You asked where the specific "as per August 14" date comes from. The presentation is a shortened, less technical version of the financial report.
The Q2 report states that there are currently 415,000 subscribers. People are inferring (incorrectly) that currently relates to the time of the financial data (June 30th). This is entirely incorrect. Plenty of company financial reports discuss the current state of the corporation from the time of publishing and not from the financial time stamp.
But more importantly, the idea that corporate directors "do not have to tell the truth in a powerpoint presentation to investors" or that Funcom is "not responsible" for what is in its financial presentations is patently false. The corporate veil is not that thick.
You asked where the specific "as per August 14" date comes from. The presentation is a shortened, less technical version of the financial report.
The Q2 report states that there are currently 415,000 subscribers. People are inferring (incorrectly) that currently relates to the time of the financial data (June 30th). This is entirely incorrect. Plenty of company financial reports discuss the current state of the corporation from the time of publishing and not from the financial time stamp.
But more importantly, the idea that corporate directors "do not have to tell the truth in a powerpoint presentation to investors" or that Funcom is "not responsible" for what is in its financial presentations is patently false. The corporate veil is not that thick.
so where did the powerpoint get the phrase " as per 15 aug " they could only gather this information from an audit like the one on june 30th.
your assuming just because the report was released on august 14th that the subscribers were as per that date.
so why would a company publish figures for 30th june 2008 and then add a figure in for 14th august and not clearly present it as so?
you have still not shown me on the offcial document where it stats subscribers are as per 14 aug?
To the original Poster: nice analysis. A few assumptions, but overall well presented and thought out.
I personaly think that Funcom is overestimating their revenue in Q3 and are being overly positive. I think Warhammer will hit them harder than they anticipate and i would guess that Funcom will fall short of their revenue target.
If they have more than 100k subscribers at the end of September i'd be surprised.
If the numbers are from June 30 then Funcom is experiencing almost zero subscription attrition
Huh? Once again you make no logical sense... I'm sorry but either business is not logical or sleep deprivation finally got to me
If the numbers are from August 14 then they have almost zero subscription attrition, not June 30th...
Let's pretend your right, this would mean this...
May 20 - Launch
May 26 - 400k Players
June 30 - 700k Account created (includes those who quit)
June 30 - 415k Subscribers (Q2 Report - debatable)
August 14 - 415k Subscribers??? (No drop whatsoever, huh?)
Sorry but you make no sense, 415k subscribers June 30th is the only logical conclusion based on all this. August 14 is an obvious lie and doesn't make any logical sense.
which means that only 115 000 people of the first 400 000 stayed past the free month!!!
This post is pretty much spot on. Those numbers are clearly from June 30th and not August 14th and nothing in the entire document suggests they are from August 14th. My guess is the August 14th numbers are more like 200k or so.
and yet dear Mr. OP you post this posts anyways... What really is interesting is the Blizzard'hs chairman was out saying that yes, we do see people leaving to try out AoC, 40% of them returns to us. That actually means that 60% doesnt return but stay in AoC. Thats a lot. Funcom must have done something right in that game.
Not at all. Just because 40% of the playerbase return to WoW doesn't mean the other 60% percent will stay with AoC. Quite of few of them migrated to EQ2, LoTRo, or simply quitting mmo all together.
your assuming just because the report was released on august 14th that the subscribers were as per that date. so why would a company publish figures for 30th june 2008 and then add a figure in for 14th august and not clearly present it as so? you have still not shown me on the offcial document where it stats subscribers are as per 14 aug? every thing so far is an assumption. so where did the powerpoint get the phrase " as per 15 aug " they could only gather this information from an audit like the one on june 30th.
Sentence 1: No, I am not assuming that. It is a cumulative impression made by a number of factors:
d) Funcom's Q3 revenue forecasts mimic the type of attrition I've seen on the forums and on the servers. The numbers add up for August 14 and not for June 30.
d) 415,000 subscriptions as of June 30th means they had ~300,000 people cancel after their first month, given a pool of ~700,000 subscriptions (100,000 were still within their first month). This is way too high of a number and I didn't know very many people who cancelled at that time. Our guild retention was amazing at that point. It was only in early July that people in my guild started cancelling. From experience I have an empirical notion that 2/5 of the people playing in mid-June did not unsubscribe from June 17th-June 30th.
