NetEase Lays Off U.S. Staff Ahead Of Announcing 2024 Financial Results

I heard that NetEase laid off an internal development studio working on its hit game Marvel Rivals based in Seattle, Washington. MassivelyOP used the phrase "major layoffs" in the title of that sites news article. So I decided to find out just what major means.

According to GeekWire, the answer is six.

According to NetEase, a total of six U.S. employees were dismissed, including level designer Garry McGee. Notably, this was not the entirety of the Rivals development team, the core of which is headquartered in Guangzhou, China.

“We recently made the difficult decision to adjust Marvel Rivals’ development team structure for organizational reasons and to optimize development efficiency for the game,” a NetEase spokesperson said in a statement to GeekWire. “This resulted in a reduction of a design team based in Seattle that is part of a larger global design function in support of Marvel Rivals. We appreciate the hard work and dedication of those affected and will be treating them confidentially and respectfully with recognition for their individual contributions.”

Apparently most of the work on the game is performed in China. In a statement to IGN, NetEase stated:

“We want to reassure our fanbase that the core development team for Marvel Rivals, which continues to be led by Lead Producer Weicong Wu and Game Creative Director Guangyun Chen in Guangzhou, China, remains fully committed to delivering an exceptional experience,” NetEase continued.

“We are investing more, not less, into the evolution and growth of this game. We’re excited to deliver new super hero characters, maps, features, and content to ensure an engaging live service experience for our worldwide player base.”

Wow, layoffs in the U.S. workforce of NetEase. The U.S. has more expensive labor costs than China, and those on the west coast of the U.S. are higher than average. Without doing any research, the news felt like a move to placate investors right before a company has to give out disappointing financial news. I know, I know, how cynical of me. Then I saw a press release from NetEase pop up this morning talking about the company's Q4 and overall 2024 financial results. Here are the highlights.

Fourth Quarter 2024 Financial Highlights

• Net revenues were RMB26.7 billion (US$3.7 billion), a decrease of 1.4% compared with the same quarter of 2023.
  
  
• Games and related value-added services net revenues were RMB21.2 billion (US$2.9 billion), an increase of 1.5% compared with the same quarter of 2023.
• Youdao net revenues were RMB1.3 billion (US$183.6 million), a decrease of 9.5% compared with the same quarter of 2023.
• NetEase Cloud Music net revenues were RMB1.9 billion (US$257.6 million), a decrease of 5.3% compared with the same quarter of 2023.
• Innovative businesses and others net revenues were RMB2.3 billion (US$313.1 million), a decrease of 17.0% compared with the same quarter of 2023.
  
  
• Gross profit was RMB16.3 billion (US$2.2 billion), a decrease of 3.3% compared with the same quarter of 2023.
  
  
• Total operating expenses were RMB8.5 billion (US$1.2 billion), a decrease of 15.1% compared with the same quarter of 2023.
  
  
• Net income attributable to the Company's shareholders was RMB8.8 billion (US$1.2 billion). Non-GAAP net income attributable to the Company's shareholders was RMB9.7 billion (US$1.3 billion).[1]
  
  
• Basic net income per share was US$0.38 (US$1.89 per ADS). Non-GAAP basic net income per share was US$0.42 (US$2.09 per ADS).[1]

[1] As used in this announcement, non-GAAP net income attributable to the Company's shareholders and non-GAAP basic and diluted net income per share and per ADS are defined to exclude share-based compensation expenses. See the unaudited reconciliation of GAAP and non-GAAP results at the end of this announcement.

Since I'm already looking at the press release, here are some highlights concerning the gaming parts of NetEase from 2024.

Net Revenues

Net revenues for fiscal year 2024 were RMB105.3 billion (US$14.4 billion), compared with RMB103.5 billion for fiscal year 2023.

Net revenues from games and related value-added services were RMB83.6 billion (US$11.5 billion) for fiscal year 2024, compared with RMB81.6 billion for fiscal year 2023. Net revenues from the operation of online games accounted for approximately 96.2% of the segment's total net revenues for fiscal year 2024, compared with 92.9% for fiscal year 2023. Net revenues from mobile games accounted for approximately 72.7% of net revenues from the operation of online games for fiscal year 2024, compared with 75.2% for fiscal year 2023. The change in revenue mix was mainly due to higher net revenues generated by PC games such as Naraka: Bladepoint and licensed titles.

Gross Profit

Gross profit for fiscal year 2024 was RMB65.8 billion (US$9.0 billion), compared with RMB63.1 billion for fiscal year 2023.

The year-over-year increase in games and related value-added services' gross profit was primarily due to increased net revenues from the operation of online games, such as Identity V and Naraka: Bladepoint PC and mobile games.

Operating Expenses

Total operating expenses for fiscal year 2024 were RMB36.2 billion (US$5.0 billion), compared with RMB35.4 billion for fiscal year 2023. The year-over-year increase was primarily due to higher research and development investments for games and related value-added services.

