Pearl Abyss Q4 2025 Earnings Call

On Thursday morning in Seoul Pearl Abyss held its latest earnings call discussing both Q4 2025 and full year financial results. For the final three months of 2025 the South Korean game maker recorded ₩95.5 billion ($65.9 million) in operating revenue, basically flat year-over-year revenue compared to the ₩95.7 billion ($69.8 million) recorded in the final quarter of 2024. For the year, Pearl Abyss recorded ₩365.6 billion ($257.5 million), a 6.8% increase over 2024's revenue of ₩342.4 billion ($251.0 million).

From the Q4 2025 Pearl Abyss Earnings Call

Not everything went well for Pearl Abyss in 2025. The fourth quarter resulted in the third quarterly operating loss and second net loss of the year. For 2025 Pearl Abyss racked up ₩14.8 billion ($10.4 million) in operating losses and a net loss of ₩7.6 billion ($4.9 million). Last year was the third consecutive year Pearl Abyss experienced an operating loss.

From the Q4 2025 Pearl Abyss Earnings Call

Before diving into the performance of the game IPs, looking at the performance of the Pearl Abyss' financial subsidiary is in order. For the fourth quarter non-game revenue accounted for 5.4% or ₩5.2 billion, of the company's total revenue. Unlike on previous calls with a large amount of non-game revenue, an explanation behind the income was not provided.

On the call the presenters made a point of mentioning the age of Pearl Abyss' two main games. For Black Desert Online, the game is in its 11th year of operation. The 10th anniversary was in Q3 and the revenue shows the extent of the celebrations. Quarter-over-quarter, Black Desert revenue dropped 20.8% back down to ₩63.0 billion ($43.5 million) for the quarter. The third quarter surge did result in Black Desert revenue increasing by 4.2% to ₩260.4 billion ($183.4 million) for the year. The South Korean won was weak against the U.S. dollar for most of the year, explaining why Black Desert revenue only rose by $200 thousand when the amount is converted to U.S. dollars.

The EVE IP, on the other hand, had a very successful year in terms of revenue in 2025. The final 3 months of the year resulted in revenue of ₩27.3 billion. On the call the presenters indicated the fourth quarter was EVE Online's highest revenue quarter since the pandemic lockdown years. And yes, while benefiting from foreign exchange effects, the $18.8 million recorded in Q4 was CCP Games' highest revenue quarter since the Icelandic studio was acquired by Pearl Abyss in October 2018.

CCP's success wasn't just confined to one quarter. With ₩92.8 billion ($65.2 million) in revenue for 2025, revenue in South Korean won increased year-over-year by 13% and 8.5% in U.S. currency. Both totals are records for CCP Games since the acquisition by Pearl Abyss.

A big event is coming up for Pearl Abyss: the launch of Crimson Desert. First announced in 2019, the launch is confirmed for 19 March 2026. Talk already has begun about Pearl Abyss' next game, DokeV. The presenters blamed part of the delay in releasing Crimson Desert on the need to develop the Black Space engine in parallel with the game. Investors were told that with the development of the engine complete new games will release faster. The company will release a date for the planned release of DokeV later in 2026.

Finally, anticipate progress reports on EVE Frontier to feature prominently on future earnings calls. While games utilizing blockchain technology may no longer be the flavor of the month anymore, I have the feeling investors are still interested in crypto. With crypto games dropping as fast as crowdfunded and AAA games have lately, CCP may not face much competition in the field for the next few years.

Q4 2024 and 2024 Full Year Revenue For The EVE And Black Desert IP

In a surprising move Pearl Abyss changed the way revenue was reported in the earnings call covering the fourth quarter of 2024. Instead of reporting the revenue for the Black Desert and EVE intellectual properties, the breakout instead was by game revenue and other revenue like from Black Desert's investment company. But with the release of Pearl Abyss Iceland's 2024 annual accounts on the Icelandic taxing authority's website yesterday we can now piece together the information traditionally covered by the last Pearl Abyss earnings call of the year.

Before continuing I should add that Croda has already published his analysis of PAI's 2024 financial information. If you would like his take on how PAI managed to lose $19.4 million I urge you to go over and read his post.

First, let's look at the revenue for the EVE IP. The EVE IP is made up of EVE Online, EVE Echoes, and EVE Galaxy Conquest amongst live games. For the year 2024 Pearl Abyss Iceland reported revenue of $60.2 million. Since we have revenue information for the first nine months of the year, that means revenue for Q4 2024 was ₩22.1 billion ($15.8 million), a 11.1% increase from the fourth quarter of 2023. For the entire year, the EVE IP recorded ₩82.1 billion ($60.2 million) for an increase of 12.6%.

Now comes the fun part. How much did Black Desert bring in for Pearl Abyss? Since we know the South Korean video game maker brought in ₩91.1 billion ($65.2 million), then the Black Desert portion of the revenue comes out to ₩69 billion ($49.4 million), a year-over-year increase of 14.8% compared to the third quarter of 2023. The extremely strong quarter meant revenue for the year was only down 1.1% to ₩2.7 billion for the year.

I remember at the time some EVE financial talking heads estimating that based on the Revenant expansion that the EVE IP brought in $18 million for the year. Instead, revenue fell in line with the second quarter of 2024 ($15.7 million) which saw the launch of the Equinox expansion. Given the launch of Galaxy Conquest at the end of October I believe I can speculate that revenue from EVE Online in Q4 was lower than that in Q2.

I will examine the latest financial accounts from Pearl Abyss Iceland in future posts but I believed in taking the opportunity in finishing up old business before moving onto the juicy new news.

My Predictions for 2025

Since I made some pretty bad predictions for 2024, I thought I should go back and look at how I did. Then, to prove my insanity, I'll make some predictions for the upcoming year of 2025. Maybe I'll do better?

EVE Online - At least I got my first prediction correct: a volcano did not destroy CCP's new offices in Reykjavik. But for those thinking the prediction was guaranteed, a volcano did destroy parts of the famous Blue Lagoon geothermal spa in November.

From here through, the predictions turned bad. Instead of continuing the improvement of low sec, CCP launched two expansions aimed at null security space, Equinox and Revenant.  Thus. the prediction of low sec witnessing more players killed than in null sec was a bust. Still, given all the complaining from null sec players, perhaps CCP would have received a better return on investment by continuing to focus on low sec.

I did use Project Awakening, now known as EVE Frontier, as a reason for ship development in EVE Online. I think I can safely say that did not happen. Instead we received four new industrial ships for EDENCON along with a destroyer and battlecruiser for Deathless Circle. 

Now for some predictions. First, CCP will realize the futility of creating null sec focused expansions and the spring will wind up as a hodge-podge of ideas again. Also, at the beginning of the expansion CCP will conduct another event with EVE Vanguard trying to incorporate itself with null sec play. The experiment will receive a horrible reaction from null sec players, ending the developers' efforts to improve null sec play. And with the realization, much rejoicing will come from player-owned null.

