Tuesday, May 31, 2022

EVE Online's New Heraldry System Could Use A Touch Of Yoshi-P

Back in March, a kerfuffle occurred around CCP selling a package in the EVE Online cash shop that included a Retriever mining barge. The protests against selling internet spaceships directly for real world money like Star Citizen reached Twitch before finally subsiding. The protests faded when CCP Swift published an announcement CCP was pulling the Prospector Pack from the cash shop. His statement included the following passage.

One of the topics for Fanfest is a new project that we’re in the middle of developing, that will transform these and any future packs - a paradigm where packs of this type will be supplied by players, ensuring that any ship we offer to new players through sales, will have origins from actual player work in New Eden: Made for new players, by veterans. This feature will also not only supply each ship from the player base but allow the community to influence which ships will be put in these packs.

In effect, CCP intended to still sell ships for real world money, but would give players a chance to get a piece of the action. The move worked with selling ISK for money (PLEX) and skill points for cash (skill extractors/injectors), so why not ships?

At Fanfest CCP unveiled the heraldry system. In truth, they just announced an intention to create a new system that players might like. On day 1 of the event, we received a hint of what was to come.


You will soon be able to display your unique identity and loyalty proudly on your ships and hangers through alliance logos, visual changes to your ships, holograms that reflect your social standings, killmarks, structure skins and other customizations attainable through InterBus credits, a new in-game currency.

InterBus credits can only be earned in game. They can never be traded between Characters, sold and do not have a fixed exchange rate to any other currencies.

A nice beginning, but watching the keynote, I had the feeling the new system would involve a bit of monetization. The day 2 news article went into further detail.


The coming heraldry system lets you show off your achievements by displaying logos, visual changes to your ships, holograms that reflect your social standings, killmarks, structure skins and other customizations. You’ll be able to purchase those items with InterBus credits, which are earned by doing activities in-game. Those activities could be as simple as a daily challenges or events, or something more complicated. In almost every case, the activities will be focused on the social and interacting with fellow pilots.

To go along with this there’s a new unified fitting window coming that will combine heraldry and modules.

We’re also aiming to establish strong, healthy corporations, giving their members plenty of activities and goals, while providing more tools for corps to recruit, train and retain new pilots as they grow their member base.

We’ll also be helping corp leaders streamline their corp’s activities by making InterBus credits, taxable (though they won’t be tradable). We’ll also be giving corporations the tools to automate these arduous bookkeeping tasks with two optional taxes, LP Tax (on earned LP) and Value Tax (on sold goods on the market), in addition to the new Spreadsheets in Space tool mentioned in yesterday’s keynote that exports data directly from EVE into Microsoft excel.

This is all to help strengthen corporations in New Eden.

I think one of the most asked questions was: why not put these items in the cash shop? The answer came in the next section of the day 2 article.


A new program will soon be introduced allowing you to manufacture or purchase items, making them available for other players to purchase. Players who participate will be rewarded with heraldry, which unlocks many cosmetic items that help you establish your individual and alliance identity in New Eden. This is all aimed to lean into EVE’s player-driven economy and provide more avenues to participate in the economy, and be rewarded.

Yes, the plan to sell spaceships directly from the cash shop became clear. Players would acquire or build ships and trade them for InterBus credits to get the sweet, sweet heraldry items. CCP will then sell the ships in the cash shop for real world cash.

I would really like options to obtain heraldry items without engaging in primary market real money trading. CCP is still working through what the system will eventually look like. I expect to hear something in 5-6 months from now. Hopefully CCP isn't too proud to look at other games for ideas. 

I think my current primary game, Final Fantasy XIV, does a good job with its Free Company system. Free Companies (FCs) are FFXIV's name for guilds or corporations. The game has a version of InterBus credits called, simply enough, company credits.

Company credits are used to increase a Free Company's rank as well as buy perks for the FC and its members. Credits are earned by performing the following activities.

  • Inviting New Members
  • Crafting anything High Quality
  • Gathering anything High Quality(?)
  • Undertaking supply and provisioning missions with your Grand Company
  • Completing FATEs
  • Completing Duties
  • Completing Quests
  • Earning Achievements

Basically, most any basic gameplay function an FC member does earns a free company credits. The system never shows player the credits they generate, so their is no sense of loss. Also, the system incentivizes FC leadership to maintain an active FC. The more active the FC, the more credits generated.

