Slitghtly increased Sales for GW2 in 3Q 2018

[Belenwyn.8674]

As the most recent earnings report shows a strong performance of GW2. Sales increased to 21 bn Won after 19.9 in 2Q 2018. The current LW can keep the players busy and animates them to buy gems. I hope the next episode of LW4 will start soon to keep the momentum running.

Sales: https://imgur.com/Lsg4iXf

 

Earnings Release: http://global.ncsoft.com/global/ir/prfile.aspx?ID=FB90E274-988C-4256-ADEA-0667030E8DD6

[alchemist.6851]

following 2017 trend.. expect stronger Q4!!! i spent like USD 500 on gems this year

[Vayne.8563]

I think it's pretty clear the game is doing well, particularly for a six year old game in the middle of an expansion cycle. I'll be interested to see where the game goes now, as it moves forward.

[yann.1946]

I wonder what made the increase happen.

Did bless fall into this quarter?

[Faline.8795]

I'm actually surprised a game can survive on $6mil a month. Given salaries, overhead, etc. As a comparison, WoW takes in about $45mil/month.

[Ayrilana.1396]

> @"Faline.8795" said:

> I'm actually surprised a game can survive on $6mil a month. Given salaries, overhead, etc. As a comparison, WoW takes in about $45mil/month.

 

Look at the number of employees each has.

 

[Randulf.7614]

> @"Faline.8795" said:

> I'm actually surprised a game can survive on $6mil a month. Given salaries, overhead, etc. As a comparison, WoW takes in about $45mil/month.

 

I would expect WoW to have a much larger payroll bill. And given it is the most recognised MMO in the World and the most played, it should be raking those much bigger numbers

 

I'd say 6mil every 4 weeks is a pretty spectacular income for what is unlikely to be considered a well recognised global franchise in comparison to other leading names and after 6 years to boot

[Faline.8795]

> @"Ayrilana.1396" said:

> > @"Faline.8795" said:

> > I'm actually surprised a game can survive on $6mil a month. Given salaries, overhead, etc. As a comparison, WoW takes in about $45mil/month.

>

> Look at the number of employees each has.

>

 

I don't know those numbers. I presumed GW2 has a good sized staff because it takes people to come up with this content.

 

Staff-wise, is WoW and GW2 really that much different? I know WoW pushes out content faster than GW2, so certainly WoW has more staff. But they are both working on the next expac. Certainly WoW has a larger GM staff and CS staff.

 

But GW2 certainly has a smaller profit margin. We'll never know what that is, though.

[Randulf.7614]

> @"Faline.8795" said:

> > @"Ayrilana.1396" said:

> > > @"Faline.8795" said:

> > > I'm actually surprised a game can survive on $6mil a month. Given salaries, overhead, etc. As a comparison, WoW takes in about $45mil/month.

> >

> > Look at the number of employees each has.

> >

>

> I don't know those numbers. I presumed GW2 has a good sized staff because it takes people to come up with this content.

>

> Staff-wise, is WoW and GW2 really that much different? I know WoW pushes out content faster than GW2, so certainly WoW has more staff. But they are both working on the next expac. Certainly WoW has a larger GM staff and CS staff.

>

> But GW2 certainly has a smaller profit margin. We'll never know what that is, though.

 

The staffing numbers are hugely different. I think gw2 is around 400ish, i expect wow is prob in the thousands. Or at least 2-3 times that of gw2

[Faline.8795]

> @"Randulf.7614" said:

> > @"Faline.8795" said:

> > I'm actually surprised a game can survive on $6mil a month. Given salaries, overhead, etc. As a comparison, WoW takes in about $45mil/month.

>

> I'd say 6mil every 4 weeks is a pretty spectacular income for what is unlikely to be considered a well recognised global franchise in comparison to other leading names and after 6 years to boot

 

I'd say GW2 is very well recognized. Whenever people over on the WoW forums talk about leaving WoW for another game, GW2 is almost always near the top of the list. (FFXIV seems to beat it out mostly.)

