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City of Heroes Reaches Sunset, NCsoft Paying the Price 290

Posted by Soulskill
from the old-mmos-never-die dept.
KingSkippus writes "At midnight Pacific on Saturday, December 1, NCsoft shut down the City of Heroes servers for the final time. Since announcing the closure, a group of players has been working hard to revive the game by getting attention from the gaming press, recognition from celebrities such as Sean Astin, Neil Gaiman, and Felicia Day, and assistance from fantasy author Mercedes Lackey. Meanwhile, NCsoft has been drawing negative publicity, including a scathing article about the shutdown from local news site The Korea Times, noting that the game was earning $2.76 million per quarter and that 'it is hard to comprehend what NCsoft means when they say they closed it for strategic reasons.' NCsoft's stock price has fallen over 43% since the announcement in August, almost 30% below its previous 52-week low, right when investors were counting on the success of the recently launched Guild Wars 2 to help boost the company."
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City of Heroes Reaches Sunset, NCsoft Paying the Price

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  • by Anonymous Coward on Wednesday December 05, 2012 @04:14PM (#42195385)

    "shut down the City of Heroes"... "for strategic reasons"... "to help boost"... "the success of the recently launched Guild Wars 2".
    Seems pretty clear to me.

  • by falcon5768 (629591) <Falcon5768 AT comcast DOT net> on Wednesday December 05, 2012 @04:29PM (#42195547) Journal
    I wouldnt say most. Most bad ones yes, but good ones have that have active player bases usually survive for a long time. I played FFXI for years before giving it up and even with the release of FFXIV they smartly did NOT kill the FFXI servers which turned out to be a good thing considering how poorly the newer game was received.
  • by Grimbleton (1034446) on Wednesday December 05, 2012 @04:29PM (#42195551)

    Though some would argue UO died years ago and was replaced by an incompetent imposter.

  • by OrangeTide (124937) on Wednesday December 05, 2012 @04:30PM (#42195555) Homepage Journal

    These MMOs are ultimately operating a service. Expecting them to operate it indefinitely is a bit naive.

    That said, it sounds like NCsoft's shutdown was premature. If a service brings in more revenue than it spends, why not keep running it? If it's a matter of getting it off the books and getting it off the executive radar, then spin it off into its own business as a wholly owned subsidiary. There are a lot of alternatives that don't amount to throwing a revenue stream in the garbage.

  • by Dinghy (2233934) on Wednesday December 05, 2012 @04:31PM (#42195565)

    Yes, there are many MUD's that have been running even longer. But that's citing the *exception*, not the *norm*. Most MMO's, like most MUD's, have a certain shelf-life.

    True, and the *norm* for shelf life is typically when the expenses start to outweigh the income. It sounds like the plug was pulled on this far earlier, if they're taking in $900k/mo.

  • True, but... (Score:5, Insightful)

    by KingSkippus (799657) on Wednesday December 05, 2012 @04:37PM (#42195641) Homepage Journal

    This is true, we always knew that the game would shut down at some point. However...

    The MMO genre of game is especially conducive to getting people to invest enormous amounts of time, effort, and money into the product. The average City of Heroes launch day veteran has probably spend between $1,500 and $2,000 on this game, many much more. And many have spent thousands of hours playing--not just mashing buttons, but coming up with creative stories, even contributing to user-generated content areas such as the Mission Architect system that allowed players to create their own custom enemies, contacts, mission objectives, dialog, etc. In other words, what NCsoft doesn't realize is that at this point, we have just as much stake in the game as they do (some would argue more), yet they hold the ultimate authority to unilaterally declare, "Okay, game over, we're going to destroy years of your effort and a large monetary investment." Not because the game wasn't making money--it was--but because they're undergoing a corporate "realignment" [pcgamer.com].

    Not only that, but in the process, they laid off over 80 employees at Paragon Studios, the Mountain View, California development studio that built and maintained City of Heroes. Before the shutdown announcement, a group of employees and investors tried to acquire the IP from NCsoft to keep the game running, but NCsoft wouldn't sell it. After the shutdown announcement, thanks to the SaveCoH movement, another attempt was made, but again, NCsoft wouldn't play ball, even releasing a statement that they had "exhausted all options" in trying to sell the game. Excuse me? Exhausted all options? They hold the IP. Now that the shutdown has come and gone and the community has largely dispersed, practically speaking, it's worth zero. It's impossible for them to have "exausted all options" unless and until the ink is dried on the page transferring the game and its IP to another company or organization that can run it.