I want to make a couple of points to close out this post. The first is that the Chinese yuan fell 2.8% against the U.S. dollar in 2024, thus meaning when calculated in U.S. dollars NetEase's increases may have been due to the effect of foreign exchange valuations.

Next, while Marvel Rivals apparently is doing well, the game is not at the top of the mind of NetEase leadership who are more impressed with PC games like Naraka: Bladepoint and Identity V. If only the developers of top games are safe from layoffs, then the staff of Marvel Rivals didn't make the cut.

But even then, apparently only U.S.-based staff was affected by layoffs. Why? A very good possibility is the increasing strength of the U.S. dollar against the Chinese renminbi. If staff needs to be cut, then cut the staff with the highest labor cost. If U.S. workers are too expensive on average, then those on the West Coast are even more so.

One last thought. NetEase is a Chinese company. As such, they need to stay on the good side of the CCP (Chinese Communist Party). I don't know if people realize, by the economy in China is not doing so well. If job cuts are to occur, who will they cut, Chinese citizens or those overseas? Over the past year or so, the answer has been reducing staff outside China.

Running Public Contracts In High Sec Is A Rich Player's Game

I have to admit I'm more active this year in EVE Online than I was last year. But the wallet UI really exaggerates the effect.

My wallet as of this morning

Just looking at the overview the UI would leave one to believe I brought in 5.8 billion ISK in the past 30 days. But that number is vastly inflated because of a side hobby I have in EVE: running public courier contracts.

Courier contract deposits paid

Over the past month I've submitted over 5.3 billion ISK in collateral to carry out 9 courier contracts. Of course, I didn't pay all those deposits at once. The most I had out at any one time was a little less than 1.96 billion ISK. So for what I transported I needed 2 billion ISK just to accept the contracts.

CCP explains what a courier contract is in a support article.

Courier contracts are created to formalize the moving of items between locations by other players. The items selected during contract creation will be packaged into a "Plastic Wrap" package, which will be given to the contractor to be delivered to the target location. To prevent the contractor from simply keeping the package for his own, a collateral should always be set on a courier contract, which has to be paid by the contractor upon accepting the contract and will be returned to the contractor upon successful delivery. It the contract fails for any reason, the creator of the courier contract will receive the collateral instead.

For example, yesterday I decided to complete a courier contract from the Minmatar trade hub of Hek to the Gallente trade hub of Dodixie, a trip of 8 jumps.

My first contract yesterday

As you can see, I put up 510 million ISK for the opportunity to gain 6 million. Not a great payout, right? But the trip was completely in high sec, although half the systems were 0.5 security systems. But I didn't use, say a regular industrial ship like a Mammoth to transport the package.

I used a deep space transport

Instead I used a Mastodon, the Minmatar tech 2 deep space transport. Not only is the ship harder to gank in high sec, but with a 62,500 m3 fleet hanger due to having all skills trained to level V, I can comfortably accept contracts up to 60,000 m3. Of course, the price of a Mastodon in Hek right now is 248 million ISK.

Now, I think some people are doing math right now. I put down a 510 million ISK deposit to perform a courier contract worth 6 million ISK in a ship who's hull alone costs 248 million ISK? Am I crazy? Or, looking at my wallet, does owning PLEX worth over 8 billion ISK make me not care about loss so much? Especially since CCP game me most of the PLEX when Aurum was removed from the game years ago.

Either way, the reason isn't all the ISK I brought in over the past 30 days. Of the 5.8 billion ISK, 5.3 billion ISK was the return of my deposits upon the completion of courier contracts. I kind of wish the developers would make the interface not count the return of deposits as income. I'm pretty sure they could match up a deposit with a return deposit and zero out the amount upon completing the contract. But considering running public contracts is probably a niche activity in a niche game, I'm not sure I could make the business case for applying the resources to make the change.

The Drifter Crisis Of 2025 - Updates To The Patch Notes And Lore

"No plan survives first contact with the enemy."

- Field Marshal Helmuth von Moltke the Elder

I'm a little disconnected from events in EVE Online. I just tend to my planetary industry, carryout public courier contracts when available, and play the Project Discovery mini-game. Other PvE content does exist, such as the current live event in EVE called "The Drifter Crisis". We are three weeks into the event so perhaps an update is in order.

One of the elements I appreciate, even if I don't participate, is the mixing of game changes into the lore. So, for example, a player victory over a Vigilant Dreamer in Tash-Murkon resulted in an upgrade in player capabilities.

Using telemetry gathered during the Vigilant Dreamer’s destruction in Tash-Murkon, the Society of Conscious Thought has been able to synthesize new upgrades for Crisis response fleets. Targeting computer modifications and improved hyperspace tracking methodologies will ensure Vigilant Dreamers remain available for assault as long as they are in a system.