 

[Randulf.7614]

> @"Faline.8795" said:

> > @"Randulf.7614" said:

> > > @"Faline.8795" said:

> > > I'm actually surprised a game can survive on $6mil a month. Given salaries, overhead, etc. As a comparison, WoW takes in about $45mil/month.

> >

> > I'd say 6mil every 4 weeks is a pretty spectacular income for what is unlikely to be considered a well recognised global franchise in comparison to other leading names and after 6 years to boot

>

> I'd say GW2 is very well recognized. Whenever people over on the WoW forums talk about leaving WoW for another game, GW2 is almost always near the top of the list. (FFXIV seems to beat it out mostly.)

>

 

Yeah but outside of the niche market, it has little brand impact. Whereas wow, elder scrolls and final fantasy are instantly recognisable across the entire industry. That isnt to say gw2 isnt popular, it just punches well above itself which is a credit to the entire Anet team in trying to keep it relevant and progressive at least in pve

[Faline.8795]

> @"Randulf.7614" said:

>

> The staffing numbers are hugely different. I think gw2 is around 400ish, i expect wow is prob in the thousands (5000 a few years ago, but id expect shrinkage)

 

Just for giggles, let's take those numbers and make some other assumptions. Let's say the average salary is 50K/year.

 

That would be 1.6/mil month. Let's say another 2-3 mil for other expenses. That's about 2.5 mil/month in profit.

 

I could live with that. Can ANet? The question being: Can the resources they put into GW2 yield greater profit elsewhere?

 

Fortunately, ANet seems pretty happy with GW2. There's been an appreciable slowdown in content since it first launched, but so far it seems to be steady. That is a good sign.

[Faline.8795]

> @"Randulf.7614" said:

> > @"Faline.8795" said:

> > > @"Randulf.7614" said:

> > > > @"Faline.8795" said:

> > > > I'm actually surprised a game can survive on $6mil a month. Given salaries, overhead, etc. As a comparison, WoW takes in about $45mil/month.

> > >

> > > I'd say 6mil every 4 weeks is a pretty spectacular income for what is unlikely to be considered a well recognised global franchise in comparison to other leading names and after 6 years to boot

> >

> > I'd say GW2 is very well recognized. Whenever people over on the WoW forums talk about leaving WoW for another game, GW2 is almost always near the top of the list. (FFXIV seems to beat it out mostly.)

> >

>

> Yeah but outside of the niche market, it has little brand impact. Whereas wow, elder scrolls and final fantasy are instantly recognisable across the entire industry. That isnt to say gw2 isnt popular, it just punches well above itself which is a credit to the entire Anet team in trying to keep it relevant and progressive at least in pve

 

Aren't WoW and FF outside the MMO market anyway? Which expands their recognition.

 

So yeah, small wonder why GW2 isn't thought of much outside the MMO genre. Because it has no presence outside it.

 

And WoW was helped by both the South Park episode as well as its large marketing.

 

But yet, kudos to the GW2 team for making such a great product that it is so well regarded! When people think "alternate WoW", GW2 is the main thing they think of.

[Ayrilana.1396]

> @"Faline.8795" said:

> > @"Ayrilana.1396" said:

> > > @"Faline.8795" said:

> > > I'm actually surprised a game can survive on $6mil a month. Given salaries, overhead, etc. As a comparison, WoW takes in about $45mil/month.

> >

> > Look at the number of employees each has.

> >

>

> I don't know those numbers. I presumed GW2 has a good sized staff because it takes people to come up with this content.

>

> Staff-wise, is WoW and GW2 really that much different? I know WoW pushes out content faster than GW2, so certainly WoW has more staff. But they are both working on the next expac. Certainly WoW has a larger GM staff and CS staff.

>

> But GW2 certainly has a smaller profit margin. We'll never know what that is, though.

