Final Fantasy XIV's Naoki Yoshida On NFTs

On Friday, Final Fantasy XIV's producer and director Naoki Yoshida (aka YoshiP) hosted the 68th Producer Live Letter. Before the actual stream, the technical staff conducted some testing, during which Yoshida told a story about an interview with a Japanese business publication. Anyone following my coverage of Pearl Abyss earnings calls can guess the subject. That's right, the metaverse. The lack of NFTs was a surprise.

Of course, Twitch chat was opposed to the idea of NFTs in Final Fantasy XIV. But what about Yoshida? I figured I'd transcribe what I see on YouTube. The first quote directly relates to the interview and starts at 25:16.

We're hearing things. We're seeing the comments in Twitch saying, "No NFTs! No NFTs!" But just wanted to clarify like NFTs and the metaverse are like unrelated to each other. And what we're discussing here [the metaverse] is a bit more interesting that that.

There's no way we are going to be including -- we're not going to be including NFTs in 14. So please, I think we can drop the subject. We need to calm down a little bit.

A few minutes later, Yoshida returned to the subject (at 30:58 of the video).

We did notice a lot of reactions from, especially from the western users about the NFTs. Many comments about how you are opposed to NFTs. I do understand that our CEO Matsuda had commented on the concept of NFT in his New Years greetings, in his messaging. There may be a bit of sensitivity, a little bit of nervousness happening around the topic.  

I did mention it earlier but basically how Final Fantasy XIV is designed, we don't intend on incorporating any sort of NFT element in the game at this point. So if anybody is worried or concerned about it, I can clearly state at this time we do not have any intentions to incorporate that into the game. 

But looking at how people are reacting to the subject matter, there also seems to be a good amount of people who may have misconstrued that this is something like a mining effort that is something you are digging up. And there might be some misconception of what exactly an NFT is. 

If there is an opportunity to speak to the subject of NFTs in an interview that is completely unrelated to Final Fantasy XIV. Because it is an opportunity for a new business model and I do believe that the vehicle itself could potentially be something that makes the concept of a video game a little bit more interesting. But that being said, we would need a specific game design that would accommodate for that concept of NFTs. So if there ever is an opportunity to go into it in deeper detail I would  like to talk about it. There's a potential of utilizing it without going in a wrong direction or a bad direction. 

With any sort of video game, I think before we even talk about the financials or monetary discussions, we need to make sure the game itself is fun. Are there fans of the game? That is a very important piece that we need to keep in mind with games. 

Again, no NFTs in FFXIV so don't worry. 

Honestly, I'd rather write about happier topics like the renewal of the free trial of Final Fantasy tomorrow. Did you know starting tomorrow, you can play through the entirety of A Realm Reborn and the award-winning Heavensward expansion up to level 60 for FREE with no restrictions on play time? Or course, for those wishing for a more solo-friendly experience, they might want to wait until patch 6.1 drops sometime in April. But that's a subject for another post.

The Echoes Of War

Many players of video games hate the idea of the discussion of politics in their chat channels. But sometimes real world politics reaches into games. We are experiences one of those times now, with the heightened tensions in Ukraine bringing up the possibility of the fighting spreading.

In EVE Online, we've seen the situation play out before. During the Halloween War, the CFC/RUS forces won a decisive victory at the Battle of B-R5RB over Pandemic Legion and the N3 coalition. Yet, in a matter of weeks, the N3/Pandemic Legion forces emerged victorious. The Wikipedia article about the battle alludes to the reason why.

