended goal… and I thought the Dragon was chasing after a gamble…

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Jeffery Witman

Due to the high uncertainty regarding a Free to Play business models the Company expects the development team to need to tweak the monetization mechanisms of the game in the months following launch. Paid User Acquisition will gradually be tested and introduced in tandem with the monitoring and tweaking of the game’s monetization KPIs.

This is what happens when you run a game studio from the accounting office. RIP TSW.

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Megalus Doomslayer

To paraphrase Funcom: You know how we told you up until this point that this was going to be a financial cash cow? … Yeah, we lied out of our asses on that one… big time…

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Samuel Johnston

What they said was more like developing the game further was not really sustainable in its current form, and they hope that F2P will be profitable enough for them to continue developing it.

The above quote sounds more like they want to tweak monetization once it’s live, because you can’t always guess perfectly what the best services, items and price points are, until it’s available to consumers and you gather some data and feedback. Being open to adjustments in that regard just seems like good business sense.

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Koshelkin

Good thing I waited before I took the vacation from work for 26th June but I had the feeling it gets delayed anyway.

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Nathan Aldana

am I the only one who’s eyes glazed over at the sheer amount of code words and jargon about monetization theyre adding to secret world as though that was the most important thing to have ready for launch

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thickenergy

Well, it is essentially the only reason they are relaunching it. Have to make sure they have a smooth pipeline set up for receiving all that sweet lockbox cash.

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life_isnt_just_dank_memes

when exiles launched i was stoked for them because i thought they turned it around. the last few months the way they’ve handled the tsw rebranding and the conan stuff has been awful and i totally see why they have been in bad financial shape in the past. they don’t seem to know how to do long term properly.

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Rottenrotny

annnnnnnd it’s all down hill from there.
Sure they got a bump from the early Conan Exiles Sales, but me and everyone I know stopped playing that game and there’s not much hype about it anymore.
What else do they have? A TSW reboot? Don’t see much profit going to happen there.

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Katriana

The Company expects the majority of players after launch to be newcomers to the game, but is also working to make it worthwhile for as many veterans of The Secret World as possible to continue playing Secret World Legends.

*dons cynical hat* I guess this bit is to make it clear that appealing to their existing player base is of secondary importance to them? Why bother trying to retain old players when there’s a bit of a chance you might draw in new ones… *sigh* Trying to stay positive about this, but the more I hear the more apprehensive I am about the whole thing.

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Natalyia

It’s hard to see in black-and-white, but if the existing player base could have supported TSW, we wouldn’t be here. I suspect too large a percentage of people who still play TSW are grandmasters, and thus weren’t paying for content – and thus content didn’t make them any money. I’m not thrilled with how Funcom has managed this whole thing, but I do hope they can pull it off, because I’d like to see more of the story.

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Katriana

It’s true enough about most current players likely being GMs (I am), so I’m not arguing the point that they likely aren’t making enough money on it in the current form. My worry is primarily that this gamble will bomb on them and the whole thing will go kaput. It just seems that they could put a little effort into hedging their bets a bit by doing more to appease and retain current players in the new game. Players who might start spending a bit on it, depending on what they end up doing to monetize it. Otherwise the whole thing is dependent entirely upon attracting (and retaining) new players, including all the ones that have been saying “I’d play it if [this thing] was different about it.” As it is, I worry that they’ll get a bit initial rush of people coming to check out the new shiny thing….but then those people will go away after curiosity has been satisfied and we’ll be left where we currently are at. Only worse, since there’s no other fallback position for them once they make this move.

Anyway, as I said, I’m trying not to be negative, because I do want to see it succeed, and I do understand their reasons for going this route and can’t say I entirely blame them for making the choices they have. I do hope it turns out well…and I hope they aren’t burning their bridges too badly in the process.

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kidwithknife

I suspect you guys (and a fair number of others) are reading a bit much into a brief statement made to shareholders. It’s a couple throwaway sentences in a document that has little to do with the nuts and bolts of game development. It doesn’t necessarily mean a whole lot.

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BalsBigBrother

So if I am to understand this players who are aware Legends will be able to play it on the 26th by downloading directly from Funcon I assume? Then when it launches a month later on steam as a “new game” it will already have a group of folks who have played it a month, didn’t enjoy it and are ready to trash review it as soon as it appears.

I am sure the new folks that Funcom are hoping to attract will sure appreciate that.

Also had a small chuckle at ” Due to the high uncertainty regarding a Free to Play business models” bit, kind of ironic when we still don’t know what the Free to Play model even entails at this point in time.

