Pachter: Amalur IP is Worth $20 Million

[Gatx]

If 38 dies it really is their own fault. What do those business meetings sound like. "Okay so we have a single game under our belts that did decently, but we don't have much money, or an established brand with a devoted following. With this in mind I've decided the best course of action is to make an MMO next, the most expensive and risky genre around." Sounds like another case of Icarus flying too close to the sun.

Is the genre really that risky? A ton of them come out of Asia all the time (granted none of them bother to really innovate).

 

[grigjd3]

My question is why do we always see Pachters predictions coming up in news articles. Is he just that good at it or is it that he's entertaining.

I'm sorry if that's only tangentially on topic but it's been bothering me for awhile now.

It's that he actively comments on gaming. Believe it or not, there are not that many market analysts that focus only on the gaming sector and give it most of their attention and are willing to talk about it as much as he is.

 

[Keava]

Is the genre really that risky? A ton of them come out of Asia all the time (granted none of them bother to really innovate).

It is in western part of the world. Most Asian MMOs are based on micro-transaction model, very much pay2win and extensive grind, and they like it that way. Take a loot at most common, single player, jRPGs. They usually are built around the idea that at some points of game you have to just run in circles popping random encounters to level up/get items/get cash, and their MMOs work exactly in the same way. Furthermore the whole micro-transaction model is very much based on peer pressure, which is much stronger among Asian cultures.

This however doesn't work well in EU/NA. People here prefer more refined gameplay, hence even the titles that are licensed from Asian companies are often tweaked for western audience (higher exp rates, higher drop rates, higher quest rewards).

Even then, you have the issue you mentioned - most of Asian MMOs are pretty much same game, based on modified L2 engine/mechanics, and the only thing that changes between the games is the backstory. That doesn't really work in west either. We like more variety.

If you add up all those things and then think about costs of developing MMO, the time it takes to create one, the costs of customer support, regular update, server upkeep... You need a huge pile of money ready for it. Even huge companies can't risk such things.

Look at BioWare with SWTOR, they had great IP that in theory should guarantee long term success, they had money to make it and backing from one of the biggest publishers - EA. Yet even then they ran out of money during developement periods, which led to rushed release, which led to ton of issues in first months, which means now they have to play catch-up to bring the game up to proper state, which causes people to unsub because they don't want to pay monthly fee waiting for features that should be there from day one.

These days, nearly 8 years after WoW release, to really be able to establish a MMO you need something fresh. TSW has it's setting and puzzle based investigation missions, lack of levels and classes and some very interesting ideas mixed in. GW2 has buy2play model with cosmetic cash shop, semi-action combat and dynamic questing. PlanetSide2 will be free to play, with cosmetic cash shop (or so they say) and is actual MMOFPS (as in ~800 people fighting on single persistent map, and not just big lobby for small 10 minute matches). Those are things that are needed now if a company even hopes to not sink after first 3 months.

 

[Freechoice]

Eve isn't technologically dated. CCP has put more effort into keeping their game looking good and adding more content than Blizzard has with WoW. Granted, the nature of that content is different due to the opposite natures of themepark and sandbox MMOs, but There's nothing partucularly "old tech" about Eve Online in 2012. Hell, they're getting DirectX 11 support soon.

Also, I'm not sure that SOE has any choice about SWG. That was probably Lucas Arts' call.

They're CCP,
They march on fearlessly,
excellence is what they strive to be,
if you're going to follow them to the top,
HEIGHTEN. THE. FUCK. UP.

 

[w00tage]

Oooh the generic fantasy mmo isn't too appealing in a genre filled with generic fantasy mmo's. There's a shocker.

Who's bright idea was it to go for this anyway? Their company is barely established, let alone the brand. Cart before the horse in full effect here.

The backer, Curt Schilling. He's a diehard MMOer. Judging by the results of the single-player game, they did a pretty good job. It's not their fault SOMEONE decided to stage a grandstand MMO play and fell on their faces.

 

[Pedro The Hutt]

"Nobody is buying MMOs after [Star Wars: The Old Republic] fizzled," he said. "I think value is low, probably $20 million or so. There is just no demand for game assets right now, as THQ proved when it tried to sell the Warhammer MMO. I think [Electronic Arts] could step in, since they are the publisher, so you might see some alternative way to get [38 Studios] some bridge financing."

I love this part of his commentary. So apparently is not only 1.3 million active subscribers a flop, but apparently TOR also killed the world's mood for other MMOs to boot. Did he take money from Blizzard to say this? I know he's kinda desperate for it.

 

[The Wooster]

My question is why do we always see Pachters predictions coming up in news articles. Is he just that good at it or is it that he's entertaining.

I'm sorry if that's only tangentially on topic but it's been bothering me for awhile now.