Okay, the reality is probably a little different. The devs probably needed to adjust some timing features to give players more time to engage the big bosses in the fights. But the lore spin makes the adjustment sound cooler. Especially since the players involved in the Tash-Murkon battle are now enshrined in the lore.

Three weeks into the event and New Eden has changed, at least in Empire space. First, the patch notes from 5-12 February concerning the event.

Patch Notes for 2025-02-05.1

Balancing: Drifter Crisis

• Influence has been adjusted:
• Removed Influence loss when failing certain Crisis sites
• Increased Influence gained when completing Crisis sites
• 'Crisis Resolution: Vigilant Dreamer' sites will only appear if at least 2 days have passed within a Crisis system
  
  
• Greatly increased the number of Observatory Spectrography items found within 'Crisis: Observatory Infiltration' sites
  
  
• Added a 30-minute failure timer which will start during a lockdown if the short lockdown timer modifier is not active within a 'Crisis: Observatory Infiltration' site
  
  
• Roaming NPCs within Drifter Crisis systems will no longer attack capsules

Patch Notes for 2025-02-06.1

Drifter Crisis:

• Added a Patient Beacon which will spawn within a 'Crisis: Observatory Infiltration' site when the lockdown defense fleet modifier is active.
• This object can be hacked to disable the defense fleet from appearing during a lockdown.
  
  
• Added a minimum amount of contribution capsuleers will need to meet to be considered for a 'Crisis: Observatory Infiltration' site's payout.
  
  
• Added an Info Panel objective which states if the site is in lockdown within the acceleration gate area of a 'Crisis: Observatory Infiltration' site.

Patch Notes for 2025-02-11.1

Drifter Crisis:

• Remove the failure timer from ‘Crisis Resolution: Vigilant Dreamer’ sites.
  
  
• Decreasing the rate of Influence decay over time within high-security Crisis systems.
• Influence can now be gained incrementally within certain Crisis sites.
  
  
• For example, successfully hacking a Drifter Collection will now give a share of that site’s influence rather than all on completion.
  
  
• Only players within 100km of a Crisis site’s focal point will be considered eligible for payouts. The focal points are as follows:
• Crisis: Field Rescue — The celestial beacon.
• Crisis: Observatory Infiltration — The Unmoored Jovian Observatory.
• Crisis: Deathless Research Outpost — The Wormhole Research Outpost.
• Crisis: Lancer Counter Offensive — The Destructive Scrutinizer.
• Crisis Resolution: Vigilant Dreamer — The Vigilant Dreamer.
  
  
• Increasing the maximum number of sites available within each Crisis system.

And what does the lore say about the major players in the event?

Amarr

Following the player's victory in Tash-Mukon, the home system of Empress Catiz I, the factions had the following reactions. First, the Empress:

“Almost nine and a half years ago, my predecessor was assassinated by a fleet of the same profane monstrosities that plague our heavens once more,” The Empress began, “They dared to try usurp our Lord’s will and challenge our faith. Well, the faithful have risen to that challenge like a righteous flame! In these skies, as in Kobam and in Anath, we have proved that none can stand against us!”

Next the opposition, which in typical Amarr fashion is all the other royal houses:

Lord Tunir Tash-Murkon, heir and head of House Tash-Murkon, welcomed the empresses' words, adding his gratitude for the support of the other Heirs during this trying time. The other Royal Houses have historically held mixed sentiments towards the Tash-Murkon. Their Udorian heritage and pragmatic economic approach have caused some members of the Holder caste to join militant terrorist organizations like the Disciples of Purity (formerly Purity of the Throne) rather than acknowledge Empress Catiz Tash-Murkon I as their ruler. Today, not a single negative sentiment could be found in print regarding the House as people took to the streets to celebrate across the Empire. Lord Arim Ardishapur even went as far as to call their victory “a sign of divine purpose”, going on to say that “in this time of conflict, we are blessed to have an Empress from such a resilient people.”

Caldari

The Caldari did suffer a setback in Fuskunen but chose to focus on their successes.

Chairman Akimaka Saraki has once again commended State forces and capsuleers alike for their successes in Ichinumi, Silen, and Ruvas. “Swift in their response, our loyal ships were the first to force a Drifter retreat. A unified and disciplined response with capsuleer support has proven once more to be the key that unlocks triumph.” Megacorporations Lai Dai, Sukuuvestaa, and Hyasyoda joined the chairman in his praise as their stations within the affected systems were able to return to business as usual. Saraki commented that, “When faced with an outside threat, there are no factions, only Caldari.”

Minmatar

The Minmatar system of Hadozeko was hit hard by the Drifters. While the factional warfare facilities survived relatively unscathed, the tribes on the system's planets were not so fortunate. The overall political impact of the Drifter attacks was rather muffled compared to those of the Amarr.

Despite their initial lack of preparation, an incredible effort by Minmatar forces and their capsuleer allies was more than enough to defeat the Drifters first in Geffur, then in Nein. Sanmatar Maleatu Shakor has cited these victories as “proof of the importance of tribal unity.” Thukker Chief Ennar Aeboul who has been openly critical of the Republic’s response declined to comment.

