Funcom: 89 page 2008 Annual Report

Comments

• bryan1980 Member Posts: 182

  April 2009

  Two comments

  1.  " the launch of Age of Conan has given proof that Funcom has the competency and capacity to launch complex, large scale MMO's to a world market. "   - seriously, can funcom say that with a straight face?

  2.  They brag about Blizzard/WOW a lot in there, don't they?  It seems like the biggest hope they are giving their shareholders is saying " look at how much money Blizzard is making".
• Euphoryk Member Posts: 450

  April 2009

  Thank you Avery, interesting read.
• Jackdog Member UncommonPosts: 6,321

  April 2009

  Funcom bragging that 1.2 million copies were shipped to retailers with it's current population is like a hamburger chain advertising 1 million bugers were sold and  950,000 were regurgitated before the customer left the building.

  I miss DAoC
• Unfinished Member Posts: 881

  May 2009

  "Funcom continues to invest in Age of Conan and expect the next 6-9 months to show whether they can once again enter a growth phase with the game."

  That is a less than optimistic. This certainly torpedos "the game is growing" spin folks try to sling around here.

   

  "Age of Conan has been amortized since it's launch"

  They did this by devaluing the game, and writting off it's development costs as a loss.

   

  "Funcom aims to emerge as a leading independent developer of F2P games."

  Easily done if Age of Conan goes F2P to survive.

   

  It would be very interesting to know how much of FC's "300" staff is Beijing programmers, and if they are actual full-time FC staff or a independent programming house that FC is subbing work to. From my experience doing bussiness their, my guess is it's the later.
• LitigatorAB Member Posts: 36

  May 2009

  A great read, although I learned a few new tidbits of information that I did not know before:

  Offline PC game revenue:  $390,000.  That is from the Dreamfall series.  So I anticipate that Dreamfall revenue, at best is at $100,000 per quarter.  Probably less than that now.

  Revenue sources:  Over half of Funcom's revenue comes from Europe.  That doesn't come across as good news for Age of Conan, because it is Europe in particular that seems to be suffering a population loss.  Perhaps that is being made up by an increase in players in North America, but traded one for one, a European subscription is worth more than a North American subscription.

  Population Stabilization:  If it was increasing even by a small margin they would say so.  So I take it the game is ever so slowly bleeding subscribers. 

  Anarchy Online:  Population levels are supposedly "satisfactory" which means it is worth it for them to keep it going...but that they are bleeding subscribers.

  So based on that I'm re-evaluating my Q1 numbers:

  Instead of $1,000,000 for AO a quarter I'm revising that down to $700,000.

  I'm adding $50,000 in income from Dreamfall. 

  That changes my May 15th prediction from 6.5 million US to 6.25 million US. 

  Lit
• BlackinBack Member Posts: 3

  May 2009

  Originally posted by LitigatorAB
  
  
  A great read, although I learned a few new tidbits of information that I did not know before:
  Offline PC game revenue:  $390,000.  That is from the Dreamfall series.  So I anticipate that Dreamfall revenue, at best is at $100,000 per quarter.  Probably less than that now.
  Revenue sources:  Over half of Funcom's revenue comes from Europe.  That doesn't come across as good news for Age of Conan, because it is Europe in particular that seems to be suffering a population loss.  Perhaps that is being made up by an increase in players in North America, but traded one for one, a European subscription is worth more than a North American subscription.
  Population Stabilization:  If it was increasing even by a small margin they would say so.  So I take it the game is ever so slowly bleeding subscribers. 
  Anarchy Online:  Population levels are supposedly "satisfactory" which means it is worth it for them to keep it going...but that they are bleeding subscribers.
  So based on that I'm re-evaluating my Q1 numbers:
  Instead of $1,000,000 for AO a quarter I'm revising that down to $700,000.
  I'm adding $50,000 in income from Dreamfall. 
  That changes my May 15th prediction from 6.5 million US to 6.25 million US. 
  Lit
  

  
  
   

  Isn't this pretty much the same obvious statements as in your thread about how you expect FC revenue to go down for Q1.

  Let me burst your bubble, FC guided revenue for Q1 down, hence it is very likely to go down (comparing Q12009 to Q42008).

  If you want to talk about something exciting and more relevant you prolly should talk about Q22009, this is what all investors will be looking at shortly. If Q22009 is not up relative to Q12008, that is a very bad sign. If it gets a solid 2M bump up that's a very good sign.
• WisebutCruel Member Posts: 1,089

  May 2009

  Originally posted by AmazingAvery
  
  
  PLEASE REMEMBER THIS IS FROM A BUSINESS PERSPECTIVE AND WILL BE AIMED FROM THAT FRONT TO SUCH A DEGREE, AS ANYONE RUNNING THEIR OWN BUSINESS WOULD WANT TO BE PUT ACROSS IN BEST LIGHT. 
  Link to 6.75mb direct PDF file: http://www.funcom.com/funcom/frontend/files/CONTENT/Funcom_2008_Annual_Report.pdf
  Highlights:
  