In the winter expansion, the developers will turn their attentions once again to The Deathless. The new pirate faction will receive three new ship types: frigate, cruiser, and logisticis cruiser. That's right, I see the Deathless Circle receiving the Triglavian treatment and getting Tech II ships in its ship tree. I think a Deathless Circle version of the Marshal is a bit much to expect in 2025.

EVE Vanguard - I'll admit I'm a bit confused about the development of CCP's latest attempt at a first person shooter. I'll count my prediction that EVE Vanguard did not go into a continuous alpha ala Star Citizen as true. I'll also count my prediction of the overlords in Anyang bringing up the game on an investor call as correct.

Vanguard will have a roller coaster year. On the plus side the game will enter beta sometime this year, probably during a favorable playtest in November or December. On the minus side, the complaints about CCP ruining null sec logistics for the inferior Equinox sov system (why couldn't they keep Fozzie Sov?!) will shut down development in that area for some time.

EVE Frontier (formerly Project Awakening) - The silence wasn't as deafening about EVE Frontier than I anticipated. I didn't expect any solid news about the title until November or December. Instead, CCP kicked off the announcement of the title's name in September and Closed Alpha in December.

As I am part of the Closed Alpha, I am under an NDA so cannot really make any game-related predictions. I feel confident enough though to predict another round of venture capital funding for the game. And since CCP has openly discussed the future of the Carbon game engine, I'll go ahead and predict the company will announce how Frontier tech has wound up in Online. Not a far-out prediction given both games use the same engine. Oh, and going open source doesn't count.

EVE: Galaxy Conquest - I thought the game would not release in 2024 due to actions of the Chinese government. I'll give myself a little credit for backing away from a no release in 2024 to a world-wide release outside China in Q4. The game was released on 29 October, so I got that part kind of correct. I couldn't tell if the game released in China yet.

Crowd Control Productions - I'm pretty sure some people in Reykjavik are waiting for this section, since I was wrong. Not about the game development part. I predicted CCP would have a good year developing games in 2024 and I count that prediction as true. Where I failed is revenue. I predicted a so-so year of revenue remaining between plus or minus 2-3% of 2023's. Instead. through the first three quarters of 2024 revenue was up year-over-year by 8.8%. I consider that a miss.

I still believe 2025 is the year CCP will fully see the fruits of their hard work in 2024. First, the big prediction. The games in the EVE franchise will meet the goal set by the overlords in Anyang of ₩20 billion each quarter in 2025. For the year, I expect 10% revenue growth, up to ₩90 billion, or $64 million. Due to currency fluctuations, the two figures may not match.

Black Desert Online - I made a prediction and just based on Pearl Abyss' investor calls, I'll go out on a limb and say I was correct about this year's expansion, Land of the Morning Light: Seoul not doing as well as 2023's Land of the Morning Light. I'm not even sure what was released this year counts as a real expansion or just a continuation of the effort in 2023.

The only prediction I'll make about BDO is the game makes a lot of "sickest MMORPG" lists in the gaming media as I expect another 10% decline in revenue from all platforms in 2025, down to around ₩215 billion.

Crimson Desert - A stopped clock is correct twice a day, which is how I feel about my predictions for Crimson Desert. Last year I predicted that while the game would not release in 2024, Pearl Abyss would make an announcement of a release occurring sometime during the first half of 2025. I also expected the ability to pre-order the game sometime at the end of 2024. That didn't happen either.

The game appears close to release, but after so many false starts, I'll repeat last year's prediction and just change the years. Watch for Pearl Abyss to announce a release date of the first half of 2026 sometime in November. Also, I see pre-orders for the game going on sale in either November or December of 2025.

Pearl Abyss - Thankfully I was too pessimistic about Pearl Abyss last year. The predicted 10% revenue decline was only 1% through the first three quarters of 2024. The predicted 12-15% decline in Black Desert revenue wound up at only a 6% decline. But all wasn't good news. Operating losses year-over-year increased from ₩10.9 billion to ₩14.4 billion over the first 3 quarters of 2024, partially justifying my concerns over the financial state of the South Korean video game maker.

Despite the performance of CCP Games, I don't see a good year ahead for Pearl Abyss. Beginning operations in the People's Republic of China this year will help, but I still see Black Desert revenue falling 5% due to the continuing decline of Black Desert Mobile. I'll go out on a limb and say Pearl Abyss will turn both net and operating profits in 2025.

Star Citizen - I think I was mostly correct about all the goodwill from CitizenCon dissipating by the middle of the year. Where I was wrong, however, was about server meshing. Right before the developers left for their Christmas break, they released a version of Alpha 4.0 on live "preview" servers. From watching Star Citizen content creators, the version is actually Alpha 4.0 Lite. But officially I need to call the prediction wrong, even if some creative use of language was utilized.

I think I can make a couple of predictions. First, the 3.24 version of the game still on live servers will not be taken down until sometime in the summer (June, July, August). I even expect the 3.24 version to receive a patch or 2, if only for ship sales. Next, dynamic server meshing will not appear anytime in 2025. And finally, the third planet due up for deployment, Nyx, will also not see the live servers in 2025.

Squadron 42 - Last year I fell for Chris Roberts' hyping up of Squadron 42 as "feature complete" at CitizenCon 2023. So I was wrong about predicting a 2025 launch with a corresponding influx of revenue from pre-orders in 2024. Instead of announcing a 2025 date for the release of SQ42 at CitizenCon, Roberts announced sometime in 2026. At least I got the CitizenCon announcement of a date correct, right?

With a release date sometime in 2026, I don't have anything to predict for 2025, right? Wrong. Cloud Imperium still needs to find a Chinese publisher if the company wants to sell the game in the People's Republic. So at CitizenCon, I predict Roberts will announce the Chinese publisher. I think the choice is obvious: TenCent.

Cloud Imperium Games - Last year I made three predictions about the company, all of which were incorrect. The first was that cash shop revenue, the number displayed on the funding page, would hit $123.5 million for the year. Currently an outside chance exists sales will equal 2023's $117.6 million although the likelihood is the company will fall $1 million short. While a less than 1% shortfall isn't bad, I predicted a 5% increase.

The second prediction was that CIG would surpass Pearl Abyss in the size of each company's workforce. At the time I made the prediction, CIG had over 1100 employees and Pearl Abyss was down under 1300. Since then, CIG engaged in a workforce reduction of 100-150 employees and Pearl Abyss added about 50.

Finally, I predicted CIG would receive another round of funding. As far as we currently know, no such funding round occurred. Which probably explains why we are hearing rumors of additional layoffs among the QA staff in Manchester.

I'll try to make three predictions for CIG in 2025.

1. Cash shop revenue will drop to $113 million. Despite my belief the two big ship sales, Invictus and IAE, will combine for $46.8 million in 2023, I still think reduced sales the rest of the year will result in a 3.5% year-over-year drop.