Gallente

I don't want to say anything about the way Gallente fight, but I really wouldn't take a drone boat in against Drifters. Then again, perhaps my way of thinking is archaic.

The first to warn of the coming Crisis, the Gallente Federation has suffered most greatly as it unfolds. The systems of Hare, Niballe, and Gererique all experienced significant losses despite capsuleers' best efforts. President Celes Aguard has called once more for capsuleers to “join us in standing up for liberty. These invaders openly call themselves tyrants, they must not be allowed to harm our citizens. Even now they attack us once more in Nausschie, Ravarin, and Uphene. It is up to us to secure the future of our democracy, our liberty, against these aggressors.”

Then again, perhaps the uproar over an “irresponsible” Niballe mindclash tournament whose fans disrupted evacuation efforts shows the Gallente sometimes don't have their priorities in order.

Society of Conscious Thought

The SoCT took over the Jove's role as the provider of advanced technology years ago.

Using telemetry gathered during the Vigilant Dreamer’s destruction in Tash-Murkon, the Society of Conscious Thought has been able to synthesize new upgrades for Crisis response fleets. Targeting computer modifications and improved hyperspace tracking methodologies will ensure Vigilant Dreamers remain available for assault as long as they are in a system.

The Drifters

And as players wouldn't have direct knowledge of Drifter plans and motivations, the Society speaks for them through their intelligence network.

At the same time, however, SOCT intel indicates that Drifters are committing to more persistent Vigilant Dreamer deployments. Dreamers are now expected to remain in system until they have completed their task or are destroyed in the attempt. This will mean no more retreats by Drifter forces as long as their Vigilant Dreamers remain operational.

The SOCT has also observed a spike in Drifter hyperspace communication traffic throughout the Amarr Empire simultaneous with drops in traffic throughout Gallente space. These changes followed the recent successes against the Drifters in Amarr space, along with uninterrupted streams from Drifter sites in Federation space.

At the end of January the number of players logged into EVE was in decline. When Jester's next ACU graph is published I'll be interested to see if these changes had any effects on the activity in New Eden.

Cloud Imperium Games Issues $5 Million In New Shares

A question I've had for over a year now is whether Cloud Imperium Games are making enough money to complete development of Star Citizen and Squadron 42 without further injection of outside investment money. The company still hasn't filed its 2022 accounts with UK Companies House but another filing might shed some light on the question.

Yesterday Cloud Imperium filed a form SH-01, titled "Return of Allotment of Shares". An allotment of shares is:

... the process of creating and issuing new shares in a company. This can happen when the company is initially registered (or incorporated), and whenever there is a change to its overall share capital – such as after a funding round.

A SH-01 must be filed with UK Companies House within 30 days of the creation and issuing of the shares.  Below is the first page of the form filed by Cloud Imperium.

Going through the form, we can see that CIG created and issued 247,520 ordinary shares, or approximately 2% ownership of the company, on 15 January 2025. The form also indicates the currency the shares are sold for if money is involved as well as the price of each share. In the case of this transaction, each share was purchased for $20.20 in US dollars for a total transaction value of $4,999,904, or near enough to $5 million as makes no difference.  Because the amount unpaid line equals 0, we know the payment was made in full.

The big question unanswered is who received the shares? The information is not part of the SH-01. Instead, companies in the United Kingdom file a confirmation statement (form CS-01) a minimum of once a year. Unless one of the parties in the transaction holds a press conference, inquiring minds will need to wait for additional filings from CIG to Companies House. CIG usually files its confirmation statements in September of each year. Unless a celebrity like Henry Cavill bought the shares, though, the information probably will remain private for another 6-7 months.

For those interested in the information provided concerning the ownership of shares, I've included a page from CIG's 2024 confirmation statement below.

Finally, this transaction answers a question I've wondered about for years. How much is Cloud Imperium worth? Back in 2018 when the first tranche of investment money came in from the Calders, CIG was valued, after the deal, at $496 million. Six years later, the share price gives us the ability to calculate the market cap of Cloud Imperium. The company's market cap is approximately $242 million, a little less than half the valuation reported in December 2018.

After yesterday's posting of the SH-01 I am really interested to see who acquired the new shares. I'm also looking forward to seeing additional financial data from 2023. After all, the company has to submit the documents sometime, right?

Pearl Abyss Q4 2024 Earnings Call

On Tuesday in South Korea, Pearl Abyss held its earnings call for the fourth quarter of 2024. The company experienced a quarter-over-quarter increase in revenue of 20.4%, from ₩79.5 billion ($58.6 million) in Q3 to ₩95.7 billion ($68.5 million) in Q4. Year-over-year the company's fourth quarter revenue increased by 13.4%. For the entire year, revenue increased 2.7% from ₩333.5 billion ($255.5 million) in 2023 to ₩342.4 billion ($251.0 million) in 2024.