    Not only that, but this isn't the first time that NCsoft has done this. This is the fifth game in as many years. Auto Assault. Exteel. Dungeon Runners. Tabula Rasa. Now City of Heroes. Clearly to me, the company is an MMO killer. The players of City of Heroes aren't the first group of people to have their hard work and investment destroyed, and apparently, NCsoft doesn't really care very much that it's systematically destroying communities and the output of people's creative expression. As a gamer, why the hell would I ever want to buy a game like Guild Wars 2 or any of NCsoft's other games? Answer: I wouldn't, and they won't be seeing any money from me again.

    So does NCsoft have the legal right to shut down City of Heroes, lay off everyone at Paragon Studios, and carry on as if nothing happened even though the company's own investor relations statements indicate that the game was steadily profitable and it had the overwhelming support of its development staff and management? Sure, no one is disputing that. However, I do firmly believe that NCsoft, and MMO game companies in particular, have an ethical obligation to do everything they can to plan for a game's sunset ahead of time and be willing to release the game property to another company or third-party organization willing to take over running it if one is willing to (which, in this case, there were multiple parties interested in doing so). To not do so shows an immense amount of disrespect for your customers, and you run the risk of generating the negative publicity and outcry such as the one NCsoft is facing right now.

  • by Rakishi (759894) on Wednesday December 05, 2012 @05:03PM (#42196063)

    You can't shut down your cash cow just because you're banking on your shiny new toy. What if the new toy flops? If SE had shut down FFXI prior to the diasastrous launch of FFXIV 1.0, the company would have gone bankrupt. All that time, the revenue from XI kept them afloat.

    CoH was not their cash cow, it made 2% of their revenues. I love how you make long arguments while knowing nothing of what you're talking about.

    If CoH was bringing in profit, however small it was, then there was no good reason to shut it down, no matter what "strategy" they're trying to go for. You can't push players from one game to another - MMOs don't work like that. They'll play both or none at all, and neither game has little bearing on which one that is.

    Profit is hard to define or rather it can't be looked at in isolation. Killing CoH means NCSoft can leave the North American market, 98% of their revenue is in Korea. So they can shut down their US offices, data centers, marketing, get rid of Korean personnel with N. America knowledge, Korean managers dealing with N. America and so on. Lot's of secondary costs that can be lowered or gotten rid of totally. Just saving the time and hassle (late hours, mis-communication, flight costs, etc.) of communicating with the North American offices may be worth it. So even if CoH was profitable in isolation, once you add in all those other North America costs that get saved it may very well be a loss. Either way NCSoft clearly didn't want to deal with the hassle.

  • by Remus Shepherd (32833) <remus@panix.com> on Wednesday December 05, 2012 @05:08PM (#42196117) Homepage

    Many flaws in your reasoning, but I'll pick at just one: The Paragon Studio employees weren't retasked to other games. They were unceremoniously canned.

    The *only* thing NCSoft gained by shutting down CoH was server space, which is pretty cheap. In return they lost a $2.75M/quarter revenue stream, a dozen or so experienced developers, and the goodwill of millions of gamers. (Hundreds of thousands of people who actually played, plus a lot of bad publicity.)

    At a minimum, they could have sold the game to a company that would have kept it running. Then they could have retasked their servers while pocketing a big cash infusion and avoiding bad press. But they were too short-sighted to even do that.

    What's the Korean word for 'clusterfuck'? That's the best explanation for this whole fiasco.

  • by Nefarious Wheel (628136) on Wednesday December 05, 2012 @05:44PM (#42196603) Journal

    I stopped playing Everquest when I became aware it was a Sony product. Because of their corporate practices, their support of RIAA and their proclivity toward suing their customers, I would not play it if the game lined my pockets with real gold. Sony taking ownership of any game I play is a switchable offense.

  • by Anonymous Coward on Wednesday December 05, 2012 @06:58PM (#42197775)

    City of Heroes was an embarassment to NCSoft.