Following the Battle of B-R5RB, Pandemic Legion withdrew from the Southeast theater and formed an agreement with the CFC which allowed them to evacuate billions of assets from the B-R5RB system. Other N3 forces retreated in from the south, and in the following few days CFC alliances managed to capture a total of 23 systems in the regions Immensea, Catch, Tenerifis, and Feythabolis from N3/Pandemic Legion alliances. The CFC then withdrew from the southeast theater. In the weeks after, the Russian bloc suffered internal troubles, allowing N3 to regain all of the territory lost after B-R5RB and conquer most of the Russian bloc's territory. In the longer term, B-R5RB established CFC, later re-branded as The Imperium, as the predominant superpower in EVE Online, with little serious resistance challenging the coalition for the next two years. [emphasis mine]

The issues were not limited to the Russian alliances involved in the Halloween War. In April 2014, an article appeared on TheMittani.com highlighting the collapse of Russian alliances throughout New Eden, in particular Against ALL Authorities in Catch. The article concluded:

The factions of the RUS block are scattered for a variety of reasons, both internal and otherwise. Unable and unwilling to defend their home region, -A- might be wise to either sell or drop their sov before HERO moves in. Despite the most expensive losses in the history of New Eden, things appear to have worked out solidly in N3PL's favor.

What were the internal troubles affecting the Russian alliances following the Battle of B-R5RB on 31 January 2014? One of them was the invasion and subsequent annexation of the Crimean Peninsula, which began on 20 February 2014. While not an expert, I know the "Russian" alliances were not comprised entirely of ethnic Russians. Many of the members were Ukrainian. People are tribal, and when one tribe attacks another, the conflict isn't confined to the battlefield. 

Also, while EVE players are pretty serious about their game, when a hostile army is attacking their town, I don't know of any who wouldn't move to safer ground. For those able to log in, how many would risk engaging in PvP with a questionable internet connection? 

The reverberations of real world conflicts into our virtual worlds aren't new. Any game where citizens of the involved countries share servers will experience some sort of effects. But in single shard games like EVE, the echoes of war will affect all the players.

Pearl Abyss Q4 2021 Earnings Call

Early this morning (or yesterday in the U.S.), Pearl Abyss held an earnings call covering the final quarter of 2021. Hang on folks, because everything just got a little more complicated. By complicated, I mean even some, if not all, the analysts from the investment firms were taken by surprise. I'll try to make some sense of what I heard.

From the Q4 2021 Pearl Abyss Earnings Call

At first glance, the numbers for the fourth quarter were great. Pearl Abyss earned ₩118 billion ($98.5 million), or a 22.4% increase in operating revenue compared to Q3 2021. Year over year, revenue increased by 11.7%. The company bounced back strong from the second quarter where PA posted an operating loss. The ₩25.7 billion operation profit was a 28.5% increase compared to the final quarter of 2020. Very good numbers, right?

What caused the big bounce back in the 4th quarter? The Black Desert intellectual property declined by 5.5% quarter-over quarter, and 20.6% year-over-year, posting a total of ₩67 billion ($55.9 million). The EVE IP also is not the source of growth. The combined revenue of EVE Online and EVE: Echoes declined by ₩400 million ($330,000) QoQ and ₩700 million ($580,000) YoY. 

If Pearl Abyss' two main game franchises didn't account for the increase, where did the extra ₩32.6 billion ($27 million) come from? One of the investment analysts asked the question. The answer is a subsidiary called Pearl Abyss Capital. In the Q3 2021 earnings call, 

I reported on how Pearl Abyss invested in a metaverse company known as Hyperreal. The purchase was made by Pearl Abyss Capital, a venture capital firm. I didn't follow all of the details, but the vast bulk of the money was attributed to Pearl Abyss Capital. After the Q3 call, Pearl Abyss Capital led a ₩3 billion round of funding into TUNiB, a "Natural language processing artificial intelligence start-up". Looking at the website, the company's technology seems to have applications for the metaverse.

Pearl Abyss plans on launching Black Desert Mobile in China in the near future. The executives on the call told analysts the company plans on conducting a closed beta test in the first quarter, with a full commercial launch shortly afterwards.