Realize that Funcom has shred 400,000 subscribers in the last 6 weeks. That is a MASS exodus. Also realize mitigating factors.
i) They are including buddy key subscriptions
ii) Anyone who cancelled and has their subscription running out between August 15 - August 30 is still considered a subscriber (a HELL of a lot of people, probably another 100,000).
iii) A surprising amount of people are lazy about cancelling. They don't play but let their subscription run. Do not forget about 3 month and 6 month subscriptions.
I hope you realize I'm not a fanboi. I'm predicting Funcom's financial doom. Moreover, I have a financial stake in Funcom tanking.
and yet dear Mr. OP you post this posts anyways... What really is interesting is the Blizzard'hs chairman was out saying that yes, we do see people leaving to try out AoC, 40% of them returns to us. That actually means that 60% doesnt return but stay in AoC. Thats a lot. Funcom must have done something right in that game.
Not at all. Just because 40% of the playerbase return to WoW doesn't mean the other 60% percent will stay with AoC. Quite of few of them migrated to EQ2, LoTRo, or simply quitting mmo all together.
Don't fret with his logic, he probably also thinks that if he eats 5,000 calories a day that 100% of them automatically get burnt into pure energy, that none of it migrates into fat or waste. Also though, don't forget Vanguard, lots of people from AoC are coming back there as well. But most of it all is temporary moves until WAR comes out.
If the numbers are from June 30 then Funcom is experiencing almost zero subscription attrition
Huh? Once again you make no logical sense... I'm sorry but either business is not logical or sleep deprivation finally got to me
If the numbers are from August 14 then they have almost zero subscription attrition, not June 30th...
Let's pretend your right, this would mean this...
May 20 - Launch
May 26 - 400k Players
June 30 - 700k Account created (includes those who quit)
June 30 - 415k Subscribers (Q2 Report - debatable)
August 14 - 415k Subscribers??? (No drop whatsoever, huh?)
Sorry but you make no sense, 415k subscribers June 30th is the only logical conclusion based on all this. August 14 is an obvious lie and doesn't make any logical sense.
which means that only 115 000 people of the first 400 000 stayed past the free month!!!
I don't understand what you are trying to say or why you think it does not make sense. I want you to listen:
Funcom is forecasting revenue of 16-20 million in Q3. If Funcom had only 415k subscriptions as of June 30th, then there is absolutely no way they will hit those revenue targets without having essentially 415k subscriptions as of late September. GIVEN that the Age of Conan population is shrinking like crazy, there is absolutely no way AoC was working from a base of 415k June 30. Therefore, the date, as qualified in the financial powerpoint presentation, is likely the accurate figure. See post above for additional details that qualitatively provide evidence for August 14.
If June 30 IS the date, Funcom will miss its revenue targets by such a large margin that Funcom will go boom. Literally. And companies are not that suicidal...sorry. Common sense combined with evidence wins out today.
That report probably is accurate through August or July, because the section where is tells us there are 415K subscribers is a comment section only. They can include anything they want in there. The numbers don't have to add up like on the balance part.
That report probably is accurate through August or July, because the section where is tells us there are 415K subscribers is a comment section only. They can include anything they want in there. The numbers don't have to add up like on the balance part.
Exactly. I think people don't realize how bad a game has to implode to drop to 400k subscriptions from 800k in 6 weeks. I think people also forget that a majority of people really liked AoC up until around mid-early July.
Prognosis: 1. If Funcom misses its revenue target by 1 million dollars (15 million USD) a) June 30th @ 415,000 subscriptions = September 30 subscriptions of ~225,000 b) August 14th @ 415,000 subscriptions = September 30 subscriptions of 75,000-175,000 2. If Funcom misses its revenue target by 2 million dollars (14 million USD) a) June 30th @ 415,000 subscriptions = September 30 subscriptions of ~150,000 b) August 14th @ 415,000 subscriptions = September 30 subscriptions of 20,000-100,000
That makes absolutly no sense
"a" should be lower than "b"
No the revenue is the area under the curve. So if you look at A & B from the perspective of June 30 the assumption in B is that the sub count in June 30 is higher then 415k. So the whole curve is higher. So in order to make the $ projection that funcom is projecting for q3 then the slope of the decrease must be steeper in option B of the revenue would be higher then funcom is expecting.
I am totally impressed by your math skills. (revenue is area under the curve). But if someone can't grasp the theory of what you said initially.. explaining it to them in college level economic graphing won't work either.