Wish I wasn’t so cynical when I am tired /sigh

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Malorey Malone

Steam releases a ton of crap games every day…what difference would a couple more MMOs make!

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Samuel Johnston

By pushing the Steam release to a less busy time, they’ll probably get more front-page advertising, which makes a huge (like hundreds of %) difference as to how well new releases sell on Steam. It’s very similar to mobile app stores.

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Bryan Turner

Go Funcom!

pepperzine
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pepperzine

And their stock is still lower than it was their last quarterly announcement (is 34 cents now, was around 56 cents then)

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Denice J. Cook

I’d imagine that part of their net profit amount nowadays comes from having had to restructure multiple times over the years to reduce studio costs, besides the fact that they’re making much more scaled-down games now development-wise. The manpower and back end costs required to keep Anarchy Online, Age of Conan and TSW all going in their earliest years must have been huge in comparison.

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RJB

imo the outcome won’t change wether they launch now or after since they aren’t an mmo ppl who will be playing SB won’t be changing off of SB or ESO for sometime at least 3 months from launch so delaying it a month after isn’t helping much at all really imo. MMO players are also going to be playing Destiny 2 beta which is between June and August for beta

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Paragon Lost

I can understand why, little effort/cost (since they’re simply mostly porting over existing material ) put into what they’re doing ends up potentially having an result of “most profitable quarter ever”.

Personally I think they’ve got to be one of the worst run mmo game developers ever. They’ve apparently struggled for years and years even when having good money coming in at various times in the past.

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silverlock

They are still running which puts them way out out in front of most mmo companies really.

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Paragon Lost

A vivable comment Silverlock but with and major added addon to it. The reason they’re still running is due to repeated cash infusions from outside sources. Seriously, this company has always been run badly. That they are still around is indeed amazing.

I think that Jeffery Witman’s comment about being gobbled up by bigger fish with the other mmo developers is spot on as to why most of those other ones aren’t around. Funcom at least was able to resist that, though a big part of me thinks that they shouldn’t have resisted it.

A better management structure might have helped them big time in the long run.

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Jeffery Witman

Most were gobbled up by bigger fish. How many actually failed and closed down after having big name releases for years and years? They’ve had major success in games as art over the years, and even moderate financial success, but something fishy has kept them from actually doing well, it seems.

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kidwithknife

That’s odd, I thought the game was going to be Steam-only at release. Am I misremembering?

ceder
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ceder

Nope, not misremembering. To me the shift reflects how much they lack confidence on it and want to punt to consoles first to maximize better profit reception (since pc reviews can be more consolidated and brutal if they deliver something inferior(which is exactly what they’re delivering).

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Nordavind

Beta was/is Steam only IIRC.

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Ryan

Nope the beta is their own client/not on steam. I was also under the impression at release it would be steam only to start with.

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Bryan Correll

It was going to be Steam only initially per their FAQ at announcement.

Do I need Steam to play?
At launch Secret World Legends will only be available from Steam. We plan on adding a non-Steam version of Secret World Legends soon after the launch.

Funcom reboots The Secret World as Secret World Legends, a ‘shared-world action RPG’

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Tobasco da Gama

I wouldn’t get my hopes up about that “developing and supporting” line without specific details.

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Jeff

It would of been lost in the shuffle against those other titles. Especially popular IPs like Final Fantasy and Elder Scrolls.

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Jeffery Witman

FF and ESO players aren’t going to be jumping for SWL anyway.

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Greaterdivinity

Boooo, but ok. More time working on the game will also benefit it, so I’m alright with this.

More time to finish up my projects in GW2/ESO and a few other games before I sideline everything for SWL.

Now gimme some news on that other Conan game. WTB a proper story driven RPG filled with all kinds of raping, murdering, pillaging, and conquering that Conan is known for.

If nothing else, it continues to be nice to see Funcom finally on far more stable financial ground.

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zoward

I guess I’m glad they’re more financially stable than before, but … after hearing about TSW and AoC going on life support, I feel like a lot of the reasons I was rooting for Funcom to succeed in the first place are evaporating.

Mukit
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Mukit

TSW isn’t going on life support, ‘Anarchy Online and Age of Conan’ are. TSW gets a new face/form/whatever as SWL.

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Bryan Correll

They’ve said that they plan to keep TSW running.

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Nathan Aldana

which means all of nothing if they have no plans to ever add anything new to it.

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thickenergy

It will be Hyborian Legends: Secret Exiles.

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