2. The amount of new accounts created will drop 15% compared to 2024. The last two years have really seen a huge drop-off in the number of new accounts created to play Star Citizen. With no Squadron 42 to attract fans until 2026, I think the decline continues but slows, with 408,000 new accounts created to play Star Citizen.

3. Cloud Imperium will close down its Los Angeles office. Roberts announced that game development had left the location in 2024 due to a restructuring. I know that Roberts affinity for the film industry makes the idea of CIG leaving Los Angeles hard to believe, but the high cost of doing business in California may lead to the change. Plus, Henry Cavill lives in London, so filming in the UK would be easier for him.

4. Tencent will get a 5-10% stake in Cloud Imperium. I'm waiting on CIG's 2023 financial report so I don't have a real good idea on CIG's spending over the past two years. I am guessing that CIG can't attract venture capital funding so the next best thing is getting money from a big publisher. Tencent fits the bill. Did I mention Tencent also likes picking up little stakes in lots of companies it thinks will do well?

Final Fantasy XIV - And last but not least is Final Fantasy XIV. I got a lot of predictions right last year. The game earned a lot of credit for handling launch traffic well along with the graphics upgrade. And there is also a lot of doom and gloom about the franchise with at least content creators complaining about how bad the Dawntrail expansion was and is.

I was wrong about World of Warcraft impacting Dawntrail's launch as The War Within didn't launch until 26 August, or almost 2 months after the launch of the Dawntrail early launch on 28 June. I was also wrong about both new housing and the cosmic exploration content as neither reached the live servers during 2024. In fact, Dawntrail probably will not new a new housing zone until patch 8.1 in 2026 with players having to settle for the expanded interiors coming to housing in 2025.

So what do I think is in-store for FFXIV in 2025? First, with the next expansion due to release sometime in the summer of 2026 I expect the first fanfest to occur in November, right before the release of patch 7.4. Either at Fanfest or as part of the MSQ in patch 7.4, players will discover the next expansion will have players continue to search for treasure in the frozen waters of Blindfrost, which is north of the continent of Othard. Yes, I think we're returning to the east to visit Doma once again.

Finally I will repeat one of last year's predictions hoping I was just a year early. When cosmic exploration finally comes out I expect the feature to resemble housing more than island sanctuary did. I do think we will also see a restoration project in Garlemald at least teased sometime during the year if not in patch 7.4.

CCP Games Begins Its Seventh Year Owned By Pearl Abyss

Time really flies, so much so I almost forgot another anniversary. The acquisition of CCP Games by Pearl Abyss was finalized in mid-October 2018. I was at EVE Vegas seven days later and if someone had told those I was with the Icelandic studio would engage in more video game development than the much larger Pearl Abyss over the next six years, I think we would have laughed.

But looking back, that's exactly what happened. Sure, the mobile game we played at the convention, EVE: War of Ascension, died a little-noticed death in 2019. My memory is a bit hazy, but CCP's new mobile game launched on Tuesday, EVE Galaxy Conquest, sounds a lot like the first planned mobile game set in the EVE universe.

CCP Games also partnered with Chinese gaming giant NetEase not only on running the Chinese EVE Online shard, but in producing a new mobile game. The transfer of the game from Tiancity was finally approved in March 2020, with the operation of Serenity restarting a couple of months later. But EVE: Echoes, the mobile game licensed and developed by NetEase, launched in August 2020. Looking back, these two moves worked to ensure 2019 was CCP Games worst revenue year under Pearl Abyss' ownership. Not bad for a studio many believed was dying at the beginning of 2018.

Future game development is being performed in-house. In addition to keeping EVE Online up-to-date with two expansions per year beginning at the end of 2022, the studio currently has two games undergoing player testing. The first, EVE Vanguard, is CCP's fourth attempt at creating a lasting first-person shooting game set in the EVE Universe. The game has undergone player testing all year and I would not be surprised if a release date was announced at the upcoming Fanfest in May. 

The second game is EVE Frontier. The oft-derided blockchain-based MMORPG is currently under development having missed the "blockchain games as flavor-of-the-month" wave from a couple of years ago. While I'm under an NDA, I can say the Phase V playtest begins on 7 November. 

On the other hand, CCP Games' parent company Pearl Abyss has not pumped out the content like the developers out of Iceland, Shanghai, and London. Of the three planned games the South Korean company announced, only Crimson Desert is still under active development. Work on DokeV was put on hold in order to concentrate on launching Crimson Desert. And as for Plan 8? The game is barely visible in the pipeline, at least on Pearl Abyss' quarterly earnings calls for investors.

Even on the publishing front our overlords in Anyang are playing catch-up to their not-so-newly acquired company. Much of the increases in profits over the past few years were due to moving the publishing of the Black Desert franchise internally. And as for China, Pearl Abyss switched in-country partnership to Tencent in May, which coincidently led to approval to operate Black Desert Online in China in June. BDO may begin operations in the world's second largest market at the end of 2024 or sometime in 2025.

I'm two weeks late to the party, but I haven't seen anyone make a big deal (or even mention) the 6th year anniversary of Pearl Abyss' acquisition of CCP Games. And given the need of CCP to go out and acquire on its own $40 million to help develop EVE Frontier, perhaps the oversight is warranted.

Pearl Abyss Q2 2024 Earnings Call

On Thursday in South Korea, Pearl Abyss held its earnings call for the second quarter of 2024. The company experienced a quarter-over-quarter revenue decline of 4.2% down to ₩81.8 billion ($59.6 million), although the total was up 4.3% compared to Q2 2023's revenue of ₩78.4 billion ($59.6 million). 

The ₩81.8 billion of revenue recorded last quarter was the second lowest amount since the first quarter of 2018 which recorded ₩75.4 billion ($70.3 million). In addition, Pearl Abyss recorded another operating loss, the third in the past five fiscal quarters. While a ₩5.8 billion ($4.2 million) loss is bad, the amount was less than half the ₩14.1 billion ($10.7 million) recorded in the second quarter of 2023. The CFO explained the losses were due to Pearl Abyss not capitalizing development expenses during the past quarter. When asked by a financial analyst if the situation would improve in the second half of 2024, the CFO left open the possibility of future operating losses as the company continued to work on developing games.

After a good first quarter the Black Desert IP experienced an 11.3% revenue decline down to ₩60 billion ($43.7 million). Still, year-over-year revenue increased by 6.2%. But surrounding news was not very good. Despite receiving a license from the Chinese government in June to operate Black Desert Online on the mainland, the game will not operate in China in the third quarter. The company did state they hoped to launch shortly after Chinese Thanksgiving, which this year is in mid-September.

In other Black Desert news, Pearl Abyss is still working on upgrading Black Desert Console to run on the latest generation of consoles. As BDC is the only game running on consoles, we know the console version experienced a 21.4% revenue decline quarter-over-quarter. 

On the other hand, the EVE IP did very well in the second quarter based on the Equinox expansion. Quarter-over-quarter revenue increased by 20% in South Korean currency or 16.3% in U.S. dollars. The ₩21.6 billion ($15.7 million) is the highest quarterly revenue in South Korean won since Pearl Abyss acquired the Icelandic game studio in October 2018. The company does use U.S. dollars in its financial reports, so the $15.7 million in the second quarter is only the most since Q3 2021.

