Friday, September 7, 2018

CCP Games Sold To Pearl Abyss

The long march is almost over. From the death of Harry Weller in November 2016, the first trial balloon in December 2016, the announcement of no Fanfest in the Harpa in 2019 in April, and the sale of the Newcastle studio and move away from virtual reality games in November 2017, the signs were present. Yesterday, CCP turned rumor into fact. Crowd Control Productions is no longer an independent games studio:
SEOUL - September 6, 2018 - Today, Black Desert Online developer Pearl Abyss announced that it will acquire CCP Games, the creators of popular spaceship MMORPG EVE Online. The deal outlines that CCP Games will continue to operate independently as a developer with studios in Reykjavik, London and Shanghai, while integrating the company’s extensive development and publishing expertise into Pearl Abyss’ operations for all current and future projects.

EVE Online is a space-based, persistent world MMO game, developed by CCP’s Reykjavik studio. The game first launched in 2003 and has since gained recognition for its scale and complexity with regards to player interactions in EVE’s single, shared game world. EVE Online is one of the most critically-acclaimed MMORPG intellectual properties (IPs) in North America and Europe, and one of the most extensive works of science fiction in the world.

Pearl Abyss CEO Robin Jung stated, “We are thrilled to have CCP Games join our team as Black Desert Online continues to branch out globally. CCP is a seasoned publisher with over 15 years of digital distribution experience and know-how. They have done an incredible job of engaging and maintaining their playerbase, which we aim to learn from and hope to integrate natively into Pearl Abyss’ general practices across all our games. I am confident CCP’s reputable IP and expertise in global publishing will help reaffirm our company’s dedication to developing and servicing the world’s best MMORPGs.”

“I have been seriously impressed with what Pearl Abyss has achieved ever since I first visited their website for Black Desert Online and subsequently became an avid player of the game,” said CCP Games CEO Hilmar Veigar Pétursson. “Pearl Abyss is a fast-growing company with lots to offer in terms of technology, capability and vision. I believe our two companies have a lot to learn from each other. We are very excited to join forces with them and achieve great new heights for our companies, our games and – above all - our players.”

Birgir Már Ragnarsson of Novator Partners and Chairman of CCP commented, “As lead investor in CCP for over 13 years alongside General Catalyst and NEA, we’ve seen CCP go from being a few dozen people strong to employing hundreds all over the world, with an ever-increasing customer base and multiple titles. CEO Hilmar V. Pétursson and his dedicated team have built a company that Novator and its partners are proud to hand over to Pearl Abyss and we wish them the best of luck in their future ventures.”

Pearl Abyss first launched its open-world MMORPG, Black Desert Online, in Korea in 2014. The game has received critical acclaim for its advanced graphics, seamless world, large-scale castle sieges and action-based combat system. Since Pearl Abyss’ initial public offering in 2017, the company has worked to secure competitive global IPs, such as EVE Online, through strategic investments and M&A activity.

Pearl Abyss saw record-high sales in the first half of 2018, following the launch of Black Desert Mobile in Korea. The company is looking forward to another strong year in 2019 with EVE Online and the upcoming global launch of Black Desert Mobile.

Deutsche Bank is acting as financial advisor to Pearl Abyss, and Kim & Chang is providing legal counsel. The Raine Group is acting as financial advisor to CCP Games, and White & Case LLP and LOGOS are providing legal counsel.
For some reason, people wonder about my thoughts on the subject. I gave some of them on an impromptu show Matterall ran yesterday, but I should probably give a hot take on the blog.

First, I think a lot of people are worried about Pearl Abyss introducing pay-to-win elements to EVE Online. I've heard others assure people that Pearl Abyss has done their due diligence and know that the EVE player base would never stand for that. The purveyors of that line of thinking point to the Summer of Rage as proof. My thought is that Monoclegate was 7 years ago and the EVE player base's attitudes toward paying for advantage (or convenience) has changed drastically over that time. Pearl Abyss probably did their research, saw that EVE players gladly accept things like paying real world cash for ISK and skill points, and thought, we can do business here. That said, I think as long as CCP meets certain financial goals, Pearl Abyss will not meddle with EVE Online. Besides, EVE Online, at least the game, is not a top reason Pearl Abyss purchased CCP.

Personally, I think one of the big attractions is CCP's upcoming games, the first person shooter Project Nova and the mobile games Project Aurora (developed by PlayRaven) and Project Galaxy (developed by NetEase). Pearl Abyss is basically buying three new games without having to pay much of the development costs. I think the mobile games are a big draw for the South Korean company, as Pearl Abyss ported its flagship game Black Desert Online to mobile devices on 28 February of this year in Korea and will introduce the mobile game in the west sometime in Q1 of 2019. Given the success of Black Desert Mobile in South Korea, Pearl Abyss is probably anticipating similar success with mobile games set in the EVE Online universe.

The other outstanding reason for Pearl Abyss to purchase CCP Games is one most western players will overlook: access to the Chinese market. In addition to working with CCP to develop Project Galaxy, Netease will take over running EVE Online's Serenity server in October. CCP's long history of working in China not only helps in navigating the laws concerning foreign-owned games, but may help in avoiding the ban on new South Korean mobile games entering the Chinese market. Iceland, on the other hand, is a country with which the People's Republic wants to have good relations. In fact, China and Iceland signed a $250 million deal in March to provide China with geothermal technology. At this point in time, an Icelandic game studio probably has an advantage over a South Korean company in accessing the lucrative Chinese mobile gaming market.

Those are my initial thoughts on the sale. I tried not to speculate too much and hopefully following the links may prove as interesting as this post. The sale should be final on 12 October, one week before the start of EVE Vegas. I'm going to the event again this year and I'll have my pen & paper out again taking notes at what should prove a very interesting keynote address.

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