  Age of Conan pre-sold more than any original PC game launch in history, with 1.2 million copies of the game shipped to retailers.
  Shipped, not sold.
  Anarchy Online will celebrate its eight year anniversary in June 2009.
  A new Game Director for Anarchy Online was appointed, and his team spearheaded the development of the new booster pack, Legacy of Xan.
  Released buggy and with only half it's stated content.
  By the end of 2008 over 300 full-time employees were working with Funcom, located in offices in Switzerland, Norway, USA and China.
  Some operations were scaled back after the launch of Age of Conan, including Customer Service and Quality Assurance, while other teams saw growth, most notably in China.
  In 2008 Funcom started development of two Free-To-Play MMOs, with continued development on The Secret World and Anarchy Online.
  In addition to developing two F2P MMOs, Funcom has begun the research phase on a third.
  Funcom aims to emerge as a leading independent developer of F2P games.
  Considering their rapidly deteriorating reputation, relying on item malls will probably be more profitable than trying to get people to pay subscription fees.
  Funcom continues to invest in Age of Conan and expect the next 6-9 months to show whether they can once again enter a growth phase with the game.
  They had their "growth phase" and screwed it.
  Funcom's next large scale MMO, The Secret World, has started PR.
  Yes, more PR and hype which will promise much more than will be delivered.
  Free-To-Play MMOs in beta testing.
  We all know how effective Funcoms' testing is. This is again why a move to free to play makes sense for them. Customers can't bitch if they're not paying.
  Funcom continues to develop their DreamWorld Engine, and have about 30 programmers working on it.
  Yet, they chose the Ogre engine for TSW. Even Funcom knows their tired, worn out abortion of an in-house engine is worthless. Yet they are too stupid to just shelve it and leave engine development to a talented maker.
  In 2008 Funcom sold its interest in Plutolife, which concluded its involvement in the mobile gaming sector.
  Yes, so they could have some positive cash to report.
  In January and February 2009 the Group launched localized versions of Age of Conan in Poland and Russia with positive gamer and press reception.
  I bet there was negative gamer and press reception as well. But they forget to mention that.
  On February 23, 2009 Olav Sandnes gave notice of resignation as CFO. Mr. Sandnes left the company to take up a new position in a different industry.
  Yes, amazing how many people jumped ship to move to "different industries" after AoC bombed. Maybe Gaute and Sandes should join together and start a windshield washing business on a busy street corner.
  On March 5, 2009 options to acquire shares were granted to key personnel in Funcom.
  They needed someone to buy those stocks.
  
   
  Snippets:
   
  
  300,000 Warhammer customers at 3 months in the games life was not significantly lower than AoCs' customer base at their 3 month mark. AoC reported 450k customers ( from their initial 800k, almost half their playerbase gone after the first month ), which included people who were no longer playing but had subscriptions waiting to run out.
   
  
   Yep, a solid 20k players can be considered stable. A failure, but stable.
   
   
  
  "We promise we're going to make money someday! Honest!!"
   
   
  

  
  
   
• bryan1980 Member Posts: 182

  May 2009

  Originally posted by BlackinBack
  
  Originally posted by LitigatorAB
  
  
  A great read, although I learned a few new tidbits of information that I did not know before:
  Offline PC game revenue:  $390,000.  That is from the Dreamfall series.  So I anticipate that Dreamfall revenue, at best is at $100,000 per quarter.  Probably less than that now.
  Revenue sources:  Over half of Funcom's revenue comes from Europe.  That doesn't come across as good news for Age of Conan, because it is Europe in particular that seems to be suffering a population loss.  Perhaps that is being made up by an increase in players in North America, but traded one for one, a European subscription is worth more than a North American subscription.
  Population Stabilization:  If it was increasing even by a small margin they would say so.  So I take it the game is ever so slowly bleeding subscribers. 
  Anarchy Online:  Population levels are supposedly "satisfactory" which means it is worth it for them to keep it going...but that they are bleeding subscribers.
  So based on that I'm re-evaluating my Q1 numbers:
  Instead of $1,000,000 for AO a quarter I'm revising that down to $700,000.
  I'm adding $50,000 in income from Dreamfall. 
  That changes my May 15th prediction from 6.5 million US to 6.25 million US. 
  Lit
  

  
  
   

  Isn't this pretty much the same obvious statements as in your thread about how you expect FC revenue to go down for Q1.

  Let me burst your bubble, FC guided revenue for Q1 down, hence it is very likely to go down (comparing Q12009 to Q42008).

  If you want to talk about something exciting and more relevant you prolly should talk about Q22009, this is what all investors will be looking at shortly. If Q22009 is not up relative to Q12008, that is a very bad sign. If it gets a solid 2M bump up that's a very good sign.

  
  
   

  One of the interesting things to look at for 2Q will be the expenses side of things.   Free trials are NOT free to the company providing them.  Funcom pays about $5/month in bandwidth fees per account.  They have to pay those same fees on free trials.

  And yeah, 1Q revenues were guided down to 6-8M from 8.7M in the 4Q08.   But that is a pretty wide range.  Dropping to 8M isn't so bad, but if they drop from 8.7M down to 6M or fail to even hit their lower guidance, that is very bad news.
• Deewe Member UncommonPosts: 1,980

  May 2009

  The most interesting parts are here:

  •  "Funcom continues to invest in Age of Conan and expect the next 6-9 months to show whether they can once again enter a growth phase with the game."
    
    
    
    
  • "Age of Conan has been amortized since it's launch"
    
    
    
    

  The fact that it has been amortized is already a huge thing yet regarding the insane budgets going on that kind of games.

  Expect to see some big focus on AoC in the next 6 months and IF it fails the game will be mostly dead.