When the subject turns to new games, CCP Games is working on three out of the four games currently under development. EVE: Galaxy Conquest is still on track to launch in the second half of 2024. The first person shooter EVE: Vanguard is undergoing public testing and will introduce a new map during the third quarter. Finally, Project Awakening, CCP's blockchain game under development, is undergoing player testing.

One of the analysts on the call asked if the revenue trend for EVE is a temporary thing and where the company expected revenue to eventually settle. The company indicated it expects the revenue to reach ₩20 billion every quarter.

After years of asking, analysts finally received news on Crimson Desert. Pearl Abyss will take 30-minute playable demo to both Gamescon in two weeks and G-Star in November. The company also plans to show an hour long gameplay video at future conventions. The executives on the call would not give out possible release dates, referring the analysts to watch for announcements from the Crimson Desert marketing campaign.

A note about currency conversions.

All currency conversions in this blog post were performed using the rates displayed on the Federal Reserve Bank of St. Louis website using the average quarterly exchange rate. As a check on the accuracy of the methodology, I compared the revenue amounts listed on the quarterly investment calls of 2023 with the actual figure from the tax filings released by the Icelandic taxing authority this week. For 2023 I came up with revenues of $55,865,000 and the actual game revenue reported to the Icelandic government was $55,735,000. The difference was 0.2% more, in case the accuracy of the methodology is a concern.

Pearl Abyss Q3 2023 Earnings Call

On Thursday morning Seoul time, Pearl Abyss held its earnings call for the third quarter of 2023. The South Korean video game maker posted revenues of ₩84.9 billion ($62.8 million). The amount was an 8.3% increase from the second quarter of 2023 but a year-over-year (YoY) drop of 12.7% compared to Q3 2022.

The big news is Pearl Abyss' return to profitability. In the third quarter, Pearl Abyss recorded an operating profit of ₩2.1 billion ($10.7 million) and net profit of ₩15.0 billion ($11.1 million) for the months of July, August, and September. For the first nine months of 2023, Pearl Abyss posted an operating loss of ₩10.9 billion ($8.3 million) but was in the black with a net profit of ₩20 billion ($15.1 million). 

The driver of the good financial news was Black Desert Online. The 21.1% quarter-over-quarter increase to ₩68.4 billion ($50.6 million) was the first quarterly increase in revenue since Q3 2022. Year-over-year, Black Desert IP revenue fell 10.7%. The executives on the call credited the Land of the Morning Light expansion. BDO saw a 36% increase in users during the third quarter.

On the other hand, EVE IP revenue fell 20.8% QoQ to ₩16 billion ($11.8 million). Year-over-year, EVE revenue fell 17.5%. Pearl Abyss blamed the decline of the "base effect" of the Viridian expansion. That is, returning to normal revenue levels following an expansion's launch.

A big reason for the return to profitability was a 10.5% decrease in operating expenses, led by an 18% decrease in labor costs. Pearl Abyss told analysts on the call the decline was due to a one-time, ₩8 billion incentive payout in the second quarter inflating labor costs.

The explanation does not sound entirely true. In the third quarter, headcount fell from 1,341 down to 1,293 compared to the previous quarter. Developer headcount fell 7.1% from 801 to 744 while business and other staff increased by 9 people. The decline is part of a longer term trend. Since the end of 2021, employee headcount has fallen from 1,572 down to 1,293, a decline of 17.7%.  The amount of development staff fell from 983 down to last quarter's 744, or 24.3%.

For upcoming content, Pearl Abyss could point to Black Desert Online's new "War of the Roses" and EVE Online's upcoming expansion Havoc, both releasing in the fourth quarter. The EVE IP is also expanding in Q4, with a 4x strategy mobile game EVE: Galaxy Conquest soft launching in the fourth quarter. An FPS project, EVE: Vanguard, will also hold an open beta test in December.

Of course, analysts asked about the long delayed Crimson Desert. After spending all year telling investors the game would launch in the second half of 2023, Pearl Abyss had to admit the game was not ready for launch. The good news about Crimson Desert is the game will make an appearance at the G-STAR games conference next week. From the answers on the call, I'm not sure Pearl Abyss will introduce a new trailer.

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.

Pearl Abyss Q3 2021 Earnings Call

Yesterday Pearl Abyss hosted an investors' call covering the company's performance for the third quarter of 2021. For the first time since the first quarter of 2020 Pearl Abyss posted increased quarterly revenue. Unlike previous quarters, I won't dive deeply into the numbers as the call provided a significant look into the company's business plans going forward. The key phrases during the call were "play to earn", NFT, and the metaverse.

First though, a look at the present and recent past. Most of the news about the Black Desert IP concerned Black Desert Mobile. The executives on the call boasted of BDM utilizing AMD FSR technology. Pearl Abyss loves their graphics quality so I found an explanation of what AMD FSR adds to a game.

AMD Fidelity FX Super Resolution (FSR) is a type of rendering technique that looks to boost framerates in games and enable quality high-resolution gaming. It’s also a rival to Nvidia's DLSS, though the two differ quite a bit in how they function. FSR works by rendering frames at a lower resolution and then using an open-source spatial upscaling algorithm to make the game look as though it's running at a higher resolution. DLSS uses an AI algorithm to accomplish similar results, but it only works on Nvidia's RTX GPUs, some of the best graphics cards right now. FSR in contrast will work on just about any GPU — we've confirmed it runs even on Intel integrated graphics, for example. 

Pearl Abyss also explained about the current activity leading up to launching Black Desert Mobile in China. Pre-registration for the game began in August with a focus group test completing in October. The game is currently undergoing a technical test to determine compatibility with the wide range of devices in China. The test is scheduled to end on Friday.

For EVE, the focus on the recent past focused on the new player experience in the third quarter. In addition to the  and programs to integrate new players into the game introduced in EVE Online in the third quarter. PA also pointed to the new tutorial introduced in EVE Echoes.

In the third quarter, Pearl Abyss revenue grew by 8.9% compared to the quarter before. After a quarter with an operation loss, PA returned to profitability with a ₩10.2 billion ($8.6 million) operating profit and ₩26.8 billion ($22.6 million) net profit. 

When looking at IP revenue, Black Desert experienced an increase of 2.3% in Q3, earning ₩70.9 billion ($59.8 million). Year-over-year, Black Desert revenue fell ₩25.3 billion ($21.4 million), or 26.3%.

The EVE IP did better, with revenue up 3.9% quarter-over-quarter, or ₩700 million ($591,000). Revenue was down YoY by ₩2.5 billion, or 11.7%. The EVE IP result was expected as in Q3 2020 not only did EVE Echoes launch, but the quarter was the first full quarter following the relaunch of EVE Online in China.