Players get more from the generation of company credits than the ability to put the FC's crest on their gear. FC leadership can purchase buffs that affect all members for 24 hours. The buffs range from increasing experience in combat, crafting, and gathering to buffing stats associated with those activities. Probably my favorite buff is the transportation buff that reduces fast travel fees by 20-40%, depending on the rank of the buff. That one buff can save players thousands of gil every week.

I realize CCP's effort is a work in progress, but I am concerned about this statement. 

You’ll be able to purchase those items with InterBus credits, which are earned by doing activities in-game. Those activities could be as simple as a daily challenges or events, or something more complicated. In almost every case, the activities will be focused on the social and interacting with fellow pilots. [emphasis mine]

Focusing on the social and interacting with fellow pilots is CCP language for PvP activity. I get the feeling, especially since the beginning of 2019, that CCP would like people to play EVE a certain way. I fear people who shy away from PvP and don't join fair sized groups probably won't get much out of the new system. If those people leave the game, well ... CCP didn't want those type of players anyway.

I really hope that CCP follows the philosophy of FFXIV's Producer and Director Naoki Yoshida. Final Fantasy XIV tries to provide content for everyone, even PvPers. He decided to make the game more friendly to solo players in an effort to make FFXIV welcoming to more Final Fantasy fans. 

If Yoshida is still looking to reach out for more players, hopefully CCP will do the same. I know the top leadership of CCP thinks EVE should attract a certain type of player and wants to cater to those people. Hopefully certain important people learned with Blackout in 2019 that abandoning the so-called carebear is financially harmful. We'll find out with how CCP handles the new heraldry system.

Monday, May 23, 2022

MMORPGs Are A Marathon, Not A Sprint

A lot of players are complaining now, but EVE Online really is a remarkable game. How many games last 19 years with continuous development? Thanks to Croda of marketsforISK, we have financial records for CCP and its successor, Pearl Abyss Iceland, going back to 2012. 

Game revenue, mostly generated from EVE Online

Over the last 10 years, games using the EVE IP, primarily EVE Online, generated $636 million in revenue. Last year's $63.8 million was slightly over the 10-year average of $63.6 million. Of course, 2021's revenue includes $10 million from EVE Echoes. But EVE Echoes was not the only other game besides EVE Online published by CCP. Since 2014, CCP published DUST 514, EVE: Valkyrie, EVE: Gunjack, and Sparc.

While we don't have records for 2003-2011, I think I can safely say the EVE IP has generated over $1 billion, if EVE Online itself hasn't recorded $1 billion in revenue since its launch in May 2003. Given CCP's beginning as a small indie studio founded on a rock in the middle of the North Atlantic, creating a $1 billion IP is a pretty good accomplishment.

If people think EVE Online is sick and in danger of dying, then what do we say about New World? The Amazon Games' game started out strong, with a peak of 913,027 users at least trying to log into the game on the first day. Much better than EVE's all-time peak of 65,303 on the game's 10th anniversary. But seven months after launch, New World's numbers were lower than EVE's.

EVE Online vs New World yesterday

Yesterday, New World has a high water mark of 22,779 accounts. recorded a peak concurrent user number of 27,401 on the Tranquility shard for EVE Online. Including the Chinese Serenity shard would push the number over 30,000.

As for sales, how is New World doing? According to VG Insights, Amazon Games had sold 6.8 million units for $162.9 million. Pretty good money, surpassing what EVE Online has made for Pearl Abyss. The question is, how much longer will New World keep going? The game's monetization is limited to cosmetic items with no subscription options, so sales of units needs to continue. 

Slowing sales for New World

According to VG Insights, Amazon has sold 35,000 copies of the game over the past 30 days. At an estimated $37.56 per copy, that runs to $1.3 million. As a comparison, the EVE IP averaged $5 million per month in the first 3 months of 2022.

One final comparison. Yesterday, nine years after EVE's peak concurrent user mark, yesterday's PCU was down 58%. New World, on the other hand, was down 97.5% from its peak concurrent users set 7 months ago.

Ideally, player logins increase after launch of a new MMORPG. In EVE's case, player numbers grew for 10 years. But after only 7 months, New World had declined to a point below EVE's numbers after 19 years. Apparently, EVE is making more money now as well.

Thursday, May 12, 2022

Pearl Abyss Q1 2022 Earnings Call

Some view the world like the glass is half-full. When looking at the results of Pearl Abyss' first quarter 2022 earnings call, an optimistic person might say the South Korean game maker did better than expected. Two analysts wrote their expectations for the call on BusinessKorea last week:

Pearl Abyss is expected to have posted sales of KRW88.8bn (-12.0% YoY,-24.7% QoQ) and operating loss of KRW1bn (negative swing YoY and QoQ, operating margin of -1.1%) for 1Q22. The company should have swung to a loss owing to sales drop and labor cost hikes from new hires, despite declines in marketing spend and other expenses. Sales likely fell QoQ due to high base effect created by Pearl Abyss Capital’s one-off investment gains booked in 4Q21.