I thought my " If I say I'm going to make 10 dollars in 3 months" analogy would work though
Prognosis: 1. If Funcom misses its revenue target by 1 million dollars (15 million USD) a) June 30th @ 415,000 subscriptions = September 30 subscriptions of ~225,000 b) August 14th @ 415,000 subscriptions = September 30 subscriptions of 75,000-175,000 2. If Funcom misses its revenue target by 2 million dollars (14 million USD) a) June 30th @ 415,000 subscriptions = September 30 subscriptions of ~150,000 b) August 14th @ 415,000 subscriptions = September 30 subscriptions of 20,000-100,000
That makes absolutly no sense
"a" should be lower than "b"
No the revenue is the area under the curve. So if you look at A & B from the perspective of June 30 the assumption in B is that the sub count in June 30 is higher then 415k. So the whole curve is higher. So in order to make the $ projection that funcom is projecting for q3 then the slope of the decrease must be steeper in option B of the revenue would be higher then funcom is expecting.
To the OP great analysis!
Ya, it is a sad state of affairs when a new game is bleeding (at least in the month of July) approximately 10,000 subscribers a day.
I won't blame you guys if you don't give this comment/opinion any credence, this is the internet after all:
My wife is a senior auditor & chartered accountant for one of the "big four" accounting firms in the world. At the risk of her laughing at me for caring so much I asked her if she could look at the report and tell me if the number quoted was for the end of the term or at the time of the report. Her reply:
In Q2 report it is always as of the Q2 date (as is with any financial report), not the report date unless it is in the context of discussing FORECASTED information but as this appears to be a statement where it is not a forecasted but actual.
If attached to a financial report (eg statements), the management discussion & analysis, when discussing metrics associated with revenues, etc always uses #s as of the financial statement date, otherwise investors would be comparing apples and oranges.
Think about it this way, it takes MINIMUM a week to know after a quarter end to know how may subscribers there are. You have to compile data, and there is always a lag between retail purchase and initial registration. Funcom probably does not have details on retail copies sold…
I do admit that this is the sketchiest MD&A I have ever seen, it is hard to see when they are discussing past, present and future.
http://uk.finance.yahoo.com/q/bc?s=FUNCOM.OL&t=5d&l=on&z=m&q=l&c this was posted on another thread it shows funcoms stock drops . the facts speak for themselves . i gather from what people have been saying funcom are losing about 5 million dollars a month if that is the case its hard to see how long they can keep going and i wonder what the future for age of conan holds if funcom do go under . i would like to think for all those that brought it and are enjoying it that some other company might take it over but i would nt bet on it espeacially with all the competition coming out later this year .
http://uk.finance.yahoo.com/q/bc?s=FUNCOM.OL&t=5d&l=on&z=m&q=l&c this was posted on another thread it shows funcoms stock drops . the facts speak for themselves . i gather from what people have been saying funcom are losing about 5 million dollars a month if that is the case its hard to see how long they can keep going and i wonder what the future for age of conan holds if funcom do go under . i would like to think for all those that brought it and are enjoying it that some other company might take it over but i would nt bet on it espeacially with all the competition coming out later this year . it ll be interesing to see what happens .
Funcom is losing about ~2 million a month, not 5 million. A lot of those expenses are one-time massive advertising expenses as well.
Funcom also has 36 million dollars in cash. Look for Funcom to pull in the reigns on AoC expenses the next 6 weeks to reduce their losses and attempt to break even this quarter (won't happen, but it will be suprisingly close...EBIT of ~2 million)
I won't blame you guys if you don't give this comment/opinion any credence, this is the internet after all: My wife is a senior auditor & chartered accountant for one of the "big four" accounting firms in the world. At the risk of her laughing at me for caring so much I asked her if she could look at the report and tell me if the number quoted was for the end of the term or at the time of the report. Her reply: In Q2 report it is always as of the Q2 date (as is with any financial report), not the report date unless it is in the context of discussing FORECASTED information but as this appears to be a statement where it is not a forecasted but actual. If attached to a financial report (eg statements), the management discussion & analysis, when discussing metrics associated with revenues, etc always uses #s as of the financial statement date, otherwise investors would be comparing apples and oranges. Think about it this way, it takes MINIMUM a week to know after a quarter end to know how may subscribers there are. You have to compile data, and there is always a lag between retail purchase and initial registration. Funcom probably does not have details on retail copies sold… I do admit that this is the sketchiest MD&A I have ever seen, it is hard to see when they are discussing past, present and future. I love that woman.
