NCsoft Q4 2019: It was a rough quarter for MMORPGs, especially Guild Wars 2

The core ArenaNet MMORPG saw its worst quarter ever

    
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NCsoft Q4 2019: It was a rough quarter for MMORPGs, especially Guild Wars 2

NCsoft corporate had a solid financial quarter for the last three months of 2019, with increases in revenue quarter over quarter and year over year of 34%, thought the year in full was down 1% over 2018. Unfortunately, several of the company’s core MMORPGs suffered through the quarter with drops in revenue.

NCsoft’s mobile unit finished the year with a 59% revenue increase since fourth quarter of 2018. And Lineage I and Lineage II finished the year with a revenue increases YOY: 24% for the older game and 25% for the younger.

But the three key MMOs that mark NCsoft’s presence here in the west – Guild Wars 2, Aion, and Blade & Soul – were all down revenue-wise for the year. Aion dropped 36% YOY, B&S dropped 28%, while Guild Wars 2 lost almost a quarter of its revenue YOY after holding relatively flat all throughout 2019. In fact, this marks Guild Wars 2’s worst quarter to date, in spite of the start of a new season of content last fall.

The Guild Wars 2 subreddit is awash with speculation about meaningful content and the saga announcement and last year’s layoffs, but given the fact that Blizzard’s only success last quarter was World of Warcraft Classic and it doubled WoW’s active playerbase with that launch, we note it might be useful to look there to understand where western MMO players may have gone over the period.

We’ve included the key charts, just bear in mind that the bar graphics appear designed to obscure relative values.

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Dankey Kang

Needs another expansion really.

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Braheem Hazeem III

Stopped caring about GW2 a while ago, due to their lack of content. You get 2-3 hours once every 3-4 months. No new dungeons, just fractals, game was just boring. Moved onto eso and yes you have to pay for content but at least it’s more than 2-3 hours. Their last dlc took me almost 15 hours to beat the story and do map completion. I would gladly pay GW2 if they gave us content like that.

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7BitBrian

People really need to learn how to read these things and stop relying on click bait images. Guild Wars 2 is actually beating everything including mobile.(In the west)

People seem to forget that while GW2 is released just in eu/na all other games are released also in Korea, Taiwan and Japan. (technically GW2 is released also in China but due to how regulation works in China, NCSoft China cannot release games there directly but instead through a Chinese company. So that revenue is marked as royalties and not factored in with the rest of the revenue. We don’t know how much each game is individually making in China and if it would change these numbers significantly or not.)

Anyhow; Looking at these numbers, this quarter GW2 did 11.3 billion won while the entire na/eu revenue was 17.6 billion won. That means GW2 revenue accounted for 64% of all na/eu revenue this quarter, making it mathematically the most profitable franchise they have in the west.

This is how investors and shareholders will look at this. This IS their western market atm, and it’s something they want to keep putting money into to see it grow.

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Bruno Brito

Or…they’ll do what NCSoft been doing for a while now, and realize that the West is not an market they wanna pursue and focus on eastern mobile which brings ungodly ammounts of moolah for them.

I wonder, is GW2 beating mobile games like Candy Crush and Clash Royale? Or just NCSoft mobile games?

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7BitBrian

Just NCSoft Mobile, in the west. Beating all of mobile in the West isn’t even feasible. The Mobile market is the largest market in gaming atm and makes up over 50% of the total gaming market. The second highest is the Console market, which used to be even with the PC market but the PC market has actually shrunk some in the last 2 years. Which is also very surprising since from a consumer standpoint the PC market seems to be in a boom and growing. But numbers don’t lie.

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Bruno Brito

So, if GW2 is beating a already weak market in the West, that’s not booming. That’s stagnation. You’re having hopeful thoughts with a company that killed games for less.

It’s way easier that NCSoft just cut their losses and go back to pumping the eastern mobile market which is their main cashcow right now, together with Lineage 2.

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7BitBrian

There are no losses to cut. GW2 is not a loss leader atm but a steady RoI that is making money. You dont just drop something like that, even if it is only a small portion of your overall yearly income. That’s not how any of this works.

