Monday, March 1, 2021

Cultural Elements

From Pearl Abyss Q4 2020 Earnings Call

The last two weeks hasn't been filled with good news for Pearl Abyss. On 16 February, the company announced an 8.8% operating revenue decline in 2020. Worse, revenue generated by the Black Desert IP declined by 14% year-over-year as well. On 25 February, the switchover of the publishing of Black Desert Online from Kakao Games to Pearl Abyss did not go smoothly, resulting in additional item givaways. Also on Friday, news came out of Iceland that CCP Games failed to achieve any of the targets designated in the sale to Pearl Abyss to earn any bonuses to add onto the price tag of $225 million.

Hot on the heels of all the bad news came the news article about Expert Systems

Brand new Expert Systems will be coming to EVE Online in the near future! They are designed to help rookie Capsuleers discover and experience new activities by providing specific virtual skills and skill levels for a limited time that cannot be extracted through the use of Skill Extractors. For a one-week period per Expert System, Capsuleers will be able to taste the dream of a particular profession in EVE without having to commit to the skill training required by that path of progression and waiting for it to complete...

Once an Expert System expires, access to the temporary skills and levels provided will be removed and Capsuleers would need to either extend their access through a repeat Expert System purchase or train the skills themselves. Given the potential repeat costs, it is more beneficial in the long run to train the skills permanently, rather than continue to purchase the same Expert Systems.

This upcoming feature reminded me of my time in Black Desert Online. In BDO, Pearl Abyss would offer quality of life as well as pay-to-win features for seven days. At the end of the seven days, the player would then hopefully miss the feature so much they would go to the cash shop and purchase the feature permanently. 

If Pearl Abyss inspired the feature, Expert Systems would not be the first time Pearl Abyss played a part in EVE Online development. In addition to the introduction of a Korean-language client in November 2019, Pearl Abyss publicly declared they were involved in restoring player counts in on the Q1 2020 earnings call.

EVE Online is also maintaining stable performance. EVE Online -- which was known as the most difficult MMO game -- had the most important challenge, which was to motivate the interest of early users. Using Black Desert know-how and experience from EVE Online, many improvements were made. And accordingly, we saw a meaningful increase of new users. EVE Online, which is in its 17th year of launching, shows through many indexes that a well-made MMO game has a very long lifespan value.

The statement, along with a 25% reduction in previously reported revenue in Q4 2019, is the closest Pearl Abyss came to acknowledging the harmful effects of Blackout on the company's finances. In the wake of the news, a new set of value packs, which included skill points, was introduced to the cash shop on 28 January 2020. Also, the developers introduced a new set of login rewards in mid-April 2020. The rewards were somewhat underwhelming, with many short-term boosters and limited-time temporary ship SKINs. Almost as if the purpose was to encourage players to go out and purchase permanent versions. Sound familiar?

Besides similarities to Black Desert Online, why would one think the Expert Systems feature was inspired by the higher-ups in Anyang? Because of one of the 2021 goals stated on the Q4 2020 earnings call. Pearl Abyss leadership revealed that PA plans to expand the EVE IP into Asia this year. December's introduction of a new Japanese client is part of that effort. 

Knowing PA's goals for EVE, I think I know the meaning of a phrase in the Q4 earnings call presentation that has puzzled some readers. What does "Cultural elements" mean? I believe the phrase indicates putting in features that appeals to Asian players, even if Western players will look askance at them. Applying that understanding makes the creation of Expert Systems more understandable.

The important question to ask is, "Do Asian players expect to have the ability to try out a feature before buying it?" The answer could take many forms. For example, perhaps knowing what is possible could influence a player to buy Omega time in order to double the training speed. Or trying out a ship the player could otherwise not fly could encourage the purchase of PLEX in order to buy skill injectors off the market.

I will add one additional possibility I know a lot of Western EVE players will hate. Pearl Abyss could create new sets of ship packs, with the rent-a-skill packages allowing players to try out particular ships. If I am correct about how Asian players look at video games, the Expert Systems, combined with various ship packs, could result in higher retention of Asian players.

I think the bottom line on the Expert Systems system is ... Pearl Abyss' bottom line. Black Desert revenue is declining and Crimson Desert is not scheduled for launch until the last quarter of 2021. All parts of Pearl Abyss need to try to keep revenue stable, including the EVE universe. The only big revenue increase in sight is the launch of EVE Echoes in China sometime in the second quarter. But that won't stem the tide. EVE Online needs to increase revenue as well, and the Expert Systems feature will play a big part of that.

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