Despite bouncing back with a ₩2.4 billion ($1.7 million) operating profit in the fourth quarter, Pearl Abyss suffered an operating loss of ₩12.1 billion ($8.8 million) for 2024. This is the second year in a row the company posted an operating loss, as the South Korean game studio posted a 16.4 billion ($12.4 million) loss in 2023.

Pearl Abyss did post a net profit of ₩61 billion ($44 million) in 2024, thanks in large part to a ₩46.8 billion ($33.5 million) net profit in the final quarter of the year. While I wondered how the company made a ₩46.8 billion net profit on ₩95.7 billion in revenue, an analyst brought up a different question. Pearl Abyss claimed ₩53.3 billion ($38.1 million) in financial income but only ₩46.8 billion in net profit. The analyst was told the amount came from FX (foreign exchange) gains for Q4 plus a revaulation of some of the company's assets. All told game revenue only made up 59.4% of Pearl Abyss' income in the fourth quarter. I was left wondering if not for the weakening of the South Korean won would the company have recorded a second straight year of losing money.

A bigger surprise on the call was Pearl Abyss changing the way it reports revenue. No longer is game revenue broken down between the Black Desert and EVE franchises. Instead, the revenue is broken down between game and non-game (Pearl Abyss Capital) revenue. When asked by an analyst for a breakdown between the Black Desert and EVE game revenue, the reply was the breakdown was similar to the 3rd quarter numbers. 

I believe this marks a point where Black Desert revenues, even with the launch of Black Desert Online in China last quarter, are so poor the company's leadership has decided to hide the numbers. The leading reason I believe Black Desert is doing poorly financially is the failure of the Pearl Abyss leadership to tout a successful entry into the Chinese market. At the same time CCP Games not only launched an EVE Online expansion, but a new mobile game, EVE Galaxy Conquest as well. Noticeably, Galaxy Conquest was not mentioned once.

One game under development mentioned on the call was EVE Frontier. I don't know if there was a problem with the translation but apparently the blockchain-based game "is in its last stages of completion." I think when a transcription of the call is provided the wording may change. If not, Pearl Abyss really buried the lede.

Finally, the subject of Crimson Desert. Pearl Abyss confirmed on the call that "late 2025" means the fourth quarter. Still, I think at least one analyst was skeptical. Another wanted to know how many devs were working on the next scheduled game, DokeV. Pearl Abyss replied that all resources were working on completing Crimson Desert but that DokeV shouldn't take that long afterwards to publish.

A note about currency conversions.

All currency conversions in this blog post were performed using the rates displayed on the Federal Reserve Bank of St. Louis website using the average quarterly exchange rate. As a check on the accuracy of the methodology, I compared the revenue amounts listed on the quarterly investment calls of 2023 with the actual figure from the tax filings released by the Icelandic taxing authority. For 2023 I came up with revenues of $55,865,000 and the actual game revenue reported to the Icelandic government was $55,735,000. The difference was 0.2% more, in case the accuracy of the methodology is a concern.

A Look At The Active ISK Delta In January 2025

Today CCP Games published the January 2025 monthly economic report for EVE Online. The developers included some interesting analysis about the activity in the New Eden economy.

Economic Summary

• The mining value saw a significant increase in January, with an average daily rise of 24.8% compared to December. Meanwhile, production value experienced an uptick of 1.3%, and destruction value remained steady since September 2024.
  
  
• Both ore mining and gas harvesting volumes grew in January, increasing by 7.6% and 9.2%, respectively. In contrast, ice mining volume dropped by 25.4%, attributed to the conclusion of the Winter Nexus event and Volatile Ice Storms not being available for most of January.
  
  
• The end of Winter Nexus also led to a decline in Overseer Personal Effects.
  
  
• The MPI rose by 7.7% compared to December (a 32.8% year-over-year increase), driven primarily by a sharp rise in Morphite prices during the first half of January.
  
  
• Module and ship prices have continued to rise since October, showing year-over-year growth of 3.6% and 1.5%, respectively.

Over the last year or two I've stuck to looking at the money supply. In January, the money supply declined by 0.3%. Coincidently, the average price of PLEX in The Forge, home of Jita, New Eden's primary trade hub, also declined by 0.3% from the last day of December to the last day of January. And the biggest ISK sink keeping the growth of the money supply in check last month is known as the Active ISK Delta.

The Active ISK Delta is the net effect on the New Eden monetary supply of players leaving and returning to the game. The Active ISK Delta also includes any reductions due to any and all GM actions. In January, 69.0 trillion ISK left the economy from the movement of players into and out of the game. The change made the Active ISK Delta the biggest ISK sink in the New Eden economy for the third month in a row, nearly doubling the 35.3 trillion ISK removed from the economy through transaction taxes. 