"I do admit that this is the sketchiest MD&A I have ever seen, it is hard to see when they are discussing past, present and future."
yes but out of the 415k subs, how many canceled only to have funcom sneak in another sub under the radar? just because a few people noticed them do this doesnt mean it ended with just the people who noticed. im sure there are thousands they decided to double charge. they are fully aware people could charge back but that would take a couple of months to go through. dont matter though cause the investors are not buying that financial report either. take a look at their stocks...dropped down to $16.30 a share today after that report was released. investors know bullshit when they see it too and the fact funcom is basically calling the people who financed them a bunch of idiots (like us players).
yes but out of the 415k subs, how many canceled only to have funcom sneak in another sub under the radar? just because a few people noticed them do this doesnt mean it ended with just the people who noticed. im sure there are thousands they decided to double charge. they are fully aware people could charge back but that would take a couple of months to go through. dont matter though cause the investors are not buying that financial report either. take a look at their stocks...dropped down to $16.30 a share today after that report was released. investors know bullshit when they see it too and the fact funcom is basically calling the people who financed them a bunch of idiots (like us players).
I realize people were a bit surprised to see 415,000 customers listed in the Q2 report and presentation.
But now that the dust has settled, if you factor in buddy keys, current box sales (those who have not yet had their CC billed), double billing, those who have cancelled but are still considered customers (which would be a majority of cancellations from July 15th on) and the fact that AoC was doing well in June, you realize the absolute catastrophic state of the game.
Quite literally there is a 3-4 week window where AoC has lost anywhere from 200,000-300,000 customers. We are talking 10,000 people cancelling a day.
I think people didn't (myself included) factor in properly that it had sold 800,000 units. It will take more than 3 months for the game to completely implode. Like...6 months.
. That being said, Funcom is obviously not expecting to retain 415,000 subscribers. Its revenue target simply has to be predicated on 415,000 subscribers as of August 14. Otherwise Funcom is going to get massacred in November. Lit
Negative. AoC is not Funcom's only revenue stream and it's becoming continually less of a factor. Most of the big expenditures involving AoC have already been accounted for. Even if [i]everyone[/i] quits AoC Funcom won't get massacred.
Funcom has no other substantial revenue source other than AoC to support 300 employees. Factoring in reductions in advertising and AoC promotion Funcom still requires 13-15 million a quarter in revenue to break even.
If Funcom reigns in its other projects to cut costs, it will hurt its future revenue growth. This is the litmus by which investors base their investments in small companies such as this.
Funcom requires AoC to be successful to maintain its future plans and potential growth.
Lit
Demonstarbly untrue. If Funcom had no other revenue streams they couldn't have made AoC in the first place. The company would have ceased to exist long ago.
I said substantial. Learn to read. Eitherway, your "demonstarbly" (lol) eloquent rebuttal is false. Funcom built AoC from debt and not from existing equity. And private/public equity offerings right now would absolutely kill Funcom right now. They are bleeding cash.
Jesus Christ...who are you people? Just because you play MMORPG's and are a nerd does not make you smart. Stop pretending to be financial analysts...especially when you can't delineate revenue from incurred debt.
. That being said, Funcom is obviously not expecting to retain 415,000 subscribers. Its revenue target simply has to be predicated on 415,000 subscribers as of August 14. Otherwise Funcom is going to get massacred in November. Lit
Negative. AoC is not Funcom's only revenue stream and it's becoming continually less of a factor. Most of the big expenditures involving AoC have already been accounted for. Even if [i]everyone[/i] quits AoC Funcom won't get massacred.
Funcom has no other substantial revenue source other than AoC to support 300 employees. Factoring in reductions in advertising and AoC promotion Funcom still requires 13-15 million a quarter in revenue to break even.
If Funcom reigns in its other projects to cut costs, it will hurt its future revenue growth. This is the litmus by which investors base their investments in small companies such as this.
Funcom requires AoC to be successful to maintain its future plans and potential growth.
Lit
Demonstarbly untrue. If Funcom had no other revenue streams they couldn't have made AoC in the first place. The company would have ceased to exist long ago.
I said substantial. Learn to read. Eitherway, your "demonstarbly" (lol) eloquent rebuttal is false. Funcom built AoC from debt and not from existing equity. And private/public equity offerings right now would absolutely kill Funcom right now. They are bleeding cash.
Jesus Christ...who are you people? Just because you play MMORPG's and are a nerd does not make you smart. Stop pretending to be financial analysts...especially when you can't delineate revenue from incurred debt.
