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City of Heroes Reaches Sunset, NCsoft Paying the Price
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."
"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.
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.
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.
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I'd like to know the REAL reason for closing it down.
City of Heroes 2. Same reason Bioware/EA went out of their way to get Galaxies taken down just before the release of The Old Republic: they want to create a demand for a certain type of game, then provide it soon after.
But when you buy a MMO, you have to know that it's not a permanent thing.
Yet amazingly, Everquest and even Ultima Online are still running, after 13 and 15 years respectively.
Which is why a casual gamer like me looks at a game with an on-line component and says "I'll pass".
I'm too old and lame to feel like getting my ass handed to me by a 12 year old, so any form of online play for me is a negative instead of a positive.
I want to be able to pop a game in the console, and play. I don't want to care if they have decided to shut down the server, or if they have some terrible DRM which requires me to be connected to the internet. If your game can't work on a console which has no internet connection, I am not interested in your product.
This sounds like one of those situations in which someone published a decently successful game, and then decided to leave the players out in the cold as they move onto other things. I suspect an awful lot of people will look at subsequent NCsoft titles and wonder if it will be playable in a few years.
Lost at C:>. Found at C.
What on earth are you talking about?
CoH was 5% of their revenue, I think 3%. It was never, ever, ncsoft's flagship product. They didn't even make it; they bought it from someone else. They saved it from being closed back in the day, and they made money on it, but it's never been their biggest game, or their most successful, or anything like that.
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Galaxies was maintained and owned by Sony. Bioware/EA had no control over Galaxies, though it already had a massively declining subscriber base even before SWTOR was announced.
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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.
"Slashdot, where telling the truth is overrated but lying is insightful."
Though some would argue UO died years ago and was replaced by an incompetent imposter.
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.
“Common sense is not so common.” — Voltaire
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.
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".
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.
They said that it's a strategic decision. No one said it was a good strategy.
As a player of CoH I've been watching this all unfold for months, and it's just sad on every level. Obviously sad for the players and developers, but there's a greek tragedy that is looming over NCSoft as well.
The 'strategic reasons' that caused NCSoft to shut down CoH is that they just don't understand the product -- an easy-to-play game friendly to casual players with little or no PvP content. That kind of thing doesn't sell in Korea and doesn't make sense to NCSoft's Korean masters. They have made a decision to consolidate their games along the Korean 'grind-and-PvP' model, possibly with a centralized game store using common currency, as some other large game producers have done. CoH could not be adapted to that model. Advertising in America would be additional cost for a marketing department that only understands Korean game culture. So they decided to effectively pull their games out of America and focus on what they know best back at home.
It's a strategy, I guess. They'll still sell games in America, but they'll be anglicized versions of Korean grindfests with little or no marketing. GW2 is a prime example...and the players there are beginning to understand that, with the GW1 gameplay replaced by ridiculous grinds and a 'pay to win' cash market, not to mention characters from the korean alphabet creeping into the American version of the UI.
Frankly I wouldn't trust NCSoft to keep any game alive in the Western market, not now and not for another year. They don't want to do business here. They don't want to make the kind of games that casual players enjoy. They want to have a stable full of Lineage clones, and cutting off a profitable CoH is the first step towards that strategic goal.
It's just a tragic display of hubris. They were even too short-sighted to consider selling the game. Just sad, all around. RIP, Paragon City. I'll remember you for letting me be a hero.
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So what happens if they sell it to someone competent? It does better. And ncsoft loses face.
NCSoft has lost face already. Their stock value has been sliding since the day of the Unity rally on the Virtue server, and their stock sank another 7.8% after the release of the Korea Times article questioning the business acumen of shuttering the game in the first place.
Without access to the reasoning behind the decision, I have no way to be sure why they decided to close the game -- particularly with it making a profit of about $2.75M a quarter -- but I believe that it was done to conceal the fact that they were already demonstrating their incompetence. NCSoft has brought to the Western market a number of MMOs rooted in the style of the games that are their bread and butter in the Asian market, with a heavy emphasis on grinding for rare drops, patronage of the in-game store, and PvP. That these games kept doing poorly and getting closed (Aion having shown "disappointing performance" in the last quarter), while City of Heroes -- almost the antithesis of the Korean style of MMORPG -- kept making a steady profit created the appearance of NCSoft not being able/willing to understand the Western market at a time when they were making an effort to become a major online gaming provider. With the ugly counterexample gone, NCSoft could rationalize that they just needed to find the right subject, rather than a different playstyle, to make an MMO popular in the Western market.
The company who started Everquest stated that they would not shut down the servers as long as there were active players. Who knows what will happen down the line though.
Also, they are still developing for this game, just a week or two ago the 18'th expansion was released.
I do not think there is any other MMO with anywhere close to the amount of content that Everquest has.
If you only played when the game first came out you would never recognize it as the same game.
Don't know something? Look it up. Still don't know? Then ask.
This was one of the beauties of CoH.
It was RIDICULOUSLY casual-friendly. And it was widely acknowledged that PVP in the game was a half-hearted attempt at best. Far FAR more development time went into PVE and MAJOR QOL improvements, where you don't have to worry about competing with "A. Random Kid" on the internet. Just play how you want to. Team when you want to. Do whatever you want in the game. No competition unless YOU desire it.
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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.
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.
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.
ACs don't waste your time replying, your posts are never seen by me.
Officially, NCSoft tried to sell it but failed - they released a statement on October 2 saying that: "We’ve exhausted all options including the selling of the studio and the rights to the City of Heroes intellectual property, but in the end, efforts to do so were not successful." The #SaveCoH community is profoundly skeptical of this, to put it mildly.
Unofficially, various parties have reported that their attempts to contact NCSoft to discuss the possibility of a sale never got anywhere - their emails, phone calls and letters all went unanswered. Bottom line is, so far there's been no indication that NCSoft want to do anything other than kill off CoH completely. If they let it be known that they'd be willing to sell it for just a few million, there'd be several interested buyers, or at the very least a heavily promoted (and I suspect heavily supported) Kickstarter campaign running right now.
I've often wondered how popular a kind of "MMO Minecraft" type game would be, where you start from a completely empty slate.
It'd be an MMO, with character classes and skills and items and crafting and PvP and mobs and all the other stuff that goes along with being an MMO. But, when the server starts, you have an empty world or continent. Nothing at all on it except natural terrain, plants, animals/mobs etc. It's then up to the players to mine the resources, build the cities, craft the weapons and armor etc. Like EvE Online, but not in space, mixed with Minecraft, but with better graphics and a proper class/skill/levelling system.
This could even extend to players or clans being able to physically purchase land and set permissions on who could build on or alter that area. Perhaps a particular clan would buy narrow strips of land running between settlements, and build roads or train tracks on that land (which the game mechanics would allow you to do, and which would permit much faster travel than walking). Others might become traders (since there's no NPC shops). Others might even offer secure storage facilities to players that had too much stuff to store in their personal inventory (i.e. they'd build some big, tough structure out of very-hard-to-destroy materials, allow people to put boxes inside with their stuff ... the game would have to support some 'locked box' permissions system to ensure that the building owner couldn't just steal everyone's stuff etc.)
Would be quite interesting to see which people tried founding cities and trade hubs, and failed, and which succeeded. And why did they succeed? Could they offer people in that area better security than in other areas? Was the area closer to transport or resources?
Anyway yeah, just a thought. I would totally play that kind of game...sounds awesome. I love sandboxey stuff (and don't like most conventional MMOs that are story/quest driven and prohibit you from doing certain things).
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.