Friday, June 5, 2015

I'm Back With A Prediction

After three days of spotty to non-existent internet connection, I am back on-line. Between Madison and the local Starbucks, I managed to download an order I placed for some records. After reading the documents, I have a prediction. CCP will probably close an office in the U.K. next month.

Before anyone gets excited, EVE Online is not dying. CCP is not dying either. No one, as far as I know, is even getting laid off. According to the financial reports CCP released over the past few years, the company has a non-negotiable lease for office space in the U.K. expiring next month.

I think everyone by now knows about the home of EVE: Valkyrie, Newcastle. But CCP also has offices in Gateshead, across the river from Newcastle, and Slough, about 20 miles west of central London. The Newcastle office is definitely not closing. Not only is the development of CCP's main virtual reality product occurring on the north bank of the River Tyne, but CCP moved the registered office address of CCP Games UK Ltd. from Slough to Newcastle in April. So that leaves Slough and Gateshead.

UPDATE: I may have goofed on the identification of 3 offices. After looking at a map, I found a Fletcher Road in Newcastle but not in Gateshead. The last office at the bottom of CCP's website is probably meant to read Fletcher Road, Gateshead Quay, Newcastle, not Fletcher Road, Gateshead. If so, then CCP only has two offices in the U.K.

Screenshot of offices on CCPGames.com, 5 June 15


Without having access to any lease information, I think the most likely candidate to close is Slough. First, my understanding is that office space is much more expensive in the London area than in the north of England. Next, CCP did move the registered address of its U.K. subsidiary from Slough to Newcastle. Finally, having all employees working within a few miles of each other is probably more convenient.

I think my theory contains a hole, however. What about the guys working on the servers in the London data center? Don't they need support too? Perhaps getting into a long-term lease isn't attractive if CCP decides to move Tranquility to Amsterdam or another major internet crossroads on the continent. Also, maybe CCP rents office space in the data center already.

At the end of the day, if and how CCP plays musical chairs with the offices in the U.K. doesn't impact the games we play. So if someone breathlessly announces that EVE is dying because an office closed, don't worry. Leases for office space expire all the time. And if CCP renews the lease? Then CCP's financial situation is not as bad as some fear. Or as bad as some haters hope.


6 comments:

  1. Viince_SnettertonJune 5, 2015 at 12:57 PM

    I agree with your comments about the office closing, not really a big deal. Now, maybe the reports you requested are more detailed, but based on the stuff that was reported on last week, I would say that CCP is on the knife-edge when it comes to cash-flow and profitability (yes, I know the two things can be quite different, in the short run).

    If the new null sec mechanics don't draw back players, or if CCP alienates more of the high sec crowd, I think 12 months from now we will see an awful lot of red in Iceland, both on paper and in the unemployment office.

    ReplyDelete
  2. I agree with all of that except the server people. I do not know the specifics and have more experience as a developer than an IT person, but I would assume the servers would be managed from people in Iceland. Isn't remote server management the standard these days? Are you sure there are London employees for the servers?

    ReplyDelete
  3. It depends on the agreement that CCP has with the operators of the data center. There may be some things that CCP has to be on-site to approve. I know we had that happen a few times at my former job. If so, you don't want your server techs 5 hours away in Newcastle in case of an emergency that takes down Tranquility.

    ReplyDelete
  4. I've got a tinfoil-filled theory that the assumptions that were going into the books were a little funny (okay, wildly optimistic) and the accountants have been cleaning up the mess over the past two years. Judging by what I've seen, that period should be over now and the numbers for 2015 should more closely reflect reality.

    ReplyDelete
  5. OK. My mistake - I just assumed that software was managed remotely and IBM or the datacenter did hardware repair.

    ReplyDelete
  6. 'After looking at a map, I found a Fletcher Road in Newcastle but not
    in Gateshead. The last office at the bottom of CCP's website is probably
    meant to read Fletcher Road, Gateshead Quay, Newcastle, not Fletcher
    Road, Gateshead. If so, then CCP only has two offices in the U.K.'

    Gateshead is within the Newcastle postcode area, hence the NE prefix (https://en.wikipedia.org/wiki/NE_postcode_area). It seems unlikely there were ever two offices there. There is a discrepancy between the way the address is listed on some sites as Gateshead and others as Newcastle, but the building name, street and postcode are consistent. It's just a quirk in the way addresses are noted in the UK (sometimes people use the closest town rather than the broader geographical area).

    That Slough office is a PO Box by the looks of it. https://en.wikipedia.org/wiki/Post-office_box. If it was a working office with staff, we'd have probably heard about it before now.

    ReplyDelete