Now for the subjects Pearl Abyss seems to see as future drivers of revenue. The first is the concept of "play-to-earn". An analyst actually brought up the term and noted that EVE Online is a perfect platform for such a game. According to an article from CryptoPotato, play-to-earn is a business model where users play a game and earn cryptocurrency while doing it.

It’s [play-to-earn] a very powerful psychological model because it combines two activities that have been driving mankind since the dawn of time – making money and entertainment.

The key component in this model is to give gamers ownership over certain in-game assets and allow them to increase their value by playing the game actively. Usually, in the crypto world, defining the ownership and even transferring it is possible through the use of non-fungible tokens (NFTs).

We have an in-depth guide on what NFTs are, and you can check it here.

By taking part in the in-game economy, players create value for other players in the ecosystem and for the developers. In turn – they receive a reward in the form of potentially appreciating in-game assets. These assets can be absolutely anything ranging from appealing characters with variable scarcity to a certain type of cryptocurrencies.

From the definition of play-to-earn we get to the subject of NFTs (non-fungible tokens). Pearl Abyss will look for opportunities to introduce them in both Black Desert and EVE. The presentation pointed out that EVE's currently running Alliance Tournament is providing NFTs. In fact, EVE's tournament scene is Pearl Abyss' first effort to profit off of NFTs. The presentation disclosed to the analysts that Pearl Abyss is partnering with Tezos for this first effort.

Pearl Abyss told analysts that they had participated in blockchain technology since 2019. In discussing future plans, PA stated:

In the case of CCP Games, our subsidiary, as the currently ongoing alliance tournament, as a reward we have been offering cryptocurrency, and we are reviewing many diverse business opportunities. However, there are different regulations for different countries and these are vastly changing so we are going to be reviewing actively the related risks and we will be sharing with you our ongoing procedures.

Finally, Pearl Abyss is looking at the Metaverse. The concept seems a very nebulous concept that means different things to different people. Wikipedia explains:

The metaverse (a portmanteau of "meta-" and "universe") is a hypothesized iteration of the internet, supporting persistent online 3-D virtual environments through conventional personal computing, as well as virtual and augmented reality headsets. Metaverses, in some limited form, are already present on platforms like VRChat or video games like Second Life.

Current metaverse ambitions are centered on addressing technological limitations with modern virtual and augmented reality devices, as well as expanding the use of metaverse spaces to business, education, and retail applications. Numerous entertainment and social media companies have invested in metaverse-related research and development.

The metaverse has come to be criticised as a method of public relations building using a purely speculative, "over-hyped" concept based on existing technology. Information privacy and user addiction are concerns within the metaverse, stemming from current challenges facing the social media and video game industries as a whole.

Pearl Abyss stated they are developing DokeV to connect into the Metaverse. Such a plan could explain why the company decided to not make DokeV an MMO. As part of the company's move into the Metaverse, Pearl Abyss invested $3 million into the metaverse entertainment company Hyperreal, as part of a $7 million round of funding last week. 

With the versatility of the HyperModels, Hyperreal is unlocking a new expanse of opportunity for talent and brands.  HyperModels are interoperable across digital platforms including mobile, interactive applications, augmented reality, virtual reality, social media, and immersive screen displays. HyperModels also are capable of becoming “living” NFTs that are animated, adaptable and customizable.

"Hyperreal has proven its industry-leading expertise with its HyperModels, and we believe this strategic partnership will help provide a more immersive experience for our players in the Metaverse," said Kyle Kyungyub Kim, Head of Investment for Pearl Abyss.

Pearl Abyss Q2 2021 Earnings Call

Yesterday Pearl Abyss held a conference call to discuss its Q2 2021 earnings report with investors. The financial results were less than stellar.

A steady decline

For the fifth consecutive quarter, Pearl Abyss recorded a quarter-over-quarter decline in revenue. The ₩88.5 billion ($76.5 million) in operating revenue represented a decline of 12.3% compared to the first quarter of 2021 and a year-over-year decline of 32.8%. The operating loss of ₩6 billion is the first time Pearl Abyss has reported a loss on a conference call. Pearl Abyss lists earnings presentations covering financial periods going back to Q1 2017.

Revenue for the last year broken down by category

From the questions asked by the analysts on the call, the game with the largest decline in revenue was Black Desert Mobile. The information on the call only broke the revenue sources down by intellectual property, region, and platform. Despite not breaking down revenue by game, the information does point to Black Desert Mobile.

The big decline was in the Black Desert IP. Revenue for the IP fell down to ₩69.3 billion, or $59.9 million. The result was a drop of 16.4% quarter-over-quarter and a decline of 37.8% year-over-year. Pearl Abyss did report that revenue from North America and Europe from self-publishing was still low due accounting rules. The company could only recognize 64% of Black Desert Online sales in the second quarter. The CFO stated he hoped all sales would be fully recognized in Q4.

One big piece of news Pearl Abyss told investors was that it had received a license on 28 June to operate Black Desert Mobile in China. Pearl Abyss is partnering with iDreamSky, a large Tencent-backed company. PA also stated it is attempting to obtain a license to operate Black Desert Online in China as well.

The EVE IP (EVE Online & EVE Echoes) recorded a 2.8% increase in revenue compared to the first quarter of 2021. The ₩18.1 billion ($15.6 million) earned still represented a 4.2% decline in revenue compared to the second quarter of 2020. 

The upcoming highlights for Q3 are very sparse.

On the EVE Echoes front, Pearl Abyss told investors the mobile game launched in China on 5 August. The company told investors it had 6 million pre-orders and 1 million users on the first day, with the app store revenue ranking reaching 25th place.

Platform revenue after converting percentages to won.

Looking at revenue by platform gives an indication of how much Black Desert Mobile has fallen over the past year. In the PC games category, revenue increased by 6.6% compared to Q1 2021, although it did suffer a year-over-year decline of 1%. Mobile revenue, on the other hand, fell by 42% from Q1 to last quarter. Compared to the second quarter of 2020, mobile revenue fell by 62.6%. 

Besides BDM, the other big topic the analysts on the call wanted to discuss was the future of Crimson Desert. While denying a lengthy delay in the launch of Crimson Desert, the company did confirm the game will launch before two other games in development, DokeV and Plan 8. Presumably that means the launch of the other two games will be delayed as well.

Overall, not a good quarter for Pearl Abyss. But if the price of stock is any indication, investors had already factored the news into the price. The call took place before the market open and the price closed down 0.73% to ₩68,100.

Pearl Abyss trading history on 11 August 2021

Black Desert Online: The End Of The Season And Final Thoughts

Wednesday marked the end of the winter season in Black Desert Online. Once I reached level 59 on my witch Tuesday night, I went a little farther, rode to Heidel, and logged out while standing next to Fughar. I now have 104 energy and 188 contribution points after playing over 90 hours (not including AFK time) in March.

