Feb
23

AoC: The Bleed Continues

7 Comments

Before I go on with this, let me just again say that I hope I’m totally wrong regarding my outlook for AoC. I try. I really do try to remain as positive as I can but these guys just give me the heebie-jeebies. The latest news out of Funcom, besides them hiring more people (…./boggle…):

Funcom has reported its financial results for the fourth quarter, revealing an operating loss of USD 23.3 million, caused by a depreciation of USD 22.8 million due to the lagging performance of Age of Conan.

The poor performance is compounded by the announcement that the company’s chief financial officer, Olav Sandnes, has resigned from the position.

“Funcom is a company with a substantial potential based on a unique combination of skill sets in a fast growing global market. I wish Trond Aas and the rest of the organisation all the best in realising the full potential of the company,” commented Sandnes.

While Funcom’s cash position remains robust at USD 39.4 million, the company reported a full-year net loss of USD 33.8 million. According to estimates by DnB NOR Markets, subscriber levels for Age of Conan are below 100,000, reports E24.

So…it’s official now. From a financial perspective, AoC is in trouble. 2009 is not going to be much better for them with revenues coming in at around the same level of 6-9 million. Add to the picture that 2009 will suck ass in general and you get a perfect storm that will probably swallow Funcom up. I don’t see them posting anything better year-over-year for 2009 when; a) revenue is the same, b) their sub and sales numbers are worse than 2008, c) given the economic downturn…do you?

What’s really telling is that AoC subs are at or below the 100000 level mark…down from 400000 from when it launched (700000 copies sold). That’s lower than I thought. Honestly thought they had about twice that, which would probably give them what they need to make a very rough 2009…but I don’t see them doing it.

CFO resigning? ….oy.

D out.

P.S. Forget about the 360 version.

Posted in Age of Conan
7 Comments Posted by Darren

7 Responses to "AoC: The Bleed Continues"

  • Ko-master says:
    February 23, 2009 at 1:38 pm

    Umm … it’s easy to be completely negative when you miss this sentence from the same linked story,

    ” … but all is not doom and gloom. Funcom’s Q4 2008 subscription revenues from Age of Conan have shot up to USD 8.7 million, up from USD 1.2 million year-on-year,”

  • Scott says:
    February 23, 2009 at 1:48 pm

    I also read that the CEO purchased 250,000 shares in Funcom today, which is *usually* attributed as a positive sign in financial sectors.

    AoC also launched today in Russia and Poland. Funny how only negative stories make the news…

    I’ve been reading varied comments on their CFO ranging from “he’s been doing a great job” to “he’s been fudging their numbers and got caught” but it’s all forum speculators. Who knows, and I doubt the truth will come out publicly.

    Maybe it isn’t all doom and gloom over there. Personally, I am currently far more interested in checking out AoC on its 1-year anniversary than I am about looking at WAR again anytime in the foreseeable future.

  • Nat says:
    February 23, 2009 at 2:38 pm

    Doom and gloom, depends.

    Looks like they still have 30 million cash on hand and all losses on AoC have been written down. Even with less than 100,000 subs and revenue of close to 9 million that should be enough to fund the games continued development while they burn that 30 million on The Secret Word development.

  • Sente says:
    February 23, 2009 at 2:48 pm

    Darren, have you read their financial report?

    They make more money in the last quarter than Tabula Rasa did for the whole of 2008 pretty much. And people were upset that NCSoft was closing down TR…
    Based on the amount of money they have in the bank and what their expenses have been for 2008, they can still run the company at the same level for a year even if their revenue would be 0.

    The depreciation is a natural cause of action, since they do not expect the game to reach the same subscriber levels as they have originally calculated for.

    They certainly dipped quite a bit, but if they keep the current levels they will more or less break even for the whole year.

  • wilhelm2451 says:
    February 23, 2009 at 6:39 pm

    If 22.8 million out of a 23.3 million dollar loss is depreciation, they are probably just using the economic downturn to clean house and set up the books to look better going forward. If everybody else is losing their shirts, it is a good time to look poor and blame the economy for a quarter or two while you regroup.

  • Dathmar says:
    February 23, 2009 at 6:53 pm

    I can’t speak for the US (only Europe) but I have just started playing AoC and I can say that every server I have played on is really busy…lots of chat and lots of people about.
    I am not sure about what’s to come in 2009 / 2010 – but if my experience for the last few weeks is anything to go by – then I think AoC subscriptions might be on the up..

    I also think the 360 version will come out

    I personally would worry more about Warhammer Online(although that will probably will be okay too)…as its so PvP focused and PvP without other players is very little fun.

  • pixiestyx says:
    February 24, 2009 at 10:13 am

    yep i resubbed up to check out the new patch, and on the set server, it is hopping. No shortage of pugs for all levels and the improvements they have made are something to behold, Im running everything on max settings and getting 40 fps in town and 140 plus out in the wilderness. Really enjoying the game play now and there seems to be no gaps or shortages of things todo at any level range … the future could be bright for them if they play cards right, subs seem to be increasing. As for doom and gloom, finnancialy everyone is suffering so the news of a finnancial loss is not surprising, however q rev is up so maybe funcom is actually in a better posistion than some companies …. nc soft for one, cheyene mountain is another ….

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