Lit
Pompous arrogance at its finest, well done.
"Censorship is never over for those who have experienced it. It is a brand on the imagination that affects the individual who has suffered it, forever." - Noam Chomsky
I realize people were a bit surprised to see 415,000 customers listed in the Q2 report and presentation. But now that the dust has settled, if you factor in buddy keys, current box sales (those who have not yet had their CC billed), double billing, those who have cancelled but are still considered customers (which would be a majority of cancellations from July 15th on) and the fact that AoC was doing well in June, you realize the absolute catastrophic state of the game. Quite literally there is a 3-4 week window where AoC has lost anywhere from 200,000-300,000 customers. We are talking 10,000 people cancelling a day. I think people didn't (myself included) factor in properly that it had sold 800,000 units. It will take more than 3 months for the game to completely implode. Like...6 months. Lit
For what it's worth I also think the number was polled in August. They probably lost a crapload of their subscribers when the PvP update was officially announced delayed in late July. Those subscriptions can still be counted today though since they were paid.
I appreciate your break down and hope you keep us informed on the status of the stock.
and yet dear Mr. OP you post this posts anyways... What really is interesting is the Blizzard'hs chairman was out saying that yes, we do see people leaving to try out AoC, 40% of them returns to us. That actually means that 60% doesnt return but stay in AoC. Thats a lot. Funcom must have done something right in that game.
To say that the 60% that doesn't return to WoW stays in AoC is a bad assumption on your part. You don't know if those people were so tired of WoW and then disappointed with AoC that they went off to VG, CoX, LotRO, picked up a WAR beta or simply stopped playing. All you do know is that the 40% returned to WoW.
I said substantial. Learn to read. Eitherway, your "demonstarbly" (lol) eloquent rebuttal is false. Funcom built AoC from debt and not from existing equity. And private/public equity offerings right now would absolutely kill Funcom right now. They are bleeding cash. Jesus Christ...who are you people? Just because you play MMORPG's and are a nerd does not make you smart. Stop pretending to be financial analysts...especially when you can't delineate revenue from incurred debt. Lit
Pompous arrogance at its finest, well done.
Fair enough. I'm not used to people disagreeing with me. And when people do I tend to get angry and lose my conciliatory attitude.
Comments
http://www.funcom.com/funcom/frontend/files/CONTENT/Funcom_Q208_presentation.pdf
Lit
hahaha thats a presentation it has in not been aproved by any one its about as legal as a hotdog, its not a financial report.
thought you had read many or were they all powerpoint presentations?
http://www.funcom.com/funcom/frontend/files/CONTENT/Funcom_Q208_report.pdf
link the correct document in future
You asked where the specific "as per August 14" date comes from. The presentation is a shortened, less technical version of the financial report.
The Q2 report states that there are currently 415,000 subscribers. People are inferring (incorrectly) that currently relates to the time of the financial data (June 30th). This is entirely incorrect. Plenty of company financial reports discuss the current state of the corporation from the time of publishing and not from the financial time stamp.
But more importantly, the idea that corporate directors "do not have to tell the truth in a powerpoint presentation to investors" or that Funcom is "not responsible" for what is in its financial presentations is patently false. The corporate veil is not that thick.
Lit
http://www.funcom.com/funcom/frontend/files/CONTENT/Funcom_Q208_presentation.pdf
Lit
hahaha thats a presentation it has in not been aproved by any one its about as legal as a hotdog, its not a financial report.
thought you had read many or were they all powerpoint presentations?
http://www.funcom.com/funcom/frontend/files/CONTENT/Funcom_Q208_report.pdf
link the correct document in future
You asked where the specific "as per August 14" date comes from. The presentation is a shortened, less technical version of the financial report.
The Q2 report states that there are currently 415,000 subscribers. People are inferring (incorrectly) that currently relates to the time of the financial data (June 30th). This is entirely incorrect. Plenty of company financial reports discuss the current state of the corporation from the time of publishing and not from the financial time stamp.
But more importantly, the idea that corporate directors "do not have to tell the truth in a powerpoint presentation to investors" or that Funcom is "not responsible" for what is in its financial presentations is patently false. The corporate veil is not that thick.
so where did the powerpoint get the phrase " as per 15 aug " they could only gather this information from an audit like the one on june 30th.
your assuming just because the report was released on august 14th that the subscribers were as per that date.
so why would a company publish figures for 30th june 2008 and then add a figure in for 14th august and not clearly present it as so?
you have still not shown me on the offcial document where it stats subscribers are as per 14 aug?
every thing so far is an assumption.