My original plan was to spend $10 to buy a value pack and play a second month. I wanted to restart and expand my worker empire from the first time I played. After a month, though, I don't really want to play BDO anymore. I want to get back to Final Fantasy XIV and EVE Online. I've already done life skilling in BDO and I enjoy the economic activity in the other two games a lot more. With that said, I should finish up with a final post about my latest experience in BDO.

The Season: The concept of the season has its ups and downs. On the positive side, seasons allow players to create alts in a PvE environment. The concept of having beginning armor and weapons to practice concepts like enchanting is also good. 

The big problem with seasons is time. Jumping into a season at the beginning gives 3-4 months to level and do everything, giving players plenty of time to run around. I wound up coming back to BDO as a result of Pearl Abyss taking over as publisher of the game in the west. As a result, I was rushing to try to level as fast as possible. But overall, I think Pearl Abyss should bring back seasons.

Combat: I never did feel comfortable with the controls. I pressed so many wrong keys, even the AI managed to kill me a few times. With a character over level 50, I would have to compete with others in the open world now that I'm on regular servers. I'm so bad, I'd be easy pickings, assuming I was able to gear up properly in the first place. People who like action combat and using keybinds would definitely fare better than I did.

Autopathing: The autopathing function in BDO isn't really that good. I have wound up going into really bad places. One would think autopathing would keep one travelling on the roads, especially over long distances, but that's not what happens in BDO. Stopping at a cliff face is bad enough. One time, the autopath function ran me into an object and the only way out was to use one of the teleport maps to get myself unstuck. 

Maps: The mini-map in BDO is fine. If I could have figured out a way to expand the size to make it more readable, I'd give the mini-map higher marks. The larger maps though could use some improvement. Unless something major changed, the larger map is good for lifeskilling. I did wind up buying some storage in towns, so I can tell that works well. The problem comes when trying to use the maps for navigation. I think trying to use the large map for navigation led to some of the autopathing issues I experienced.

Personal Inventory & Storage: First, I have to note that I purchased inventory slots the first time I played BDO. I didn't buy account-wide inventory, so I shouldn't have received any extra slots on my new character. With that stipulation out of the way, I leveled a character from 1-59 without purchasing any inventory space. Pearl Abyss did provide additional inventory slots both via quests and daily rewards for returning to the game. I also purchased the maximum 8 inventory slots available from the loyalty store. 

Black Desert Online is unusual in current games because they also keep track of weight. One of the reasons for purchasing a value pack is the additional 200 pounds characters can carry. I did have to carefully manage the weight and purchase a 25 pound weight allowance from the loyalty store to get by. 

Because I already had a worker empire built from my first time playing the game, I already had town/city storage available. That's right, storage obtained in-game is account-wide. One of the beneficial nuggets of knowledge I received watching YouTube videos was the importance of running through the main story questline in order to get contribution points. In-town storage is purchased with contribution points as well as from the cash shop. I did manage to acquire enough contribution points to purchase enough storage without resorting to pulling out my credit card.

I do have to point out that part of not wanting to play anymore was due to my personal inventory beginning to become inadequate and requiring a visit to the cash shop. I also have to point out that the game starts flashing at the player when either the weight carried reached over 100% or runs out of inventory slots. As in, a button pops up to the cash shop. That button is way too tempting to push.

Pets & Servants: Pets and servants are two additional features in BDO I like conceptually. Pets not only loot the field so you don't have to, they also provide buffs and server as early warning against danger. Players can deploy 5 pets at a time. In my run up to level 59, I obtained 3 pets. Since pets are shared account-wide, the 2 pets I received the first time I played meant after 4 weeks I was running around with 5 pets for which I didn't pay any money. 

A feature I didn't run into the first time I played was servants. I love the concept. A servant can either run one item from a player's inventory to either the nearest town storage or the nearest marketplace for sale. I received two servants from doing the main story questline. All other servants are obtained from the cash shop. Did I mention there is no limit to the number of servants can own and they only cost 1200 pearls ($12) each?

Enchanting: The enchanting system required to get the most out of a character's gear is downright scary. I enchanted my Naru gear up to PEN and traded the set in for Tuvala gear so experienced the process. Honestly, I can see how players can spend hundreds of dollars upgrading their gear. I want nothing to do with that.

Appearance: Following the main story questline resulted in receiving 4 sets of appearance gear. I like the fact that one doesn't have to visit the cash shop in order to look decent. One part of the appearance gear I don't like is appearance gear has stats on it.

The Pearl Shop: I have to say, BDO's cash shop is very well done, if a little too expensive for my taste. The value packs are appropriately priced at 1500 pearls ($15), which is comparable to a subscription in other games. But many of the packages are definitely not microtransactions. Honestly, if someone wants to avoid spending a lot of money in a video game, run away!

As the title of the post implies, this post only covers content I personally experienced running through the season. As such, I left out subjects such as housing, resource collection, crafting, and other life skills that make up what some call the worker empire. I'm going to stop playing now and concentrate on the content coming to both Final Fantasy XIV and EVE Online on April 13. I have to say I didn't enjoy BDO as much as I do the other two games. But I did want to record my impressions as I have the feeling I may return to BDO sometime in the future.

Black Desert Online Week 3: Harvesting Side Quests

Another week another two levels gained in Black Desert Online. I've transitioned from following the main quest line to going back and following side quests. My thoughts on the experience are below.

Progress: I finally completed the Medina quest line and reaching level 56, which signaled a switch to going back and completing all the side quests with experience gains. But before doing the side quests, I did two important quest lines. The first was the Awakening quest line, which resulted in gaining access to a new set of skills and a weapon. 

The second was the Chenga Tome quest line, which I complained about Tuesday. I realize that the 30% bonus to combat XP when I complete quests is nice. But 22 non-combat quests, in a game where combat is arguably its strongest selling point, doesn't make sense. But I got through the experience.

Story: I'm off the main quest line now, and the Chenga Tome quest line was weak. But I like the tracking down the evil witch thread I was on. If I wasn't in a hurry to level due to the end of the season approaching, I might have run through the first block of quests in Valencia. If the side quests don't get me up to level 59, I may need to do so anyway.

Equipment: By finishing the Medina quest line, I also unlocked the ability to get the Tuvala gear from Fughar. I'm now rocking Tuvala PRI level armor and weapons. When I completed the Awakening quest line, I also received a Tuvala TRI level Awakening weapon. I also picked up a couple of nice accessory items.

Awakening: I was a little taken aback at having to make the choice between the Awakening and Succession skill sets so suddenly. I eventually decided to go down the Awakening path because Awakening seemed the natural progression.

So far I'm not so sure how I feel about the skills. My problem, as always, is learning new key combination. I have a bad habit of hitting the wrong keys and casting Blizzard. But Voltaic Pulse is easy enough to cast (Shift+F) and I like the animation where I cast magic arrows as I punch a mob. I do need to get better at casting Fissure Wave (S+LMB+RMB).

I'm not sure of the technical name in BDO, but I can now summon a pet. I do like the ability. I just need to figure out what I need to do to keep Keeper Tett up instead of Gorr.