During the call, Pearl Abyss highlighted the development of the Blackspace Engine. While gamers are interested in the graphical and gameplay implications, the analysts on the call were told how PA's new engine can help with development of metaverse technologies. The new engine will run the two new games, the delayed Crimson Desert and DokeV. PA on the call stated it would base new games on "the metaverse and blockchain."

While the executives on the call did not give a launch date for the delayed Crimson Desert, they did provide information about an upcoming mobile game based on the Black Clover IP. Pearl Abyss will conduct a closed beta test sometime in the second quarter, with a full launch in Korea and Japan sometime in the second half of 2022.

The same analyst who asked about the games vs capital subsidiary revenue also asked about Pearl Abyss' strategy concerning blockchain technology and pay2earn mechanics, mentioning DokeV and EVE Online by name. Since the topic is of interest to many people, I transcribed the translator's words below. Hopefully an official transcription will show up in the future.

The game industry is rapidly changing. Within the games, there was consumption, and goods or item accumulation that just happened limited to the virtual world. But now times have changed and now the values that users have created has meaning, even outside of the virtual worlds and are acting as assets.

The need to create value by playing games actually existed even before play2earn -- which is a buzzword nowadays -- has existed. We can see many trends that happened from the past. For example, with the development of video games in the early 2000s there was the wild popularity of eSports. And after the distribution of smartphones we saw more game streaming broadcasts that took place. And we also see people that are actually having a job that are done through playing games and they are making a living and they call this their job. So all of this attests to the need to create value though games.

Likewise, though the development of technology, times are changing from just the passive state of playing simply a game that has been given, but now we have users that actively participate and the structure has changed so they can also create profits through this.

In particular, we believe that blockchain technology will accelerate this trend. To these changes, our company has been researching different technologies during the past years and have reviewed the possibility of introduction. 

We will shortly communicate with you in different stages about what we are currently preparing for. Our company and CCP Games both have operated MMOs for a long time and we do have the knowhow to maintain and manage a sustainable economic system. So we are confident we can create a stable blockchain ecosystem. 

After an enthusiastic opening on the KOSDAQ, the price of Pearl Abyss stock fell 2.42% from the stock's opening price of ₩98,000 down to ₩92,700. On 10 November 2021, the day of the Q3 2021 earnings call, the stock closed at ₩114,900. Pearl Abyss stock had finished 2021 at ₩138,300.

Noticing EVE Online Marketing Efforts

After the first four days of Guardian's Gala, I had 425 event points. Pretty good, right? Even with my other EVE activities, I should reach 900 points by downtime on the 22nd. But this morning I received an email from CCP Games reminding me about the current event. 

This morning's email from CCP

My first thought was, is CCP freaking out about no big jump in users over the weekend. Looking at the numbers, PCU declined 2.5%, from 31,773 down to 30,977, week-over-week.

Looking at PCU on February 6 vs February 13

Such a small decline is pretty good on a weekend that saw Lost Ark launch and record the second largest concurrent player mark in Steam history. I then decided to go back through my emails and see if CCP always sends out reminders for events.

Apparently, the email reminders started in 2022. I received a reminder email six days after the beginning of the Doctor Who crossover event. Going back through my primary email account, I only received one notification for each EVE event.

I have mentioned in coverage of Pearl Abyss investor calls that Black Desert, especially Black Desert Mobile, was continuously losing revenue for over a year. At the time I suspected that Pearl Abyss would look to the EVE IP to staunch the losses caused not only by the decline of BDM, but also the failure to launch Crimson Desert on time. The Korean company is looking for any sources, ranging from NFTs to the metaverse, to increase revenue. Trying to drive engagement with reminder emails seems very tame compared to the alternatives discussed in the EVE news. But I thought I'd mention the effort anyway, if only for my own memory.

My Email From CCP About Guardian's Gala YC124

I hopefully have mined enough, because the next live event in EVE Online, Guardian's Gala, appeared Tranquility today and runs through downtime on 22 February. I also received an email today advertising Guardian's Gala. I thought looking at the email might prove interesting. After all, the email should present the highlights the marketing department thinks will attract players to log into EVE, right?