Not the biggest does not equal weak and a company isn’t going to just drop something like that. At least not atm. If this trend continues and they never bounce back then eventually(likely a few more years from now) they’d reach the same scenario as CoH and show a steady decline and the company would drop them just before or right as they started losing money from them.

But again we’re not even close to that yet with GW2, they are still making NCSoft a significant amount of income and are and positive RoI. And yes even a small % of the overall can be viewed as a large amount. Companies don’t just drop even 1% of their total income let alone how much GW2 is making.

Also the argument of dropping that % to focus on a different region is wrong. Markets have caps, there isn’t infinite growth. As shown by the introduction of newer titles in the east yet them not causing a significant bump in revenue in that region, but instead a spreading out of said revenue, you cant just expect it to make up for dropping the west. In fact the West is where they have the biggest potential for growth atm. While their eastern markets make them more income they are not as lucrative for growth and new income as the West currently is for NCSoft.

No investor after a call like this is going to ask for a pullout from the West. They will be asking hard questions on what NCSoft is doing to encourage growth in this ripe market they are so weak in. And why they continue to show stagnant growth in said market. And NCSoft now has at least one answer with the layoffs and restructuring and refocusing of an entire studio. This will not be enough alone of course. Expect to see NCSoft slowly pushing itself further into the western market over the next few years with acquisitions, new studios, projects, etc… any or all of those will likely be demanded by investors soon.

Mordyjuice
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Mordyjuice

I get it I really do, other than WoW I’ve spent most of my MMO time in GW2 and seeing what it’s gone through the past year is frustrating and heart breaking; I want to see this game right it self with it’s own version of a WoW Legion expansion because at one point GW2 was Lightning in a Bottle (if it were one of my Ex’s it would have been one of the great loves of my life).

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Bruno Brito

because at one point GW2 was Lightning in a Bottle

I think that point was after the manifesto and before the first people achieved level 80.

Mordyjuice
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Mordyjuice

I’d say it was the high points of Season One starting with the Marionette, the 2 Mega World Bosses, The Ancient Karka, the destruction of Lions Arch.

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Bruno Brito

Hoonestly? It feels like those were high points because by comparing, anything else was shit. Like i said, before that we didn’t have anything remotely like an endgame. It was CoF exploit-spam. Then came S1 LS. And Scarlet with it ( ugh ). I remember well people hating her.

The marionette was their strongest point that season, i concur.

If by mega world bosses we’re talking Tequatl, yeah, also decent. Took too long to be reworked tho.

I was in the ancient karka event. I literally left my engineer autoattacking with rifle and getting ressed by players while i watched videos because it was a shitshow. It was laggy, awful, boring, and the karka itself was an HP sponge with one roll oneshot attack.

The destruction of lion’s arch itself was ok, the event i mean. But no one liked the city going into flames, and i remember that those weren’t the only flames in the community. Reddit and the forums were pretty heated too.

Overall i find the S1 decent. But that is by GW2 standards. I still think that the game itself came with so many design flaws that they took a lot of my potential fun.

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Utakata

I hope NC releases the UE4 upgrade for B&S West before the next quarterly. I would hate to end up it being the only way to continue to play this game is I have speak fluent Korean. /bleh

miol
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miol

As always, for better comparison: (click to zoom)

-On the first one are the values stacked upon each other
-The second one is without the mobile numbers

1.jpg
2.jpg
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Axetwin .

This is funny (no, not really) because I saw someone yesterday on r/Guildwars2 try to argue that GW2 is still going super strong, and is currently making more money than it’s ever made since it released.

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Arktouros

Yep, as I keep saying players only got so much time to play games and most of those big MMOs are all so similar to each other they’re going to naturally pull customers from each other.