AFK Play: I attempted to do my first AFK task: leveling my strength. Basically, players can make their characters stronger by having them march around town with a trade pack on their backs. By leveling strength, characters can carry around more loot.

I failed pretty bad. I thought I'd do well by staying logged into the game all night, but I only reached level 2. Apparently, someone decided to park their horse in my path, and my character marched into the horse for hours. Oh well, lesson learned. Next time I'll pick a better located path.

Cash Shop: The screenshot of my login page shows I haven't hit the cash shop yet. I almost purchased a $50 pack with an outfit, a pet, and a bunch of inventory expansion, but I held out until Pearl Abyss removed the offer. I did, however, use loyalty points to pick up 8 inventory slots and increase my weight capacity by 50 lbs. I eventually will wind up buying a 30-day value pack, but I won't have to until early April.

All in all, I think I'm making decent progress. The videos I see say that it shouldn't take long to level a character. One YouTuber has a live stream where he levelled a character from 1-60 in 15 hours. I doubt I'll get to level 61 by next week, but I'll give it a shot. But after the end of the season, I'll be able to relax and not put so much time into leveling.

22 Non-Combat Quests In A Row Is Too Much

Sometimes game developers need to recognize their strengths and weaknesses. Take storytelling. Square Enix and the Final Fantasy franchise is famous for its stories. Final Fantasy XIV continues the tradition, especially after A Realm Reborn. The Shadowbringers expansion may have spoiled video game stories for me going into the future.

CCP has a different take on storytelling. They throw out a bunch of tools and let the players create tales that wind up in history books. Instead of stories that all players who ever play EVE Online can experience, the developers create series of live events that can last years to tell the story of the universe. The stories players helped shape around wormholes, incursions, and the Triglavian creation of Pochven are probably better than the developers could have crafted alone.

As I've written before, the storytelling in Black Desert Online is serviceable. At its best, the quest design makes the player feel powerful and the story keeps killing 50, 100, or even 200 mobs from feeling like a grind. Instead, at times the story makes me feel like a 1980s action hero mowing through the multitudes toward an objective. But last night, I ran into a quest line that felt like some of the quests in A Realm Reborn that Square Enix recently removed from the game.

In the leveling guide I'm using, the next thing I needed to do was obtain the Chenga Tome, which provides a 30% bonus to combat experience given by quest rewards. The Chenga Tome quest line consists of 22 quests, none of which are combat. Fetch quests, riddles and puzzles. Check. Almost impossible to find items? Check. But I didn't have to kill a single mob.

In FFXIV, Square Enix can get away with maybe five or six quests like that before I start rolling my eyes. After ARR, Square Enix realized they have to mix in some combat and adjusted their story accordingly. In EVE, I've done that many courier quests in a row, but CCP doesn't make me do that to myself. But stringing that many non-combat quests together in BDO? The only reason I did them in one night was to make the next step of the grind go faster. The experience was painful.

I started out noting different types of storytelling as the story influences quest design. In FFXIV, Square Enix has solid storytelling which gives quest designers flexibility. In EVE, CCP doesn't have storytelling at the character level, meaning a player can do whatever they feel like doing at the time. BDO is different. The story is serviceable, leaning towards supporting combat quests better than the other types of quests. Making someone do 22 non-combat quests in a row? Pearl Abyss, please don't do that to your players again.

Two Weeks Back In Black Desert Online

I continued my journey in Black Desert Online last week. I may make Thursday's my BDO day, as I really do need to keep track of my progress in the game. I'm feeling better about playing BDO after two weeks back compared to when I stopped playing a couple of years ago. My impressions about the past seven days is below.

At level 55 after two weeks

Progress: I ran into a brick wall leveling upon reaching level 55 on Monday. I think I finally out leveled the story as all the mobs I kill are now greyed out. Then again, my initial 24 hour boost is over. I finished up the Calpheon quests, I think. I did get a message that exploration of Calpheon is complete. I'm now doing quests under a block titled "Level 51". I need to at least finish the first block of quests in Valencia. Hopefully I can have that finished for next week's post.

Story: I have to admit, the slower I progressed, the more I just clicked through the text of the story. I do know that I'm chasing after a well-dressed witch. A very powerful, well-dressed witch. 

A content gate: I ran into a content gate. Once I hit level 50, I started getting packs to aid in levelling every level instead of every 5 levels. When I hit the level 53 box, I was unable to open the box until I finished the last of the Calpheon main line quests. Given how many videos I've watched stating that grinding is such a good way to level, I was a bit surprised.

Enhancing equipment: In BDO so far, I've experienced that your weapons and gear level with you through the use of enhancements. The process is similar to over melding in Final Fantasy XIV, except more hardcore. Unlike in FFXIV, enchantment levels can disappear upon failure. I've managed to get my Naru gear up to PEN and need to finish the Mediah quest line before I can upgrade to Tuvala. Yes, another content gate. One that, if I understand correctly, requires finishing 126 more quests. And I thought the old end of A Realm Reborn was bad.

My Naru gear is up to PEN

Pets: One of the reasons I quit playing BDO back in 2018 was the requirement to purchase pets. Pets are a way to automatically loot the field, in addition to give some minor boosts. The more pets, the faster one can grind. Players can deploy up to five, and with the hawk I picked up Tuesday night, I'm up to four. I don't think I have to buy a fifth, unless the pet is cute.

Mounts: Another concern I had was the issue of mounts. I had two Tier 3 mounts and a donkey from the first time I played. During my first week back, I picked up a donkey. But Monday, I picked up two Tier 5 horses as quest results. Perhaps more importantly, I got one male and one female. I'll have to check on the possibilities for horse breeding.

Combat: After the first week I was unsteady during fights. I just felt limited by the skills I knew how to use. Over the past week, I learned and began using two more spells. The first was Spellbound Heart. The second, Healing Aura. Both spells can be cast out of combat and I use them more for health and mana recovery between fights than rely on them during combat.

Once I hit level 50, I saw an interesting mechanic. From level 50 on, players can modify certain spells on even numbered levels. I added increased crit chance and attack/casting speed to Magic Arrows and increased crit chance and defense values to Chain Lightning and Fireball. So far the combination has worked fairly well when I get surrounded by about 10 mobs.

Buffs: On the plus side, I have so many experience scrolls and other methods of getting buffs that I don't feel I need to visit the Pearl Shop to buy experience buffs. On the negative side, I don't think I'm using enough. I also have a couple of weeks of the backpack buffs and other buffs that I might purchase from the cash shop with the $9.50 in pearls I had carry over from the first time I played.

Appearance: I just have two things of note. The appearance items have stats. The set bonus for the in-game acquired sets is only +2 to attack/casting speed. The cash shop gear has better bonuses. The next is Merv's Palette, a set of dyes. The dyes look much better on the clothing in the appearance interface in which I applied them than on my character in the game.

I have two weeks until the season ends. I want to at least exchange my Naru gear for Tuvala and maybe even enhance it a little. After that, I need to figure out how to play on a regular instance. I plan to switch over to doing life skills and dodging people who want to PvP while I try to make a little silver.