The intro to the email

The first paragraph of the letter led me to write this blog. The third sentence of the letter gives the news that players can get the new compression-related skillbooks before everyone else if they participate in the event. In the article introducing the event, that information doesn't appear until the 6th paragraph.

The button leads players to the news article.

Where to get the good loot

The next section of the letter tells players where to get the best loot. In the case of Guardian's Gala, that is wormhole space, the Phoenix constellation in Fountain and Heaven constellation in Curse. One interesting omission is the lack of inclusion of the increase in PvP drops in wormhole space during the event. According to the patch notes, the PvP drop rate increases from 50% to 90%.

First advertisement

Of course, the marketing department has to hawk virtual goods. I clicked on the link and looked at the two featured bundles. The first is the Double Booster Bundle. For $39.99, players get 2 million skill points, an Expert Cerebral Accelerator, and a Prototype Cerebral Accelerator.

The Double Booster Bundle

The second deal is the Heartsurge Pack. For $19.99, players can get a body resculpt certificate, event-themed fireworks, two suits (male and female), and SKINs for the Daredevil, Vigilant, and Vindicator.

The Heartsurge Pack

Returning to the letter, the substance concludes with a description of the lore associated with the event.

The story behind the event

One thing I initially wondered about was the lack of mention of the daily login rewards.

Be sure to log in during the event to grab up to 55,000 Skill Points for Alpha and 230,000 for Omega clones. On top of this bounty of SP, by logging in each day you’ll be getting a set of free SKINs and boosters. These boosters are unique to the Guardian’s Gala and will offer powerful bonuses such as an increase to your Warp Scrambler range or a reduction in remote rep cycle time! Remember that you can upgrade to Omega at any time during the event to receive any of the rewards you might have missed as an alpha clone.

Thinking about the matter for a few minutes, I guess the marketing department figured players would find out about the login rewards when they logged into the game.

Overall, I found the email informative and helpful in getting a feel for Guardian's Gala before logging into the game. By clicking the links, I can also see potential issues players might complain about. Then again, the issues people might object to are so old at this point, I doubt we'll see any outrage.

The Latest On Star Citizen's Roadmaps

Last week Cloud Imperium decided to change the way they inform customers about the progress of its upcoming game, Star Citizen. According to MassivelyOP and a lot of YouTube videos I watched over the weekend, CIG has removed release dates farther in the future than the next quarter. 

Rather than continuing to display release projections that carry a high percentage chance of moving (those multiple quarters out), we will no longer show any deliverables in the Release View for any patches beyond the immediate one in the next quarter. Even though we always added a caveat that a card could move, we feel now that it's better to just not put a deliverable on Release View until we can truly commit to it. We’re going to emphasize more strongly than ever that you should focus your attention on our Progress Tracker, which has been our continued goal. Going forward (starting after Alpha 3.18), we’ll only add cards on Release View one quarter out. Our process remains the same for updating a feature’s status: cards on Release View will be listed as Tentative until they pass their final review, in which they are marked as committed upon passing. This is no different than how things are handled today.

Sounds pretty reasonable, right? CIG has overpromised and they want to end the practice. But whoever wrote the explanation made a little mistake right before the passage above.

It has become abundantly clear to us that despite our best efforts to communicate the fluidity of development, and how features marked as Tentative should sincerely not be relied upon, the general focus of many of our most passionate players has continued to lead them to interpret anything on the Release View as a promise. We want to acknowledge that not all of you saw it that way; many took our new focus and our words to heart and understood exactly what we tried to convey. But there still remains a very loud contingent of Roadmap watchers who see projections as promises. And their continued noise every time we shift deliverables has become a distraction both internally at CIG and within our community, as well as to prospective Star Citizen fans watching from the sidelines at our Open Development communications. [emphasis mine]

When working on a game in development for close to 10 years that probably needs another 5 years of work before it can launch, upsetting a sizable portion of the customer base is probably not a good idea. At the very least, the company needs hundreds of millions of dollars to complete development.