 

Labor costs typically represent the majority of the annual costs that these type of companies incur. A company with 200 employees will have significantly different costs than one with 600 employees which would also be significantly different than one that had 1500 employees.

 

The amount of content they release, including whether they’re working on an expansion, isn’t relevant as that’s typically reflected in labor costs already.

[Danikat.8537]

Correct me if I'm wrong, but I always thought the money shown in these reports was only what they paid to NCSoft, and therefore doesn't include Anet's costs.

 

(Also it would be hard to compare people working on GW2 and WoW because Blizzard has several other games too and a lot of staff probably work on several of them, or provide support for all of them (thinking things like HR, Finance, in-house IT etc.) whereas Anet only make GW2 so all their staff are working on that game.)

 

Personally the biggest surprise to me in this report is that their mobile revenue dropped so much this time last year and looks like it's only just stabilising. I'd heard that was going to be their next big thing. Of course it is still bringing in more than all the other games in the image put together, but it's still a massive drop from what it was.

[Kalendraf.9521]

> @"Faline.8795" said:

> > @"Randulf.7614" said:

> >

> > The staffing numbers are hugely different. I think gw2 is around 400ish, i expect wow is prob in the thousands (5000 a few years ago, but id expect shrinkage)

>

> Just for giggles, let's take those numbers and make some other assumptions. Let's say the average salary is **50K/year**.

>

> That would be 1.6/mil month. Let's say another 2-3 mil for other expenses. That's about 2.5 mil/month in profit.

>

> I could live with that. Can ANet? The question being: Can the resources they put into GW2 yield greater profit elsewhere?

>

> Fortunately, ANet seems pretty happy with GW2. There's been an appreciable slowdown in content since it first launched, but so far it seems to be steady. That is a good sign.

That's a rather low estimate for a typical tech-related job. Programmers / software engineers will likely earn at least $75K per year, and factoring in West Coast salary inflation present in the Seattle / Bellevue area along with possible years of experience will likely shift that up another 30 to 50 percent, into the low 6-figure range. Of course, not everyone is a programmer. Some other positions may make less. For simplicity, assuming a salary range of between $40k to $120K with a roughly flat distribution would give an avg salary of ~$80K. x400 workers would be ~$32 mil/yr or ~$2.67 mil/month

 

On the other hand, expenses are probably quite a bit lower than you're estimating. Rent, utilities and so forth should be relatively modest, and their advertising costs may be relatively low considering how little of that we see. ~$1mil to ~$1.5 mil per month seems plausible. End result is basically the same as your overall estimate.

 

As for where the profit could be applied, advertising seems like an obvious choice. I barely hear about GW2 outside of the game itself and the forums.

 

 

[Inculpatus cedo.9234]

FYI:

ArenaNet employes 350-400

Blizzard Entertainment employees 4,700

Activision/Blizzard employees 9,625

 

Quite a big difference.

 

[Faline.8795]

> @"Inculpatus cedo.9234" said:

> FYI:

> ArenaNet employes 350-400

> Blizzard Entertainment employees 4,700

> Activision/Blizzard employees 9,625

>

> Quite a big difference.

>

 

Where did you get that information? Not disputing it. Just dying of curiosity.

 

So taking those numbers:

 

400*80K == 2.6 mil/month salary. Assume 1.5 mil/month for other expenses. That's 3.1 mil/month expenditures vs 6 mil income. Profit == 2.9 mil/month.

 

I don't know about Blizzard. That is across the whole thing. What is the number of employees dedicated to WoW?

[Inculpatus cedo.9234]

Google is my friend. =)

[maddoctor.2738]

> @"Faline.8795" said:

> I'm actually surprised a game can survive on $6mil a month. Given salaries, overhead, etc. As a comparison, WoW takes in about $45mil/month.

 

Where do you get that 45mil/month figure?

[Faline.8795]

> @"Inculpatus cedo.9234" said:

> Google is my friend. =)

 

No it isn't! Google is the embodiment of evil!