    Now, not the kind you're thinking. It was profitable. It wasn't as profitable as their core properties - but NCSoft basically has the WoW of Korea in Lineage. Comparing it to that is a bit harsh. The thing is, that's not what NCSoft is thinking.

    They're thinking "We're the big shots. We can do this. In America. We just need the right subject matter."

    See, never forget - Korea's VERY nationalist. Insanely so. Up there with China and Japan. You can't even depict a samurai in Korea (The origins of "Arthur the Katana-wielding Knight for Soul Calibur"). And so is NCSoft. They see themselves as representing Korea. So they came to export Korea to the US in the form of Lineage 2 and Aion.

    Both of which did horribly. They failed, because we didn't want Korean Grindfest-style MMOs. We don't play 80% of our games in a net cafe (They do there). We are, a different market. And they needed to keep making up excuses as to why their Korean division wasn't dominating in America...and why City of Heroes was still alive when their 'theories' said it should be dead.

    The answer, in the end, is that City of Heroes was a constant reminder of the failure of their corporate culture. They they were wrong. And in Asia, being wrong is worse then taking a minor loss - their idea is, essentially, that 'social harmony' (Read: Less drama in the office) is worth some unprofitable practices.

    Like shutting down that embarassing American-grown MMO that's just a tiny bit of your bottom line, because you're also packing the WoW of Korea. Having it dead is the point right now. When they bought CoH, they saw it as a launchpad for their American business - now that they've failed to launch, it's time to remove any evidence of this foray to begin with.

  • by runeghost (2509522) on Wednesday December 05, 2012 @08:03PM (#42198469)

    This is the elephant in the living room of western capitalism that is seldom discussed. A corporation makes a reasonable profit doing what it was founded to do, employees are happy with their work and their pay, and customers are satisfied with the nature, quality and price of what they are buying. There are no signs of impending collapse, for internal or external reasons. And yet, it all gets torn down in search of higher rate of return, or a more profitable quarter, or bigger bonuses for a handful of executives.

  • by hairyfeet (841228) <bassbeast1968 AT gmail DOT com> on Wednesday December 05, 2012 @09:54PM (#42199411) Journal
    This is just another perfect example of "company doesn't listen to customers, company gets boned" which we have seen play out again and again and again. if it wasn't making a profit, or costing more in dev time that it was raking in? Then sure I could see pulling the plug, but its obvious that they yanked it to try to "force" more customers onto their "new hotness" and it blew up in their face.
  • by Crosshair84 (2598247) on Thursday December 06, 2012 @09:41AM (#42202893)
    The other elephant in the room is that this strategy very often bites you in the ass very badly. The vast majority of corporations, like the one I work for, doesn't do such stupid things because the boss/owner is in the business for the long term.

    One of our competitors dropped a lot of smaller facilities in one state they serviced because they weren't making the return they wanted. We snatched up as many of those contracts as we could. How did that bite our competitor you may ask? Because now we had a sizable market share in that state. Sure it was with the small facilities, but looking at a map it looked impressive. Soon word spread to the larger facilities about our services. When the contracts came up for renewal at the larger facilities, we had credibility, a good reputation to back us up, and a map showing the sizable coverage area we had. Our competition started to lose some of the larger, much more profitable facilities because they didn't maintain their less profitable ones.

    In the past, people made money off company stock through dividends. Under a gold standard, inflationary credit expansion was difficult and limited, any artificial credit expansion was cut short by people demanding payment in gold and the resulting recessions, required to clean up the errors made during the artificial boom, were relatively mild. The only way to make money was by long term investment in plant and equipment, to increase production and lower costs, and then pay out the company profits in dividends to shareholders.

    Today, under a government monopoly of fiat currency, the best way to "make" money is to get cheap credit from the central bank, or the large banks who have special favor with the central bank, and slosh it back and forth in the market. Whoever gets the new fiat money first benefits because they get to buy before that inflation has trickled into the economy and caused all prices to rise. That "sloshing" is why we see some prices rise more than others and at different times.

    Of course, sloshing around printed fiat currency doesn't make society more wealthy, It makes a select few richer by stealing the existing wealth from the poor and middle class via inflation.

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