How much? In 2020, CIG spent $80.8 million. At that rate, CIG needs to raise around $400 million. That's in addition to the estimated $550 million raised through the end of 2021. In other words, CIG needs to maintain really good relations with the whales keeping the studio afloat.

Now, I suspect the whole controversy is not much more than a tempest in a teacup. A very stormy situation amongst a small pool of people. The financial report for 2020 showed CIG turned a profit and I highly suspect the same will hold true for 2021. Until I see evidence to the contrary, I see the CIG money machine continuing to roll on for the foreseeable future.

Blizzard Bans Boosting Communities In World Of Warcraft

So what is RMT?  At the most basic level, real money trading is the exchange of virtual goods, including in-game currency, and services for real world currency.

-- The Nosy Gamer, 2013

When I first heard of boosting services and communities in World of Warcraft, I first thought of real money trading. After all, how much different is running a character through a dungeon to get loot from the leveling services offered to get a character from level 1 to the maximum level of a game? Wait, you thought the evil game companies thought up character boosts were thought up by a bunch of greedy suits? Ha! The practice has been a staple of grey/black market sites for years.

An article in PC Gaming described the practice.

These boosting communities have a surprisingly elaborate process. They hire players to advertise their services on various servers. A buyer contacts them and pays them gold that is then paid to a "bank", or representatives of the boosting community. From there, boosters, who are paid with in-game gold from that bank, take on the job of getting players what they're after. All of this happens across multiple servers and is reported back to a centralized Discord server. This way, players who, for whatever reason, can't perform a tough raid or get a fancy mount, can either buy WoW Tokens for gold or pay the gold they already have for a group to help them. The advertisers, boosters, and other admins get to take that gold and continue their subscription or turn it into Blizzard bucks, if they want.

The only question was how much and how long Blizzard would tolerate the practice. The PC Gamer article makes the practice sound like everyone follows the rules. Hardly. Given the long history of WoW players violating Blizzard's rules, why would anyone think ToS violating activity was not occurring. Instead of buying WoW tokens for the gold to give the raiders offering the services, they could instead choose to either buy gold off the secondary markets or pay the groups directly using PayPal. Also, with that much gold floating around, some of the gold would inevitably find its way onto the secondary markets for sale.

On Monday, a blue post appeared on the WoW forums declaring changes to what Blizzard would allow in the future.

As the conditions change by which various entities operate in World of Warcraft, we are compelled to update our policies to further our goal of making the gameplay experience as fair and welcoming as possible. Since we last updated our policies, we have found that an increasing disturbance of the gameplay experience has been caused by organizations excessively advertising various non-traditional services in-game.

As of today, we will now prohibit organizations who offer boosting, matchmaking, escrow, or other non-traditional services, including those offered for gold. World of Warcraft accounts found to be in violation of this policy are subject to account actions. These actions can include warnings, account suspensions and, if necessary, permanent closure of the disruptive World of Warcraft account(s). Organizations operating across multiple realms and excessively advertising non-traditional in-game sales are contrary to the terms and conditions of the Blizzard End-User License Agreement (EULA).

This policy update does not restrict individuals or guilds from using the provided in-game tools (“trade channel” chat) to buy or sell in-game items or activities for in-game currency. However, “boosting communities”, especially those who operate across multiple realms, are no longer permitted.

We urge all such organizations to cease doing business in World of Warcraft immediately, in order to maintain uninterrupted access to the game.

I haven't played WoW since Vanilla, but I have written about real money trading activity for over 10 years. Unless the developers on WoW change the game mechanics that produced the demand for boosting services, a change in the rules won't stop the practice. At best, the boosting services will go underground, although on a smaller scale. For the short term though, perhaps the ban on boosting communities is the best Blizzard can do. Hopefully Blizzard will come up with a long term solution in the next expansion.