GW2’s problem is it has no pull anymore. They gave up on their Living world in favor of expansions. They gave up on their dungeon/fractal designs in favor of raiding. However it doesn’t seem like they understand what that shift in game design means. It means if you don’t drip feed out expansions on a regular basis, people think your game is dead. It means if you don’t release new PvE raid content for them to consume, people are going to think your game is dead. That’s the game audience you wanted. Now they got this half measures “Saga” that isn’t a living world but isn’t an expansion and “Strikes” which isn’t a dungeon nor is it a raid. Who is all that meant to appeal to? Not the audience they had, not the audience they got. There’s just no pull.

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Bruno Brito

Basically. The game is focused on seasonal content, and then your players log off. I don’t think that’s what Anet wanted.

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Danny Smith

I’m sure i’ve asked it already but when is the last time there was a positive outlook for GW2? Like i think people seemed happy when heart of thorns got announced but thats the closest i can think of. Looking at the reddit its like just when Wildstar was starting to nosedive and users were starting to see which way the winds blowing. Which would be a shame but man it looks like NCsoft is just kind of content to milk the gem store whales till the userbase collapses. Or the dev team.

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Axetwin .

Exactly. Anyone that’s been part of a community of a game that up and died can see the writing on the wall with GW2.

miol
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miol

I’m sure i’ve asked it already but when is the last time there was a positive outlook for GW2? Like i think people seemed happy when heart of thorns got announced but thats the closest i can think of.

The 2nd expansion Path of Fire was overall well received (even voted MOP’s best expansion 2017), and it was also financially worthwhile, as you can clearly see from the 2nd graph!

Most people already said, that they only should have just continued that way with expansions, and they would have been fine, instead of only betting on their secret projects to succeed…

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Greaterdivinity

Man, GW2’s rough year is sure showing, at least with the last quarter. That’s usually a stronger one, but this is particularly weak.

Really hope they can regain their footing to at least post-HoT levels. They’ve never recovered following that expansion and it seems that the ongoing issues are just making things worse.

Good luck, dudes.

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Utakata

“This game can’t seem to get a break.” – SoMuchMass >.<

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Bruno Brito

SoMuchMass

No. Please, no.

Mordyjuice
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Mordyjuice

What ever happened to that guy, did he drop dead of an aneurysm back when GW2 was Belle of the Ball of MMOs, I figured he’s be dancing with glee in these recent articles?

PS I think I may have upset you the other day in the Daily Grind, some times my humor really misses the mark and I apologize I meant no malice; unfortunately things we find funny at work in a hospital setting really disturbs people that are not in that field (guess seeing the things we see on a regular basis kind of changes you like a warzone).

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Bruno Brito

I actually don’t remember much of SMM. Maybe i blocked it like i blocked all my father’s beatings.

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Utakata

No problems. I get that a lot myself. Mr. Bruno was giving the weird silent treatment over on another post. I’m pretty sure my humor was taken the wrong way. But that’s the problem with comments, is that it’s devoid of emotional context that can really get lost in translation. But thanks for apologizing. /bows

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Utakata

Edit/Update: Although it appears that misunderstanding is cleared up between Mr. Bruno and myself. :)

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Bruno Brito

Really, it wasn’t the silent treatment haha, i just didn’t remember the gif and found the expression funny :p

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Sleepy

My current goal in GW2 is go complete enough maps to get enough keys to get enough black lion statuettes to exchange for a claim token to change my max-level character’s hair. End-game goal, folks!

There’s a whole heap of what’s wrong with GW2 right there.

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Arktouros

Wouldn’t it be more efficient to farm gold and exchange for gems and buy a coupon from the cash shop for gems?

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Bruno Brito

Map completion is way more fun. Farming in GW2 is brain-dead harmful. I felt pieces of my cranium melting when i tried. Almost fell asleep on the kb.

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Sleepy

The point is that this is the most exciting thing I find myself doing at the level cap. As Bruno says further up: ” The game is focused on seasonal content, and then your players log off.”

That’s not a good sign.

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Bruno Brito

I never understood how people praised GW2 for not demanding you to be continuously logged.

I mean, yeah, DEMANDING is a problem, i like games where if i’m busy, i can log for 30min and accomplish something.

But if your loyal playerbase doesn’t WANT to stay logged in your world, something is wrong with it.