To the original Poster: nice analysis. A few assumptions, but overall well presented and thought out.
I personaly think that Funcom is overestimating their revenue in Q3 and are being overly positive. I think Warhammer will hit them harder than they anticipate and i would guess that Funcom will fall short of their revenue target.
If they have more than 100k subscribers at the end of September i'd be surprised.
Huh? Once again you make no logical sense... I'm sorry but either business is not logical or sleep deprivation finally got to me
If the numbers are from August 14 then they have almost zero subscription attrition, not June 30th...
Let's pretend your right, this would mean this...
May 20 - Launch
May 26 - 400k Players
June 30 - 700k Account created (includes those who quit)
June 30 - 415k Subscribers (Q2 Report - debatable)
August 14 - 415k Subscribers??? (No drop whatsoever, huh?)
Sorry but you make no sense, 415k subscribers June 30th is the only logical conclusion based on all this. August 14 is an obvious lie and doesn't make any logical sense.
Edit: Hahaha, just noticed!
700k Accounts - 415k sub = 285k 400k - 285k = 115k
which means that only 115 000 people of the first 400 000 stayed past the free month!!!
This post is pretty much spot on. Those numbers are clearly from June 30th and not August 14th and nothing in the entire document suggests they are from August 14th. My guess is the August 14th numbers are more like 200k or so.
Not at all. Just because 40% of the playerbase return to WoW doesn't mean the other 60% percent will stay with AoC. Quite of few of them migrated to EQ2, LoTRo, or simply quitting mmo all together.
Sentence 1: No, I am not assuming that. It is a cumulative impression made by a number of factors:
a) The present tense used in the report
b) The explicit language of the presentation
c) A Norwegian financial newsite quoting the CEO as saying "Funcom currently has 415,000 subscribers." http://e24.no/boers-og-finans/article2595624.ece
d) Funcom's Q3 revenue forecasts mimic the type of attrition I've seen on the forums and on the servers. The numbers add up for August 14 and not for June 30.
d) 415,000 subscriptions as of June 30th means they had ~300,000 people cancel after their first month, given a pool of ~700,000 subscriptions (100,000 were still within their first month). This is way too high of a number and I didn't know very many people who cancelled at that time. Our guild retention was amazing at that point. It was only in early July that people in my guild started cancelling. From experience I have an empirical notion that 2/5 of the people playing in mid-June did not unsubscribe from June 17th-June 30th.
Realize that Funcom has shred 400,000 subscribers in the last 6 weeks. That is a MASS exodus. Also realize mitigating factors.
i) They are including buddy key subscriptions
ii) Anyone who cancelled and has their subscription running out between August 15 - August 30 is still considered a subscriber (a HELL of a lot of people, probably another 100,000).
iii) A surprising amount of people are lazy about cancelling. They don't play but let their subscription run. Do not forget about 3 month and 6 month subscriptions.
I hope you realize I'm not a fanboi. I'm predicting Funcom's financial doom. Moreover, I have a financial stake in Funcom tanking.
Hope this clears it up,
Lit
Not at all. Just because 40% of the playerbase return to WoW doesn't mean the other 60% percent will stay with AoC. Quite of few of them migrated to EQ2, LoTRo, or simply quitting mmo all together.
Don't fret with his logic, he probably also thinks that if he eats 5,000 calories a day that 100% of them automatically get burnt into pure energy, that none of it migrates into fat or waste. Also though, don't forget Vanguard, lots of people from AoC are coming back there as well. But most of it all is temporary moves until WAR comes out.
Huh? Once again you make no logical sense... I'm sorry but either business is not logical or sleep deprivation finally got to me
If the numbers are from August 14 then they have almost zero subscription attrition, not June 30th...
Let's pretend your right, this would mean this...
May 20 - Launch
May 26 - 400k Players
June 30 - 700k Account created (includes those who quit)
June 30 - 415k Subscribers (Q2 Report - debatable)
August 14 - 415k Subscribers??? (No drop whatsoever, huh?)
Sorry but you make no sense, 415k subscribers June 30th is the only logical conclusion based on all this. August 14 is an obvious lie and doesn't make any logical sense.
Edit: Hahaha, just noticed!
700k Accounts - 415k sub = 285k 400k - 285k = 115k
which means that only 115 000 people of the first 400 000 stayed past the free month!!!
