Slitghtly increased Sales for GW2 in 3Q 2018

[zealex.9410]

> @"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.

>

 

Iirc anet the studio and the wow team are around the same number if not abit less on the wow side.

[zealex.9410]

> @"Inculpatus cedo.9234" said:

> FYI:

> ArenaNet employes 350-400

> Blizzard Entertainment employees 4,700

> Activision/Blizzard employees 9,625

>

> Quite a big difference.

>

 

He compaired wow to gw2 not blizzard to gw2.

[zealex.9410]

> @"Faline.8795" said:

> > @"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?

 

Assumimg 80k is the anual payment of developers at anet, i dont think thats quite accurate, could be wrong but iirc it was way closer to 60-65k average. Anet is quite known for paying bellow the industry standart.

[Vayne.8563]

> @"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.

 

Do you realize that no MMO in the history of MMOs has ever pulled in the numbers or income WoW has. By your standards, no other MMO can afford to exist. WoW has huge expenses this game doesn't have. TV ads alone, cost a ton of money. WoW did hire William Shatter, Chuck Norris and Mr. T for their ads are various times. Their trailers cost a small fortune. There's no way you can compare WoW to other MMOs.

 

That said, out of the other MMOs, all the other MMOs, Guild Wars 2 stands pretty high over all. We don't have exact numbers for all of them, but it's like saying no drink can exist other than Coke and Pepsi because they sell so much more than other drinks. It's just not true. Smaller companies have smaller overheads. They advertise less, employee fewer people, fight less lawsuits, etc.

[Vayne.8563]

> @"Ashen.2907" said:

> > @"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.

 

Assuming all employees are devs and make 70k a year. But I doubt 350 of the employees are actually devs. Some are going to be receptionists, bookkeepers, customer support personal and would undoubtedly make less.

[Vayne.8563]

> @"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.

 

Here's an article on some of the WoW staff numbers.

 

https://www.gamespot.com/articles/blizzard-outlines-massive-effort-behind-world-of-warcraft/1100-6228615/

[Inculpatus cedo.9234]

Well, there you go: 4,000 + 600 people just for World of Warcraft. Pretty close to what was stated previously.

(And that was in 2009.)

[Ashen.2907]

> @"Vayne.8563" said:

> > @"Ashen.2907" said:

> > > @"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.

>

> Assuming all employees are devs and make 70k a year. But I doubt 350 of the employees are actually devs. Some are going to be receptionists, bookkeepers, customer support personal and would undoubtedly make less.

 

Agreed.

 

Some, on the other hand, are going to be department leads, CEO, etc. as well. They likely make more. Still, your point is well made.

 

70k is not all that much for that area. Almost as bad as SF for cost of living.

[maddoctor.2738]

> @"Faline.8795" said:

> > @"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.

 

In other words, you don't have an actual figure of WoW revenue, just as I thought. Comparing a fantasy number with facts isn't a very good comparison.

 

 

[maddoctor.2738]

> @"Faline.8795" said:

> 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.

 

Just for comparison, Blizzard reported for Q3 2018 a 30% **operating margin** which is:

"Operating margin measures how much profit a company makes on a dollar of sales, after paying for variable costs of production such as wages and raw materials, but before paying interest or tax."

 

Using your assumption of 2.5 mil profit for Anet out of 6 mil revenue, that's 40% which is better than 30% so Anet is doing better than Blizzard even though Blizzard released their latest expansion for World of Warcraft (Battle for Azeroth) in Q3 2018 which sold **at least** a reported 3.4 million copies or 204 $ million (at 60 $ each).

 

I think you are overestimating how much profit game companies are making.

[Danikat.8537]

Can someone explain please - is this chart showing the total amount of money GW2 brought in, or the money they paid to NCSoft?

 

I've always assumed it's the latter, because that's what would be relevant for an NCSoft earnings report. It does them no good to count money that they will never receive because Anet spent it. But the way most people are talking it sounds like this is showing the total money paid for copies of GW2 and gems and all the costs (for both Anet and NCSoft staff who deal with GW2) have to come out of that.

 

> @"Ashen.2907" said:

> > @"Vayne.8563" said:

> > > @"Ashen.2907" said:

> > > > @"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.

