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NC Soft Q2 loss
ElSandman
Member Posts: 94
http://www.gamesindustry.biz/articles/2012-08-08-ncsoft-makes-q2-loss-amid-spiralling-costs
Hopefully GW2 saves them. It would be a shame to see this developer/publisher go under.
Comments
A company as big as NCsoft is not going to go under because they lose 6 million dollars, and it's not even remotely close.
don't think there is any worry about that. companies worried about going under don't buy up other companies.
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Yeah quite likely, since it seems the cash cows that were funding the development of GW2 cannot do it alone anymore.
If that were true Blade & Soul would be launching next its the one thats been taking the most time. Face it Guild Wars 2 is done my friend and its ready for me to play it..
I'd say they're going to be fine. They can't recognize the revenue from GW2 until the game launches, so that's a huge increase. Also, a lot of their expenses are what's considered "extraordinary" meaning that they don't occur every period
Severance pay: One time only. Will eventually lead to lower labor costs due to lower future salaries
Marketing Costs: Seemed to increase to promote new games. Should see higher revenue resulting from marketing
Royalty Expenses: Due to an acqusition. Another one time only expense
I doubt their investors are worried. Quarter 3 should show better results
I wonder, why have pre-purchase at all if they can't recognize it until launch anyway? From what I heard, you can still get your money back if you contact their customer support even if you pre-purchased. I thought the whole point of that was to make this kind of financial report looks good, but obviously I'm mistaken.
Anyway, if GW2 numbers are not included, there is absolutely nothing to worry about. Their total revenue is reported to be 130m. My personal guess is that they will get about the same amount come launch day from GW2 alone.
They can't recognize the revenue until the game launches. In accounting it's called the "matching principle". Meaning, if a company takes your money for a product, they cannot recognize the revenue on it until the product is delivered. Basically, when you're buying a product you are entering into a contract with the company. You have fulfilled your end of the contact by giving them your money. They have not fulfilled their end yet because the game has not released. Therefore, it would be illegal for them to count it as a "sale".
The reasons for pre-orders are two-fold. One, it's a great thing to use in the marketing for the game like "X game has sold one million pre-orders! Get your copy today!". Second, having cash today is much better than having cash tomorrow. Companies want your money as soon as they can get it
agree - Microsoft posted their first loss recently too
http://www.ign.com/articles/2012/07/19/microsoft-posts-loss-on-quarter-4-earnings-report
Microsoft has posted their first ever loss in the company's 26-year history - $492M to be precise
do people wonder about Microsoft going under?
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