He's not really "good," but he's a name. He usually makes outlandish predictions, to the point that if he says the sky is blue, I assume the sky has caught fire until proven wrong. He occasionally says the painfully obvious and sometimes seems to get lucky, but how he's still in a job is anyone's guess.

Same way other analysts do like ESPN or meteorologists. Even if he's right only 30% of the time, if the average person is right only 20% of the time it's enough to warrant him as an expert. Plus I'm sure his actual job involves more along the lines of predicting numbers, such as Amalur's worth, instead of actual gaming news, as you say they just go to him because he has some minor celebrity status now, same as every time Notch says something. But I wouldn't hold it against Pachter or Notch, I don't think they're going out of their way to get the spotlight, the game media just focuses on them more than others.

Pachter is quite savvy at courting the press: "It's a symbiotic relationship. I try to give you guys what you need, and I use the press to promote myself so that more investors want to talk to me. That helps me get paid more money." [http://www.escapistmagazine.com/articles/view/issues/issue_280/8315-The-Crystal-Ball-of-Michael-Pachter]

Pachter is fun to write about because he makes ballsy calls. He gets it right quite often, but people then start harping on about he "states the obvious." The great irony, of course, is that they're usually saying that with the benefit of hindsight.

 

[Spartan212]

Is it just me, or is Anet's tweet a bit of a cheapshot to 38 and Bioware?

Sympathies to those affected by recent layoffs in the industry. We're hiring for #gamejobs [https://twitter.com/search/%2523GuildWars2] ^RB

— ArenaNet (@ArenaNet) May 24, 2012 [https://twitter.com/ArenaNet/status/205775006012153856]

 

[archvile93]

If 38 dies it really is their own fault. What do those business meetings sound like. "Okay so we have a single game under our belts that did decently, but we don't have much money, or an established brand with a devoted following. With this in mind I've decided the best course of action is to make an MMO next, the most expensive and risky genre around." Sounds like another case of Icarus flying too close to the sun.

Is the genre really that risky? A ton of them come out of Asia all the time (granted none of them bother to really innovate).

Good point, with that in mind I guess it depends on what kind of MMO you want. Ones like maple story I imagine are much cheaper since it didn't even bother to have a third dimension. The other ones I see adverstised online like on newgrounds seem to be very PvP focused, which would suggest they don't have much in terms of size, just a few arenas like a standard FPS multiplayer mode (I haven't played any of them though, so I could be wrong about that). If you want one that has some worthwhile PVE however, you'll need very large and varied landmasses. That is going to cost you a lot, and since this MMO is going to be styled like KoA, I imagine they'll want large environments.

 

[Adam Jensen_v1legacy]

Pachter is not a fuckin' analyst. Stop saying that! People might actually believe it. He's just an idiot who says either the most obvious things or he's just plain fuckin' wrong.

 

[Keava]

Is it just me, or is Anet's tweet a bit of a cheapshot to 38 and Bioware?

Sympathies to those affected by recent layoffs in the industry. We're hiring for #gamejobs [https://twitter.com/search/%2523GuildWars2] ^RB

— ArenaNet (@ArenaNet) May 24, 2012 [https://twitter.com/ArenaNet/status/205775006012153856]

Cheapshot? Dunno. If the day comes I'll loose my job I'd be quite happy too know there is some other company looking for people in the same industry.
Sure sucks to loose job, but it's always better to know that someone out there actually may be looking to hire you.

 

[w00tage]

Oooh the generic fantasy mmo isn't too appealing in a genre filled with generic fantasy mmo's. There's a shocker.

Who's bright idea was it to go for this anyway? Their company is barely established, let alone the brand. Cart before the horse in full effect here.

The backer, Curt Schilling. He's a diehard MMOer. Judging by the results of the single-player game, they did a pretty good job. It's not their fault SOMEONE decided to stage a grandstand MMO play and fell on their faces.

They should've spent more time building up the franchise. Get it established in the mainstream mindset a little before making your big, super expensive move. This is going to kill their company.

How without producing products? Their first product has sales of 600k or so, which is about 36m gross. Subtract retailer and distributor commissions and it must be down to around 25m back to them. Subtract taxes and you're under 20m return for a 50m investment to date. And I bet it'll be months before they even get that money through the channels.

Short answer - they took a shot (a good one imo) and it just didn't succeed fast enough to pay them back fast enough to pay their bills fast enough.

Now if their investors weren't amateurs, they could hold out for the long haul, pump out expansions and "hard mode" rulesets and such for the game, doing exactly what you recommend. But I bet the investors and pulling the plug to cut their theoretical losses so they can go invest in something else.

Too bad, but maybe they'll let us mod it? That's a great way to put longevity on a property.

Edit: just saw that Curt Schilling claimed they sold 1.2m copies, so you can double my numbers up there. I only found 600k via Internet research, but I'll go with Curt. This also means my investment numbers could be off to, so feel free to offer corrections. I don't think it changes the conclusion though.