[Faline.8795]

> @"maddoctor.2738" said:

> > @"Faline.8795" said:

> > I'm actually surprised a game can survive on $6mil a month. Given salaries, overhead, etc. As a comparison, WoW takes in about $45mil/month.

>

> Where do you get that 45mil/month figure?

 

The general consensus is that WoW has 3.5 million active players. Although a lot pay by the hour, I assumed for the sake of discussion that everything averages out to a simple $15/month per player. That is 45 mil/month total if my maths are right.

[Shostie.6435]

> @"Faline.8795" said:

> > @"Randulf.7614" said:

> >

> > The staffing numbers are hugely different. I think gw2 is around 400ish, i expect wow is prob in the thousands (5000 a few years ago, but id expect shrinkage)

>

> Just for giggles, let's take those numbers and make some other assumptions. Let's say the average salary is 50K/year.

>

> That would be 1.6/mil month. Let's say another 2-3 mil for other expenses. That's about 2.5 mil/month in profit.

>

> I could live with that. Can ANet? The question being: Can the resources they put into GW2 yield greater profit elsewhere?

>

> Fortunately, ANet seems pretty happy with GW2. There's been an appreciable slowdown in content since it first launched, but so far it seems to be steady. That is a good sign.

Your calculations don't take into account payroll taxes or benefits like health insurance. I would also be surprised if the average salary is that low given Seattle's relatively high cost of living. But let's say the average salary is $50k/year. Without knowing anything about how they operate, I'd conservatively estimate their expenses at 2.5-3 times the total they pay in salaries. That's $50-60 million. With $90 million in revenue over the last year, that gives a profit margin of 33-44%. For comparison, EA's profit margin is well over 50%, so maybe I'm overestimating ArenaNet's expenses.

[Hesacon.8735]

Arenanet _has_ invested a lot into things important to the player base, so it's good to see the player base rewarding them. Off the top of my head, I can think of:

* ~2-3 month LW release

* ~2-3 month fractal or raid release (though many would like to see it faster, if Arenanet is making higher profits they can do this)

* Improving festivals and even reintroducing one. Each festival has gained mount races except I think lunar new year.

* sPvP seasons seem to have hit a groove

* WvW rewards are miles ahead of where they were two years ago with rewards tracks, skirmish tracks, _and_ legendary armor/backpack. A successful roll out of the alliances system could see a lot of player growth

* Splitting skills and traits between game modes to try to improve balance, with _some_ success

* Cleaning up a lot of quality of life things like keyrings, material storage, tonics, and now fixing minor runes!

* With the tonics and instruments more generally, the new system cleans up a lot of the clutter problem that would have discouraged players from purchasing the gem items in the first place

* Gem items like mount skins are a really cool optional thing that doesn't affect gameplay at all, no pay-to-win there

 

There's a lot more that could be done, like balance or build templates and the new map per LW release can potentially fragment the community if they don't go back to a LW2-like approach to maps; but their releases have shown that they understand their player base.

[Ashen.2907]

> @"Faline.8795" said:

> > @"Randulf.7614" said:

> >

> > The staffing numbers are hugely different. I think gw2 is around 400ish, i expect wow is prob in the thousands (5000 a few years ago, but id expect shrinkage)

>

> Just for giggles, let's take those numbers and make some other assumptions. Let's say the average salary is 50K/year.

>

> That would be 1.6/mil month. Let's say another 2-3 mil for other expenses. That's about 2.5 mil/month in profit.

>

> I could live with that. Can ANet? The question being: Can the resources they put into GW2 yield greater profit elsewhere?

>

> Fortunately, ANet seems pretty happy with GW2. There's been an appreciable slowdown in content since it first launched, but so far it seems to be steady. That is a good sign.

 

average dev salary for the area where anet is located is around 70k. Cost to employ is between 1.2 and 1.3 times base salary. Somewhere around 350 employees? So, 70,000 x 1.3 x 350(?) = 31,850,00 per year in payroll alone. More than 2.6 million per month.