> >

> > Assuming all employees are devs and make 70k a year. But I doubt 350 of the employees are actually devs. Some are going to be receptionists, bookkeepers, customer support personal and would undoubtedly make less.

>

> Agreed.

>

> Some, on the other hand, are going to be department leads, CEO, etc. as well. They likely make more. Still, your point is well made.

>

> 70k is not all that much for that area. Almost as bad as SF for cost of living.

 

But in any company the number of people in upper management making more than a specialist in the field is much smaller than the number of people in non-specialist administrative/support roles. So it's unlikely they balance each other out. There will be far more people making less than $70k than those making more.

[Ashen.2907]

> @"Danikat.8537" said:

> Can someone explain please - is this chart showing the total amount of money GW2 brought in, or the money they paid to NCSoft?

>

> I've always assumed it's the latter, because that's what would be relevant for an NCSoft earnings report. It does them no good to count money that they will never receive because Anet spent it. But the way most people are talking it sounds like this is showing the total money paid for copies of GW2 and gems and all the costs (for both Anet and NCSoft staff who deal with GW2) have to come out of that.

>

> > @"Ashen.2907" said:

> > > @"Vayne.8563" said:

> > > > @"Ashen.2907" said:

> > > > > @"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.

> > >

> > > Assuming all employees are devs and make 70k a year. But I doubt 350 of the employees are actually devs. Some are going to be receptionists, bookkeepers, customer support personal and would undoubtedly make less.

> >

> > Agreed.

> >

> > Some, on the other hand, are going to be department leads, CEO, etc. as well. They likely make more. Still, your point is well made.

> >

> > 70k is not all that much for that area. Almost as bad as SF for cost of living.

>

> But in any company the number of people in upper management making more than a specialist in the field is much smaller than the number of people in non-specialist administrative/support roles. So it's unlikely they balance each other out. There will be far more people making less than $70k than those making more.

 

Sure, but its not really about number of people, its about dollars. If there are 20 people that make 20k less than that median, but 5 that make 40k more and one that makes 200k more then the dollars balance even if the number of people do not.

 

[Hesacon.8735]

I don't want to get too much into the finances, but for those talking about salaries, you also have to consider overhead in the form of server and hardware costs, rent, ISP connections, voice acting, taco Tuesday, etc.

[Arden.7480]

> @"Inculpatus cedo.9234" said:

> FYI:

> ArenaNet employes 350-400

> Blizzard Entertainment employees 4,700

> Activision/Blizzard employees 9,625

>

> Quite a big difference.

>

 

While Blizzard has 8 games, and WoW is the biggest MMORPG in the world, and ANet has 2 games, and GW1 is kind of a walking dead, it's still a great number.

[IndigoSundown.5419]

> @"Danikat.8537" said:

> Can someone explain please - is this chart showing the total amount of money GW2 brought in, or the money they paid to NCSoft?

>

> I've always assumed it's the latter, because that's what would be relevant for an NCSoft earnings report. It does them no good to count money that they will never receive because Anet spent it. But the way most people are talking it sounds like this is showing the total money paid for copies of GW2 and gems and all the costs (for both Anet and NCSoft staff who deal with GW2) have to come out of that.

 

We do not know the arrangement between NCSoft and ANet. Theoretically, it's possible that your assumption is correct. That would mean that ANet expenses could not be included in the NCSoft report. In order to comply with regulations, if GW2 revenue is reported after expenses, then GW2 expenses cannot be included in the report's expense section. If what is reported is total GW2 revenue, then ANet expenses would be folded into the report's undifferentiated expense section. Either way, profit would remain the same. NCSoft is required to show accurate information as to its revenue and profits, in accordance with international standards which have been adopted in S. Korea.

 

There is a potential advantage to NCSoft to report total GW2 revenue. This makes their total revenue number bigger. One purpose of financial reporting is to make the company more attractive to investors. Larger revenue numbers work better for this than smaller ones. The only advantage I can see to report a smaller number would be to come under a regulatory threshold to qualify as a smaller company. However, NCSoft takes in far too much money to qualify for such status, even without ANet revenue.

 

Finally, if revenue shown for GW2 is after expenses, that would mean that revenue taken in by ANet is considerably higher, given their likely expenses. That seems unlikely.