Monday, August 31, 2020

FFXIV - I Hit The Cactpot

When I'm not digging through EVE Online's monthly economic report, I like to play Final Fantasy XIV. One of the things I do every day is visit the Manderville Gold Saucer. I have to play the mini-cactpot and do either one of the "Leap of Faith" jumping puzzles or "Air Force One" on-rails shooter to start my play session.

The Manderville Gold Saucer, for those who don't play FFXIV, is a very patron friendly casino. Basically, a player would have to work really hard to lose their money. In order to make sure a player doesn't gamble away all his gil, players use a secondary currency called the MGP, or Manderville Gold Saucer Points. Think of the MGP as chips. And players cannot buy MGP if they have over 500 MGP in their possession.

The big game in the Gold Saucer is the Jumbo Cactpot. The game is simple. Players choose a number between 0000 and 9999. Players can purchase up to three tickets per week, with each ticket costing 50 MGP more than the previous. So for three tickets, the cost is 450 MGP. The ultimate prize is over 1 million MGP, with drawings held every Saturday.

Remember how I stated the Gold Saucer is very patron friendly. By buying 3 tickets, the minimum payout a player can receive is 3702 MGP. Is a game really gambling if you can't lose? So, since I can't lose, I play every every week.

And on Saturday, I did it. I hit the Jumbo Cactpot.

Winning the Cactpot, with the free company bonus included

My free company runs the Gold Saucer buff on Saturdays for just such occasions. Including the 10% buff, I received 1.2 million MGP. I already had over 1.2 million MGP from just rolling into the Gold Saucer and not spending any money. At the end of the day yesterday, I was up to 2.5 million MGP.

I now have enough money to buy anything the Gold Saucer has to offer. I already own the two most expensive mounts, so if I wanted to, I could pick up at least three more mounts. But I have a different plan. I'm certain that with the next expansion will come a new selection of goods for the Gold Saucer, including a new mount. So I intend to keep saving up my MGP for the next expansion to buy the new mount on day 1. I've never been rich enough in a game to do anything like that before. 

Tuesday, August 18, 2020

Putting EVE Online's First Half Of 2020 Numbers In Perspective

Last week's Pearl Abyss earnings call was good news for CCP Games. The Korean game company disclosed to analysts that the EVE intellectual property brought in $16 million USD (₩18.9 billion) in the second quarter and $28 million for the first half of 2020. But the numbers themselves don't tell an interesting story unless put into some sort of context.

From Pearl Abyss Q2 2020 Earnings Call, 13 August 2020

EVE's financial performance so far in 2020 is similar to that in 2015. Five years ago, CCP reported $58.6 million in game sales, which would have included revenue from DUST 514. If the Tranquility server maintains current activity and with two full quarters of revenue from China, EVE Online could conceivably exceed $60 million in sales this year.

While on the subject of CCP's financial history, perhaps a look at 2016, the last year we have a financial report before Pearl Abyss acquired the Icelandic company, is in order. In 2016, CCP received $81 million in game revenue as the company released two virtual reality games for the PC and PS4, EVE: Valkyrie and EVE: Gunjack. The EVE IP will probably not make that much this year, as EVE: Echoes was only released last week and still does not have a license to operate in China. But 2021 looks like the year the Icelandic studio could reach new financial highs.

But a historical context often isn't sexy. So let's compare CCP's income to a competitor that also made news last week. That's right, the fundraising giant Cloud Imperium Games and Star Citizen.

Star Citizen Funding Page As Seen On 18 August 2020 at 2330 UTC

On the same day Pearl Abyss held its earnings call for the second quarter of 2020, MassivelyOP published an article noting that Cloud Imperial Games had surpassed its fundraising total from 2019 of $47.7 million. As of the time of publication of this post, CIG has raised over $49 million this year, not including other sources of income like subscriptions. So unless EVE: Echoes does incredibly well over the next 4 1/2 months, Cloud Imperial Games with two games in alpha will exceed the revenue of the games under the EVE IP in 2020.