I don't understand what you are trying to say or why you think it does not make sense. I want you to listen:
Funcom is forecasting revenue of 16-20 million in Q3. If Funcom had only 415k subscriptions as of June 30th, then there is absolutely no way they will hit those revenue targets without having essentially 415k subscriptions as of late September. GIVEN that the Age of Conan population is shrinking like crazy, there is absolutely no way AoC was working from a base of 415k June 30. Therefore, the date, as qualified in the financial powerpoint presentation, is likely the accurate figure. See post above for additional details that qualitatively provide evidence for August 14.
If June 30 IS the date, Funcom will miss its revenue targets by such a large margin that Funcom will go boom. Literally. And companies are not that suicidal...sorry. Common sense combined with evidence wins out today.
Lit
That report probably is accurate through August or July, because the section where is tells us there are 415K subscribers is a comment section only. They can include anything they want in there. The numbers don't have to add up like on the balance part.
Exactly. I think people don't realize how bad a game has to implode to drop to 400k subscriptions from 800k in 6 weeks. I think people also forget that a majority of people really liked AoC up until around mid-early July.
That makes absolutly no sense
"a" should be lower than "b"
No the revenue is the area under the curve. So if you look at A & B from the perspective of June 30 the assumption in B is that the sub count in June 30 is higher then 415k. So the whole curve is higher. So in order to make the $ projection that funcom is projecting for q3 then the slope of the decrease must be steeper in option B of the revenue would be higher then funcom is expecting.
To the OP great analysis!
---
Ethion
Ethion,
I am totally impressed by your math skills. (revenue is area under the curve). But if someone can't grasp the theory of what you said initially.. explaining it to them in college level economic graphing won't work either.
I thought my " If I say I'm going to make 10 dollars in 3 months" analogy would work though
That makes absolutly no sense
"a" should be lower than "b"
No the revenue is the area under the curve. So if you look at A & B from the perspective of June 30 the assumption in B is that the sub count in June 30 is higher then 415k. So the whole curve is higher. So in order to make the $ projection that funcom is projecting for q3 then the slope of the decrease must be steeper in option B of the revenue would be higher then funcom is expecting.
To the OP great analysis!
Ya, it is a sad state of affairs when a new game is bleeding (at least in the month of July) approximately 10,000 subscribers a day.
Lit
I won't blame you guys if you don't give this comment/opinion any credence, this is the internet after all:
My wife is a senior auditor & chartered accountant for one of the "big four" accounting firms in the world. At the risk of her laughing at me for caring so much I asked her if she could look at the report and tell me if the number quoted was for the end of the term or at the time of the report. Her reply:
In Q2 report it is always as of the Q2 date (as is with any financial report), not the report date unless it is in the context of discussing FORECASTED information but as this appears to be a statement where it is not a forecasted but actual.
If attached to a financial report (eg statements), the management discussion & analysis, when discussing metrics associated with revenues, etc always uses #s as of the financial statement date, otherwise investors would be comparing apples and oranges.
Think about it this way, it takes MINIMUM a week to know after a quarter end to know how may subscribers there are. You have to compile data, and there is always a lag between retail purchase and initial registration. Funcom probably does not have details on retail copies sold…
I do admit that this is the sketchiest MD&A I have ever seen, it is hard to see when they are discussing past, present and future.
I love that woman.
It shows the market for mmo's is huge now, it also shows that if your product isn't good enough people won't continue to pay for it.
http://uk.finance.yahoo.com/q/bc?s=FUNCOM.OL&t=5d&l=on&z=m&q=l&c this was posted on another thread it shows funcoms stock drops . the facts speak for themselves . i gather from what people have been saying funcom are losing about 5 million dollars a month if that is the case its hard to see how long they can keep going and i wonder what the future for age of conan holds if funcom do go under . i would like to think for all those that brought it and are enjoying it that some other company might take it over but i would nt bet on it espeacially with all the competition coming out later this year .
it ll be interesing to see what happens .
Funcom is losing about ~2 million a month, not 5 million. A lot of those expenses are one-time massive advertising expenses as well.
Funcom also has 36 million dollars in cash. Look for Funcom to pull in the reigns on AoC expenses the next 6 weeks to reduce their losses and attempt to break even this quarter (won't happen, but it will be suprisingly close...EBIT of ~2 million)
Lit
"I do admit that this is the sketchiest MD&A I have ever seen, it is hard to see when they are discussing past, present and future."