Pearl Abyss didn't do quite that poorly, as the slide below shows.

Okay, Pearl Abyss brought in ₩91.4 billion ($75.5 million), beating expectations by 3%. But after the one-time revenue claim from Pearl Abyss Capital at the end of 2021, revenue was expected to plummet from the last quarter of 2021. And while drops in operating profit and net profit fell off a cliff, at least PA had profits to claim.

Gaming revenue rose in the first quarter, up 4.3% from the Q4 2021 total of ₩85.4 billion ($72.7 million) to ₩89.1 billion ($73.6 million). Before continuing, I need to explain why the U.S. dollar total only went up 0.1% instead of 4.3%. The South Korean won is weakening against currencies like the dollar, British pound, and Chinese yuan. In the rest of the article, the won to dollar valuation is calculated using the exchange rate on the last working day of the quarter as found on Xe. So as we can see, the dropping value of the won is boosting Pearl Abyss' profits.

We can do the same with Black Desert IP revenue. Year-over-year, Black Desert revenue dropped from ₩82.9 billion ($73.2 million) in Q1 2021 down to ₩70.9 billion ($58.6 million) in Q1 2022, a 14.5% decline in revenue. The Black Desert IP did post a quarter-over-quarter gain of 5.8%, from ₩67 billion ($56.3 million) up to ₩70.9 billion ($58.6 million).

The EVE IP revenue looked very steady over the last year, with revenue rising 3.4% from Q1 2021's total of ₩17.6 billion ($16.2 million) up to last quarter's ₩18.2 billion ($15 million). Oh, oh. Now we can really see the effects of the weakening won. If converted to U.S. dollars, the 3.4% year-over-year gain turns into a 7.4% revenue decline. 

Continuing on, EVE revenue remained "steady" from Q4 2021 to Q1 2022, only falling 1.1%. Even doing the won to dollar conversion doesn't show a big drop, as EVE brought in ₩18.4 billion ($15.5 million) in the final quarter of 2021.

At this point the pessimist takes over. With revenues inflated by the steadily weakening won, what are Pearl Abyss' plans to increase revenue? The April launch of Black Desert Mobile in China was disappointing not only to the analysts on the call, but to Pearl Abyss as well. From the tone of the call, the real possibility exists that Pearl Abyss will launch no games in 2022.

The analysts tried to get the Pearl Abyss leadership to let them know if Crimson Desert would launch in 2022. The answer was basically, "You'll find out when we tell the public." Listeners on the call were also told that the studio was concentrating on Crimson Desert, which means DokeV most likely will launch after the Black Desert spin-off. One analyst even asked about the upcoming Black Clover mobile game mentioned on the February earnings call. Despite telling analysts three months ago the game would launch in the second half of 2022, the analyst could not get Pearl Abyss to confirm if the timing still held.

About the only big news that might happen in 2022 is Pearl Abyss self-publishing Black Desert Online in South America. The move would mean the South Korean studio would now self-publish around the globe. Perhaps more importantly, every time Pearl Abyss self-publishes BDO in a region, its revenues increase for a time.

New Pearl Abyss CEO Jin-young Heo did answer a question about the future of Pearl Abyss. Below is a transcription of the translated answer.

You also asked us about the direction of our new business going forward. And we are planning many things. For example, we have DokeV that uses the metaverse platform as well as others that use the web 3 platform so we are seeing the market trends. And to successfully launch Crimson Desert in line with the Western biggest market, the console market, and also to make DokeV into a metaverse platform and to showcase this to the market. And to have a new project which I have before mentioned, using the current market trends of blockchain and web 3.0 using the EVE IP. So we believe as a game development studio we are going to focus more on these and that will be our task going forward. 

I would love to get a transcription of the Korean language portion, as I believe subtle but important differences exist. For example, in the passage above, the translator used the term "EVE IP", while the CEO used the actual term "EVE Online." Korean and English speakers may walk away from the call with two impressions of what Pearl Abyss plans for the future. 

In today's trading, Pearl Abyss stock declined 6%, finishing the day at ₩57,500. So far in 2022, Pearl Abyss stock has declined 57.1% in value.