What I Did In EVE In January

At the beginning of the COVID lockdowns in 2020 I was a bit disenchanted with EVE. After a huge DDoS attack that lasted for days, I wound up playing a lot more Final Fantasy XIV and a lot less EVE. Yes, the financial disaster known as the Chaos Era really shook my faith in the direction of the game. By 2021, I mainly played EVE during the seasonal events, watching the Scarcity Era play out from the sidelines.

With the MSQ in FFXIV's Endwalker expansion complete, I had a little more time to play a second game. I added to the time by not concentrating on RMT as much as I did in the past. Of course, I kept up with the news about EVE and read about the developers' plans for winter. With all the crying and gnashing of teeth occurring on the EVE sub-Reddit, I figured the developers were doing something right. So on the first day of 2022, I decided to play EVE semi-seriously again.

What does semi-seriously mean? For me, spending more than an three or four hours in the game each week. And planetary interaction. Anyone maintaining PI colonies is playing semi-seriously. But maybe I should just list my activities in EVE last month. 

Cleaning my redeem queues. One of the first things I did was go through my redeem queues looking for valuable items like skill points and blueprint copies. On my third account, I found the ISK tokens from The Great Heist event back in July and August. Putting 235 million ISK on an account with only 30 million ISK felt good.

Playing the market. I was a little surprised how much I used the market in January. While in the beginning of the month I was selling items obtained before 2022, I wound up completing 51 of the sell orders I created in January. Overall, I sold 496.6 million ISK worth of items on the market while paying 49.5 million in broker fees, transaction taxes, and market escrow.

I also purchased 28.8 million ISK in items, mostly to fit the Rupture I used in the cross-over event.

The Doctor Who crossover event. I would have played the event in any case, but I was a little more serious with the Doctor Who event in January. I did get one character to 900 event points. I lost count of the number of sites I ran in both high and low security space, but the logs did show how much ISK I earned. 

I received 7254 Peculiar Data Collections, the commodity players sold to NPC buy orders for 10,000 ISK apiece. But I also sold event boosters and filament building materials on the market for an additonal 110.5 million ISK. When including filament BPCs I sold in contracts, I pulled out 191 million in ISK, minus taxes and fees. Not bad for an event more directed to new players.

Mining. I began mining so I could experience the new mechanics first hand. I ended the month mining veldspar to export the minerals to my manufacturing station in low sec. With tritanium only available in high sec or in null sec sites with spodium, I have to mine in high sec. I don't have a choice about exporting the mineral to low sec; just how I obtain the construction material. 

In January, I mined 370,000 cubic meters of ore, enough to fill 20 Skiffs. I used the Type A tech 2 mining crystals, which resulted in 28.5% mineral residue of the available ore. Given the small amounts I mine, I didn't worry much about the residue.

I didn't initially set out to create a ship construction program, so sold 22.5 million ISK worth of minerals.

Planetary Interaction. I really need to get serious about my planetary interaction colonies. I had some items ready for sale from 2021, which inflated my sales amount of 200.9 million ISK for the month. I only ran 4 planets with a character who can operate 6. How much could I make if I used 2 characters?

Industry. As I mentioned last week, I decided to turn the frigate, destroyer, and cruiser BPCs I receive as daily Omega rewards into ships. Last month I built 18 ships: 2 cruisers, 6 destroyers, and 10 frigates. The ships I didn't already own I'll keep and sell the rest. In January I sold a Cormorant and a Kestrel. I hope to sell a lot more in February.

Project Discovery. Finally, I try to start the day by playing Project Discovery. I use two characters, since the first 10 examples for each character get double the Project Discovery experience. I complete one level per character per day. I started late in the month, so only made 25.6 million ISK. I'm interested in how much I'll make in February.

That is a description of my playtime in EVE in January. How serious is my return? I'll let the reader decide. But I do want to continue playing for another month to see what the developers do with the game.