Okay, comparing EVE and Star Citizen is a bit of fun. The serious analysis involves how well CCP's games perform compared to what Pearl Abyss thought it was buying in 2018. CCP and EVE started off slow due to licensing issues for the Serenity cluster in China. But the intellectual property is growing now that EVE Online has access to China again. If CCP can continue revenue growth, then I think a lot of people, including players, will wind up rejoicing. We just need to know what positive revenue growth looks like.

Thursday, August 13, 2020

Pearl Abyss Q2 2020 Earnings Call

Pearl Abyss held its Q2 2020 earnings presentation for investors yesterday. The main item that struck me was the declining financial numbers the Korean game company posted during a quarter expected to produce higher numbers due to the COVID-19 pandemic. Instead, PA experienced a 1.1% quarter over quarter and 8.4% year over year declines in the second quarter.

Operating profits grew 9.5% from the previous quarter, but still fell 2.3% from Q2 2019. The big decline was in Pearl Abyss' net profits, which declined ₩24.7 billion, or 51.5%, from the first quarter. Pearl Abyss did not explain the reason for the drop in net profits, although a tax hit is not out of the question. We do know that increased operating costs were not the reason for the decline in net profits. Labor costs fell 3.6% as the COVID-19 pandemic inhibited the hiring of new employees.

Eagle eyed individuals may have noticed that the totals for 2019 changed from that disclosed in the Q1 2020 call. Pearl Abyss explained this was due to the accounting changes explained in the Q4 2019 call. The change was required to fall in line with the industry's standard practices.

The source of the revenue drop was Black Desert, specifically Black Desert Mobile. While Pearl Abyss does not break out individual games, the Black Desert IP experienced a ₩7.1 billion ($6 million USD) drop in revenues in the second quarter. The BDM decrease also showed up in the percentage of revenue by platform, with mobile games making up only 43% of PA's sales in Q2 compared to 54% in the first quarter. But all was not bad news for Black Desert. On 24 April, PA began self-publishing the game in Japan, achieving the highest peak concurrent user mark in BDO's 5-year history in the country.

Partially making up for the drop was EVE Online. The game experienced a 31.9% increase in revenue QoQ and a 26.8% increase compared to Q2 2019. The $3.9 million increase brought the total EVE IP revenue up to $16 million for the quarter. While Pearl Abyss credited efforts to shore up the player base as a leading cause of the increase, I would credit both the lockdowns associated with the CONVID-19 pandemic as well as the relaunch of EVE in China on 27 April as larger factors.

Concurrency on Serenity (China), August 5-12, 2020

The EVE IP could provide a bright spot in Q3 as well. EVE Echoes launches globally today, except for China. In response to analysts' questions, Pearl Abyss revealed that the company does not have a launch date for the game in China as CCP/Netease is still trying to get a license.

Overall, Pearl Abyss came out of the call looking good, with the company's stock price jumping 5.8% in morning trading. The market consensus of a ₩37.3 billion operating profit was smashed by the ₩50.1 revealed on the call.

Monday, August 10, 2020

FFXIV Patch 5.3: Expanding The Free Trial

Today Final Fantasy XIV is off-line as Square Enix installs patch 5.3 on the servers. But instead of going into a lot of details about the release, I want to point out the business end of the changes to the game. The FFXIV trial is extending from level 35 to level 60. At the same time, the standard game will now include the Heavensward expansion, which has a level cap of 60.

The expansion of the trial to include the ability to play the Heavensward expansion doesn't, at least in my mind, count as turning FFXIV into some sort of free-to-play or hybrid business model. Square Enix still bans the purchase of items from the cash shop, meaning the only way the company can monetize trial players is to turn them into subscribers. The full list of trial restrictions is below...
  • Free Trial Players cannot make in-game micro transactions during the Free Trial.
  • Free Trial Players can create only eight (8) playable characters, restricted to one (1) playable character per world.
  • Free Trial account characters have their level capped at level thirty five (35).
  • Free Trial account characters can obtain only a capped amount of in game currency (GIL).
  • Free Trial Players cannot use the "shout", "yell" or "tell" in-game chat options during the Free Trial.
  • Free Trial Players cannot access the in-game market board during the Free Trial.
  • Free Trial Players cannot trade items with other players during the Free Trial.
  • Free Trial Players cannot use the Mogletter service during the Free Trial.
  • Free Trial Players cannot hire a retainer character during the Free Trial.
  • Free Trial Players can join a Linkshell if invited, but cannot create a new Linkshell during the Free Trial.
  • Free Trial Players cannot create or join a Free Company during the Free Trial.
  • Free Trial Players can join a party if invited or by using the Duty Finder, but cannot assemble a party during the Free Trial.
  • Free Trial Players cannot login to the Lodestone and or any other game forum during the Free Trial.
  • Free Trial Players cannot progress past Floor 10 in the Deep Dungeon during the Free Trial.
The 8 character limit shouldn't serve as a problem trying out classes (aka jobs) as a character can have all combat jobs, gathering and crafting classes trained. The bigger restrictions for anyone wanting to play the entire story line for free are the inability to trade with other players or use the market board. Not having the ability to upgrade equipment, especially in the Heavensward content which relies on flying mounts, via the market is big for running the dungeons that are a part of the main scenario quest line. Gathering materials for crafting in levels 50-60 is kind of difficult without the ability to fly.