Impressions After One Week Back In Black Desert Online

Last Thursday I created a new character in Black Desert Online, a witch, and leveled her up to level 47. I lost track of exactly how much I played. But I received a 24 hour buff when I started and still have 3 hours to go when I logged out for the night. My goal is level 61 in order to get a couple of accessory pieces, make sure I have completed the main story questline into Valencia, then turn to life skills and improving my equipment.

Level after one week

I thought I'd jot down some notes about my experience so far. Someone might be interested. But my thoughts are of someone who played for a couple of months and then left two years ago. I'm not a brand new player.

Story: Let me just get this out of the way. To me, the story is serviceable. Not great, but not something that makes me want to pull my hair out. 

I divide the story into two main parts. The first part involves your relationship with the black spirit. At my current point in the story, I gather I made a deal with the black spirit. The only thing is, I can't remember what the deal is. What I do know is, as I wander through the game, I become stronger, and so does the black spirit. I like the way the spirit has gradually changed form.

The second part is traversing the world. I've completed a few sub-arcs, but nothing really amazing. Well, the fight against the harpies in the fortified city was pretty cool. In general, though? Not too memorable.

Servers: I'm not sure what the difference between servers and channels is, and I'll probably get flamed for it. I rolled a character on a season server. The season servers have different rules and different types of equipment. I was also surprised that season servers don't have PvP except for organized guild wars except on one channel. The one thing about the season server is the season ends at the end of March. 

I do have to note something about the channel list. I noticed that some channels have the PvP symbol. I wonder about PvP in the game. I'm still only level 47 and can't participate in PvP until level 50. Just how much PvP happens in this PvP game?

Combat: I'm pretty much lost with combat. I figured out how to cast a few spells, consume health potions, and that's about it. The spells I use are:

• Chain lightning (Shift+Right Mouse Button)
• Mana Absorption (Shift+Left Mouse Button)
• Magic Missle (Right Mouse Button)
• Medium Health Potion (1 on the quick bar)

Occasionally I use my staff and cast a fireball. That's it. And with that limited tool kit, I'm managed to get to level 47. There are a lot more spells I could use, and I really need to learn how to use them.

Combat is very fluid and I've racked up some serious body counts in practically no time at all. Still, I would think that I'd need more skill than dashing around a boss monster spamming magic missiles. At this point, though, I can live with easy mode.

The User Interface: The UI is pretty busy and I'm still finding new elements and functions. For example, it wasn't until Tuesday that I found the NPC search function. One of the most frustrating parts was the quick bar. I placed Fireball I in a slot and discovered I still needed to press the left mouse button in order to activate it. I think over the next week I may finally figure out the quick bar.

Inventory: I'm pretty sure I may have purchased some inventory slots, but only for my one character. Not for the entire family (aka account). Having existing farm and housing also came in handy with handling inventory. The one thing I was surprised at was the amount of inventory slots I received from the black spirit for completing quests. Inventory is a very monetizable feature.

Speed of Progression: I think I'm progressing pretty quickly. Even in my 40s, I could manage to gain 3 levels in a hour with the aid of experience buffs that come from either daily login rewards, quest drops, or from the every five level booster package. If I have everything figured out correctly, I'm level 47 doing level 42 quests. Not that bad a disparity. I also haven't had the urge to go to the cash shop in order to buy experience boosts.

Enhancing Gear: Right now I'm working on Naru gear and haven't really started enchanting yet. But I can see how the RNG factor could drive people crazy. I'm pretty sure players can go to the cash shop to eliminate some of the pain.

Clothing/appearance: The cash shop has a wide variety of outfits. That said, I have received a couple of nice outfits. 

Buffs: I noticed one interesting thing about buffs in BDO. The timer stops when I log off. I'm used to Final Fantasy XIV where the buffs keep counting down after I leave the game.

Back To Black Desert Online

Yesterday, I mentioned I'd like the whole monetization soap opera in EVE Online to stop. I shouldn't wish for something that is impossible. Instead, I am going to take the other branch in the timeline: Pearl Abyss' plans for Black Desert Online. Specifically, self-publishing the game in the west.

Pearl Abyss has seen good success and increased profitability when the company began publishing the game in Asia themselves. For example, the company noted on its Q2 2020 earnings call that the game saw a record peak concurrent user mark in Japan when Pearl Abyss started self-publishing the game in the country in April 2020. When PA announced it was pulling the trigger and Kakao Games would stop publishing the game on 24 February, I jumped on the news and transferred my account to Pearl Abyss' servers.

The first time I played Black Desert Online was back in 2018 around the time of the PA's purchase of CCP Games. I managed to level a Valkyrie up to level 31 before I started dabbling in life skills. I eventually stopped playing when I realized the game wanted more money than I was willing to give. Basically, BDO was a pay-to-win game. Not pay-for-convenience. Not pay-for-progression. Pay-to-win.

As someone who is interested in how Pearl Abyss monetizes games, I started playing BDO again last night. I want to see if the way PA runs the cash shop differs from the way Kakao Games ran theirs. I figure I should give PA 2-3 months to make changes. In the meantime, I can use the time to level a character up. Doing so is important, because I will then have some sort of knowledge of the game to use when looking at the cash shop offerings. I'm hoping I can gain the experience in three months.

My New Character

Instead of trying to learn how to play a Valkyrie again, I decided to create a Witch and begin again from level 1. I then discovered a nice thing. All of my money & life skill work I did back in 2018 is shared with my new character. Having 308 million silver and the occasional farm product appear on my screen was a nice bonus. I also found 950 pearls, which is the BDO cash shop currency. If I recall correctly, that is worth $9.50. I have the feeling that will come in handy.

I also came into this latest effort with a plan. I found a YouTube channel, imPansy, and decided to go with his leveling plan. Instead of doing what I usually do, I'll concentrate on leveling to 61, then circle back to start doing life skills.

After creating my new character and adjusting some settings, I started adventuring by doing the main quest line. I played for two hours and managed to reach level 12. I would have progressed further if I could get used to the user interface. I still have to look at the screen to figure out which buttons to push to attack. Even movement still feels unnatural. I think if I weren't playing the game as part of a blog project, I would have rage quit after about 30 minutes. 

Still, once I get used to the controls, I think I'll enjoy the class. Casting fireballs just feels so satisfying. I am looking forward to getting a magic missile attack that knocks opponents off their feet. I also like an attack that steals mana from mobs. Overall, the Witch spell rotation looks interesting. I just need to find out where to train my skills in addition to remembering which buttons to press.

I'm not sure how much I will post about my experiences in Black Desert Online. The first metric I want to know is how long it takes to reach level 32. Recently in Final Fantasy XIV I began leveling my two Arcanist classes, the Scholar & the Summoner. I was able to do so over the course of a weekend. I think I can reach that level in BDO by Monday as well, But I'm wondering if it will take 12 hours or much less. I might post the answer next week.

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.