All told, the net effect of player movement removed 2.8% of the ISK in the economy from the game. The amount was 4.7 trillion ISK more ISK removed than in December 2024. To put the amount into perspective, using the average price of PLEX at the end of January, the Active ISK Delta  was enough to purchase 23,000 months of Omega (aka subscription) time. Or, in other words, slightly more than the average number of concurrent users logged in over the past week.

Speaking of context the above graph opened my eyes to the need to adjust how I analyze the size of the Active ISK Delta. Over short periods of time, reporting on raw ISK numbers works fairly well. But from the beginning of 2018 to the beginning of 2025, the money supply grew 114.2%, from 1,139.8 billion ISK to 2,441.3 billion ISK. In comparison, over the same time the price of a single PLEX rose from 3.2 million ISK to 6 million ISK, an 87.5% increase. So yes, the Active ISK Delta recorded 50% more ISK removed in January 2025 than occurred in January 2018. But compared to the size of the money supply, 3.5% of the money in the game left with players in January 2018 compared to the 2.8% disappearing last month.

I know that a lot of people are stating January's Active ISK Delta is an indication of a lot of people leaving the game. And just based on instinct I want to agree. But the Active ISK Delta shows a lot of ISK leaving the game over the past six months or so with player levels remaining fairly constant. Staying at a plateau isn't really a great situation. Preferably player logins and activity would increase, which I don't see. But one thing I do see is a need to look at the metric is a slightly different way.

A Look At EVE Online Activity In January 2025

While we won't know the results until next week, EVE Online looks like the game did quite well in 2024. But in the video game business, especially in MMORPG's, one cannot rest on one's laurels. So while some games struggle to figure out how they did in 2023, observers of EVE are already looking at the initial data for January 2025. So, what's the situation in New Eden?

Jester's graph from 1 Feb 2024 to 31 Jan 2025

Just looking at concurrency the Revenant expansion is not performing well. The 7-day moving average of concurrently logged in accounts actually dipped below 22,000, or below that logging in right before the Havoc expansion in November 2023. If concurrency falls below 21,000 before the hype for the summer expansion hits, 2025 might prove a down year for EVE Online, if not for CCP Games in general.

Dotlan Data - Month over Month comparison

High sec, especially in Uitra, continues to do high sec things where player ship losses are concerned. I did raise my eyebrows as January saw an 8% increase in the number of NPCs dying at the hands of players in the security band. Honestly, in the wake of the conclusion of the Winter Nexus event, I expected the number of NPCs killed to go down.

Low security space dropped a little bit in both player and AI explosions. NPC losses don't necessarily signify much by themselves. The drop in player ship losses amounted to 200 less per day, not too worrying an amount as long as players continue to lose over 200,000 ships per month in low sec.

We do see the effects of the Great Reset in null security space with an 11.8% increase in player ships exploding. The continued decline of rats dying is a troubling trend if it continues, but a 1.3% decline month-over-month decline doesn't really shout out an alarm.

Dotlan Data - Year over Year comparison

When looking at year-over-year data, PvE activity in the form of NPCs exploding fell across all security bands. The 14.9% decline in high security space is not offset by increases in other areas. And the number of player ships exploding outside high sec doesn't suggest rising activity either. The drop of 30,000 ships exploding in low sec in January 2024 was only partially offset by the increase of 19,000 in null security space. Perhaps a mass migration occurred into either wormholds or Pochven, but I'm skeptical.

For 2025 I'm going to switch from looking at long-term low sec trends to null sec as the past two expansions seemed to concentrate on that security band. January 2025 continued a streak of 11 months in a row, and 15 out of 16 months of having more than 250,000 player-owned ships explode in null sec. The only exception is February 2024, and the loss rate was such that the month would have exceeded 250,000 if the month contained 30 days. The streak started one month before the launch of Havoc in November 2023.

While player ship losses have trended upwards since the start of the Second Expansion Era in November 2022, NPC deaths have declined since peaking at 218.3 million in June 2024. Null sec did see seven consecutive months of players killing over 200,000 rats from April 2024 to October 2024 but the numbers have remained between 190,000 and 200,000 for the past three months. Whether the developers are happy with that number is hard to determine, but does it indicate dissatisfaction with the most recent expansion Revenant?

As I mentioned at the top of the post, we won't know the financial impact of the latest expansion until next week's investor call. But unlike some game companies that make internet spaceships who have trouble submitting financial accounts from 2023, we here following EVE are ready to begin moving into 2025.

More Management Updates At Cloud Imperium Games: Chin, Franz, And Zurovec

The management changes at Cloud Imperium Games continue with a new name added to the conversation. Someone on the Star Citizen sub-Reddit noticed a change on the company's About page. But when I heard the news I saw not one, but three changes as two people have been dropped from the page in the last week.

Here is the update since the About page was last archived on 30 January.