As the change to the trial is part of an effort to attract players to the game, I should add in a couple of things patch 5.3 brings to FFXIV to make the game more player-friendly. First is the revamp of the 100 quests that were introduced in the patches to A Realm Reborn. Not only were many removed altogether, but more were streamlined to feel less grindy. Also, players can now fly in the old 1-50 level zones (except in cities) in the old ARR content. 

Of interest to newer players, treasure chests in dungeons will no longer drop basically useless items, thus filling up valuable inventory space better reserved for armor and weapons. Especially important for trial players, several of the lower level dungeons will now guarantee players a drop applicable to their combat jobs as long as the player does not possess any of the items. With no access to the market board, the better quality items found in dungeons can help players gear up.

Having completed the Heavensward story and run the Crystal Palace quest line and raids, I fully agree with the take that Final Fantasy XIV is the best MMORPG on the market today. But, I can see how the anime type art style (I'm not really sure FFXIV is an anime game) and forced grouping could turn some people off. If anyone wanted to try the game, the introduction of the new unlimited trial is a good time to start.

Tuesday, August 4, 2020

Summer War 2020: We Were Promised Explosions

The big summer war of 2020 began 4 weeks ago. We've seen coverage of the war on talk shows and Twitch streams. The EVE Online sub-reddit is full of propaganda. The growing number of systems with Pandemic Horde infrastructure hubs in Fountain and Brave Collective iHubs in Querious mark the progress of PanFam and the Legacy Coalition towards The Imperium's home region of Delve. But the question remains. Where are the ship explosions?

In July, null sec witnessed an average of 10,358 ships explode for various reasons. But despite the start of the war late on 4 July, the total was down from June's average of 10,421 ships lost per day. One cannot explain the slight decrease as a lot less of a decrease than normal, either. The 0.6% drop in wreck creation in 2020 is slightly below the average change from June to July from 2016-2018 of 0.0%. That's right. In EVE's free-to-play, non-Blackout history, null sec averages no decline at the beginning of summer (winter in Australia/New Zealand). In other words, the war is not providing an increase in ship wrecks.

On the ratting front, major wars have two contradictory influences. On the one hand, major conflicts can interfere with ratting, especially if the sides decide to declare total war on each other's rear areas. But, alliances have an incentive to increase ratting in order to improve their systems' activity defense modifiers. In July, null sec saw a 4.1% decrease of NPCs killed, down to 6,200,252 rats per day. The decline, though is in line with the 2016-2018 average decline in NPC kills of 7.5%. Once again, seemingly the "World War" is not affecting all of null sec.

Just looking at the data available on Dotlan, the current war reminds me of the fighting a few years ago in factional warfare. The participants were all happy and thought the action had picked up tremendously. But in reality, all the players gathered to a few points to make the game feel busy.

Is the same thing happening today in null sec? Perhaps not. We still haven't seen the big toys gather to have a critical battle or two. Also, we haven't seen the July monthly economic report yet. The Dotlan data can give a first impression but more is needed. The maps show the fighting is spread out over regions. But how deep is the war? How many ships involved? What are the resources devoted to the conflict? Or, potentially, the resources available to wage the war. But for now, the level of fighting seems not out of line with the normal state of null sec.