Thursday, May 5, 2022

Feeling Down About Fanfest

Today is the 19th anniversary of the launch of EVE Online. I have held at least one subscription to the game since August 2009. That's right, I have played through two-thirds of EVE's history. Between the subscription fees and all the EVE meetups and conventions I've attended, I estimate spending between $35,000 and $40,000 on my hobby. While CCP received less than 20% of the total, I have spent quite a lot over the years.

Speaking of travel, I have gone to Iceland to attend Fanfest seven times. I went every year from 2012 to 2018. CCP did not hold a Fanfest in 2019, and my trip in 2020 was cancelled due to the emergence of COVID-19. I started a new job in February so couldn't get the time off to attend this year.

I do have to say, that in all my time playing, this year is the most underwhelmed I've felt at the thought of the news about to come out of Reykjavik from CCP's flagship convention. I started the year wanting to play more EVE following completion of FFXIV's Endwalker expansion MSQ in December. That lasted until March and the news of Prospector's Path and the Prospector Pack that sold Retrievers in the cash shop. Looking back, that was a gut punch. I still fiddle around with planetary interaction, but I really need CCP to come out firing at Fanfest to rekindle my interest in New Eden.

The only problem is, I don't see any indication that we will see CCP release a major content patch following the convention. Or that CCP will make any major announcements over the weekend at all. If they do plan on doing so, they are keeping the news secret.

I find the lack of news disturbing. On 11 April, we have seen a promise to not bring blockchain technology to Tranquility. Two days later, CCP revealed "Siege Green" on the Singularity test shard. So we see some numbers change on Upwell structures. Big deal. Okay, removing the hull reinforcement timers may wind up a big deal. But I don't see an expansion level patch in our near future.

So, what would get me excited? First, that CCP is about to incorporate Hadean's Aether Engine into EVE to allow a huge increase in the number of players who could participate in fights. Did I mention in the last test, the Aether Engine used Unreal Engine 4? Maybe at the same time the developers increase server capacity, they can port our current characters into Unreal Engine and finally get rid of the last vestiges of the Carbon engine.

Next, a full revamp of the mission agent system. Making the PvE in EVE much better would benefit any plan to turn EVE into a play-to-earn game. Forget players like myself. Such a move would make Pearl Abyss investors very happy. The financial world knows our Korean overlords in Anyang could use the boost.

Finally, in this "in case of emergency, break glass" moment, I would love to see a way to finally reach Jove space and run into another race. Not a human-type race like we have today. An actual, alien race. Barring that, I would love to see Triglavians become a playable faction.

Those are my hopes and fears for what we will see tomorrow during the Fanfest keynote address. CCP needs something big. I can hope, right?

Monday, May 2, 2022

Another Record Breaking Sales Month For Cloud Imperium Games

Last week the gaming industry experienced a lot of bad financial news. Everything from Activision Blizzard missing its expected sales of $1.8 billion by $320 million in the first quarter, to a 30% drop in stock price for Pearl Abyss, the news was poor. But the week ended with Cloud Imperium Games bringing in historically high revenue for the month of April.

The figure on the Roberts Space Industries funding page increased by almost $7.7 million in April, finishing the month at $454.2 million. The figure was the best April for CIG in its 10-year history, surpassing 2020's $4.1 million. Total revenue for the first four months of 2022 was $27.7 million. According to the unofficial Crowdfunding Development Spreadsheet, CIG raised nearly $97.5 million from 1 May 2021 to 30 April 2022 for the development of Star Citizen and Squadron 42.

Readers have asked why concentrate on the funding amounts. What about the game play? The features? The vision. Let's face facts. All of those things are nice to know when a game is about to launch. But currently we are looking at a possible release of Squadron 42 in 2024 and Star Citizen in 2026 or 2027. We don't know the development status of Squadron 42, and Star Citizen is still in early alpha.

One thing we do know is that CIG does not have enough money in the bank to complete development of the project. Here is the amounts raised by CIG so far.

  • Ship/equipment sales and game packages: $454.2 million (thru 30 April 2022)
  • Subscriptions: $22.8 million (thru 31 December 2020)
  • Other income: $44.7 million (thru 31 December 2020)
  • Outside investment: $63.2 million (thru 31 December 2020)

At the end of 2020, CIG had $63 million in the bank, but had spent $80.8 million that year. For all the dreams of players to come true, the company needs to continue cranking out ships to sell at very high rates. Currently, CIG is on pace to reach $100 million in sales in 2022. Hopefully that is enough to forestall layoffs until the company can open up another revenue source by launching Squadron 42. But watching the coffers fill up in real time is a bit of slow motion drama I find interesting.