Elliot Chin - According to his LinkedIn page, Chin is still the Chief Marketing Officer for Cloud Imperium. Back in December Insider Gaming reported an office rumor that Sandi Gardiner was returning to CIG to take over her old role. The rumors started swirling further when Bored Gamer received information indicating Chin was one of three executives with a combined 25 years experience at CIG being moved out of the company. With his removal from the leadership page on the corporate website, the possibility grows a little more realistic.

Dr. Martin Franz - Cloud Imperium's chief legal officer, Franz came into notice when UK Companies House posted he had resigned from his position as the corporate secretary. At that point the question arose whether Dr. Franz was stepping down from what has become a thankless position over the last two years or was something bigger. CIG removing him from the leadership page hints at something bigger.

Tony Zurovec - Perhaps the biggest name on this list, last week the developer known as "Tony Z" was listed as the Persistent Universe Game Director. On the current version of the About page, he's listed as Game Director Emeritus, indicating he is no longer involved in day-to-day operations at CIG. 

Zurovec was best known to myself as the developer in charge of developing Star Citizen's (and presumably Squadron 42's) economic system and gameplay. At last year's CitizenCon, the announcement of the vision of Star Citizen 1.0 seemed to indicate much of the work Zurovec had done was no longer relevant. His new title of Game Director Emeritus indicates his role, if any, in the future is purely advisory.

I did hear a rumor in a video that Zurovec is still present due to an ownership interest in Cloud Imperium. As far as I know that is not the case. Here is the current list of people with an ownership stake in CIG after stripping away the holding companies.

• Chris Roberts - 71.1%
  
• The Calders - 21.3%
• Keith Calder - 20.7%
• Clive Calder - 0.6%
  
• Erin Roberts - 4.7%
  
• Eli Klein - 2.4%
  
• Marc Deaudet - 0.2%
  
• Benoit Beausejour - 0.2%

Rooks And Kings Are In The EVE Frontier Alpha

If EVE Frontier wants to succeed, CCP Games needed to develop a good MMORPG that just happens to use blockchain technology, not some sort of crypto scam disguised as a video game. For many, any game utilizing blockchain technology is automatically a scam with no possibility of having a single redeeming quality. Those people are permanently lost as customers, probably dooming Frontier to niche game status as a ceiling. But can the developers make a game that hearkens back to EVE Online's first decade when the universe was open to exploration and kitchen sink fleets were the meta? Can Frontier attract some of the older players not bothered by the game's tech to come in and play with a new set of rules?

I was highly skeptical but I signed up for the alpha anyway, looking to see. And in an after action report written up by CCP Jötunn I found familiar names: Lord Maldoror and Rooks and Kings. For newer players Rooks and Kings were legends in the first decade of EVE, whose triage carrier and pipe bombing tactics were immortalized in the Clarion Call series. Below is the full pipe bombing sequence from the This is EVE trailer.

But more importantly for this post, Rooks and Kings are making noise in EVE Frontier. Below is CCP Jötunn's AAR on one battle in the alpha.

Battleship Clash in I.EXP.NJ7:

Rooks and Kings vs. Algorithmic Warfare
01.02.2025

In what has been described as the most significant battleship engagement to date in EVE: Frontier, the forces of Rooks and Kings (RnK) clashed with Algorithmic Warfare (AWAR) and their allies, Heavy Metal (HEAVY), in a fierce confrontation within the Trinary Accord capital system of I.EXP.NJ7.

The Build-Up to Conflict

For weeks, RnK had been conducting raids into AWAR territory, their skilled fleet maneuvering through contested space with impunity. This led to a decisive response from AWAR and HEAVY, culminating in a strategic engagement aimed at countering the growing threat.

“The engagement with RNK was something I was looking forward to,” said Ergod, the fleet commander of AWAR. “Although the circumstances of that encounter weren’t my choice, it just happened as I was FC’ing a mining fleet.”

What initially seemed like an ordinary mining operation quickly transformed into a full-scale defensive effort. AWAR forces had to rapidly pivot to battle readiness, calling in reinforcements and distributing last-minute modifications to ensure they could mount a formidable challenge. “I knew how badly we were outmatched, yet I threw that ping anyway,” Ergod reflected. “Without much expectation, soon after, pilots started hopping on voice, curious about the response.”

The Battle Unfolds

As AWAR and HEAVY prepared their fleet, a tactical bait was set in motion. Seven battleships and support craft from AWAR and HEAVY faced off against RnK’s fleet of five battleships and additional support.

“We send our first bait, a Grus,” Ergod recounted. “Tacklers warp in, but we were looking for the escalation. I undocked second as the bait… there they all warped in, in formation, magnificent sight.”

However, RnK anticipated the move. “Eldareth was able to steer his Grus beneath the enemy lines such that occlusion and cross-fire led to difficulties with damage application and friendly fire,” explained Lord Maldoror of RnK. This maneuver proved critical, forcing AWAR and HEAVY into a difficult firing position. The intensity of the exchange was evident as ships on both sides took heavy damage.