Seriously, if you dump your wife, I'll marry her
Very lucid analysis there
yes but out of the 415k subs, how many canceled only to have funcom sneak in another sub under the radar? just because a few people noticed them do this doesnt mean it ended with just the people who noticed. im sure there are thousands they decided to double charge. they are fully aware people could charge back but that would take a couple of months to go through. dont matter though cause the investors are not buying that financial report either. take a look at their stocks...dropped down to $16.30 a share today after that report was released. investors know bullshit when they see it too and the fact funcom is basically calling the people who financed them a bunch of idiots (like us players).
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I realize people were a bit surprised to see 415,000 customers listed in the Q2 report and presentation.
But now that the dust has settled, if you factor in buddy keys, current box sales (those who have not yet had their CC billed), double billing, those who have cancelled but are still considered customers (which would be a majority of cancellations from July 15th on) and the fact that AoC was doing well in June, you realize the absolute catastrophic state of the game.
Quite literally there is a 3-4 week window where AoC has lost anywhere from 200,000-300,000 customers. We are talking 10,000 people cancelling a day.
I think people didn't (myself included) factor in properly that it had sold 800,000 units. It will take more than 3 months for the game to completely implode. Like...6 months.
Lit
Negative. AoC is not Funcom's only revenue stream and it's becoming continually less of a factor. Most of the big expenditures involving AoC have already been accounted for. Even if [i]everyone[/i] quits AoC Funcom won't get massacred.
Funcom has no other substantial revenue source other than AoC to support 300 employees. Factoring in reductions in advertising and AoC promotion Funcom still requires 13-15 million a quarter in revenue to break even.
If Funcom reigns in its other projects to cut costs, it will hurt its future revenue growth. This is the litmus by which investors base their investments in small companies such as this.
Funcom requires AoC to be successful to maintain its future plans and potential growth.
Lit
Demonstarbly untrue. If Funcom had no other revenue streams they couldn't have made AoC in the first place. The company would have ceased to exist long ago.
I said substantial. Learn to read. Eitherway, your "demonstarbly" (lol) eloquent rebuttal is false. Funcom built AoC from debt and not from existing equity. And private/public equity offerings right now would absolutely kill Funcom right now. They are bleeding cash.
Jesus Christ...who are you people? Just because you play MMORPG's and are a nerd does not make you smart. Stop pretending to be financial analysts...especially when you can't delineate revenue from incurred debt.
Lit
Negative. AoC is not Funcom's only revenue stream and it's becoming continually less of a factor. Most of the big expenditures involving AoC have already been accounted for. Even if [i]everyone[/i] quits AoC Funcom won't get massacred.
Funcom has no other substantial revenue source other than AoC to support 300 employees. Factoring in reductions in advertising and AoC promotion Funcom still requires 13-15 million a quarter in revenue to break even.
If Funcom reigns in its other projects to cut costs, it will hurt its future revenue growth. This is the litmus by which investors base their investments in small companies such as this.
Funcom requires AoC to be successful to maintain its future plans and potential growth.
Lit
Demonstarbly untrue. If Funcom had no other revenue streams they couldn't have made AoC in the first place. The company would have ceased to exist long ago.
I said substantial. Learn to read. Eitherway, your "demonstarbly" (lol) eloquent rebuttal is false. Funcom built AoC from debt and not from existing equity. And private/public equity offerings right now would absolutely kill Funcom right now. They are bleeding cash.
Jesus Christ...who are you people? Just because you play MMORPG's and are a nerd does not make you smart. Stop pretending to be financial analysts...especially when you can't delineate revenue from incurred debt.
Lit
Pompous arrogance at its finest, well done.
"Censorship is never over for those who have experienced it. It is a brand on the imagination that affects the individual who has suffered it, forever." - Noam Chomsky
For what it's worth I also think the number was polled in August. They probably lost a crapload of their subscribers when the PvP update was officially announced delayed in late July. Those subscriptions can still be counted today though since they were paid.
I appreciate your break down and hope you keep us informed on the status of the stock.
To say that the 60% that doesn't return to WoW stays in AoC is a bad assumption on your part. You don't know if those people were so tired of WoW and then disappointed with AoC that they went off to VG, CoX, LotRO, picked up a WAR beta or simply stopped playing. All you do know is that the 40% returned to WoW.
Edit: oops, others replied earlier ( ' :
Pompous arrogance at its finest, well done.
Fair enough. I'm not used to people disagreeing with me. And when people do I tend to get angry and lose my conciliatory attitude.