“With loud railguns blasting crazy damage from both sides, yet that Grus was good. It moved under, I knew the damage application was going to be superior,” Ergod acknowledged, recognizing the skill of RnK’s execution.

Turning Points and Tactical Withdrawals

As the battle raged on, the first major loss for AWAR was a battleship, a pivotal moment in the skirmish. In an ironic twist, the kill was credited to friendly fire within AWAR’s ranks. Meanwhile, three Caruda and another Grus from AWAR also fell under RnK’s precise targeting.

“The three remaining AWAR and HEAVY battleships of Vode, DakkanUdan, and Faeltagen escaped through a locked Smart Gate, where RnK could not directly follow,” detailed Lord Maldoror.

Rather than pressing for a total rout, RnK sought an alternative resolution. “After various attempts by RnK to encircle them, RnK’s John and AWAR’s Ergod spoke and arranged the safe return of the remaining three battleships,” Lord Maldoror revealed.

This level of mutual respect between adversaries is a breath of fresh air in the war-torn landscapes of EVE: Frontier. “Much respect for this group,” Ergod concluded. “It was all gf.”

Aftermath and Future Engagements

While AWAR suffered significant material losses, their fleet commander remained philosophical. “A pricey lesson, but to me, these battleships are a fair price. I am not emotional about the ships even if I FC’d and Co-FD’d ops to mine them.”

On the other side, RnK acknowledged the resilience and adaptability of their foes. “Both sides look forward to their use in future engagements,” said Lord Maldoror, signaling that the conflict between these rival forces is far from over.

This historic battle not only showcased the evolving strategies and counterplays between some of the most formidable fleets in the game, but also set the stage for future engagements that will undoubtedly shape the balance of power on the Frontier.

I'm Going To EVE Online's Fanfest 2025

Have I really gone 7 years without visiting Iceland? I had a stretch of attending EVE Online's Fanfest event in Reykjavik every year from 2012 to 2018. In 2019 the event wasn't held (I blame the acquisition by Pearl Abyss) and in 2020 the COVID pandemic cancelled everything. But 5 years after having my last trip cancelled, I'm going back.

I want to assure everyone I am not some sort of architecture snob. Sure, my first year of attending Fanfest in Reykjavik was the first year CCP held the event in Harpa, the futuristic concert hall and convention center near Iceland's military harbor. And yes, Fanfest returns to Harpa this year for the first time since 2018. But that is merely a coincidence.

Booking my flight to Keflavík International has also changed. Back in 2012 I kind of fumbled around as no direct flights existed between Chicago and Keflavik. By 2018 IcelandAir had a direct flight running three times a week between the two locations. Advance to the current day and I had my pick of two flights. Seven years later I'm finally crossing off an item on my bucket list: flying Saga Class. I have the feeling the experience is more like business class than first class, but I had a lot of points on my main credit card so I splurged.

One piece of the trip I'm looking forward to, believe it or not, is the bus ride from the airport to the bus terminal in Reykjavik. On my first trip the landscape was like nothing I had ever seen before. I think I compared the experience to travelling in a video game. I want to see how much development on the island has changed the landscape. Also, I want to see how much technology has changed on the buses. Is the bus wifi any better?

I'm taking advantage of the additional flight and instead of arriving at Kefkavik at 6:35am I'll land at 9:20am. For those who haven't travelled to Iceland before, that's huge. Hotel check-in is usually around 2pm, but for travelers arriving from the airport around 9am they usually have an early check-in option which included breakfast. Those who chose not to ask for the option get to wait around the hotel lobby for hours. With the later arrival, I can drop off my bags, grab some lunch, and then check in.

When looking for a hotel, my first thought was the Center Hotels Plaza, the hotel I stayed in my first trip to Fanfest. Sure, the water smelled like sulfer and the wifi was spotty. I was curious how much the place had changed over the previous 13 years.  But then I discovered another hotel that not only was cheaper but located closer to Harpa: Center Hotels Arnarhvoll.

Center Hotels Arnarhvoll is a newer hotel, I believe built in 2016. Did I mention the hotel is across the street from Harpa? I remember seeing the hotel and thinking how convenient staying across the street would be. Going back to my room to take a break would take 5 minutes depending on how fast the elevators work. The hotel is a little bit farther away from the main shopping area but I can use the exercise.

I am arriving a couple of days early in order to look around and see how much has changed. Back in 2018 the area around Harpa was littered in construction cranes. I also want to see if any of the bars I used to frequent survived the COVID lockdowns of 2020, although I hear Iceland's measures weren't as strict as many places.

The trip to Iceland, my eighth, is my first bit of travel since the pandemic of 2020. Honestly, I'm looking forward to getting away from home for a week. Fanfest was always an event that rejuvenated by desire to play EVE Online. Perhaps I'll want to play for more than 45 minutes a night when I get to meet up with other internet spaceship nerds.