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Where is our money?

MA are trying to work like a bank and assume that withdrawals are minimal... but if the market was to crash and everybody was to withdraw then effectively this would lead to MA crashing...

That's why I don't deposit anything into the game I am not willing to loose. MA can give you no guarantee whatsover...

What this proves though is that once more, that theory that "MA only takes Decay" is totall bullxxxx... once you have deposited the money sits on an MA account and the money is used for MA operations, although it is still pledged to you as PED balance on your PED card. It's nothing more than a pledge... there is no guarantee, the money is more or less taken by MA already, assuming you will spend it anyway.

That small proportion of 47% cash is not just your PEDs... that's the cash flow that is left for MA operations...

I totally share the concerns mentioned, to me it proves that the MA business model is not able to survive based on decay only. The big investments, dev office in Mexico, CryEngine2, setting up of FPC... cost big bucks and MA can not fund it out of the decay bill.. The 3x skill events and the 2x skill events flushed a lot of cash into MAs bank account, cash that was deerely needed... otherwise the cash ratio would probably have looked even worse... much worse !!! The 3x skill was not just an event, it was a serious need for cash... and it worked...

I am very confident as to the current development of FPC, but the economic bit of MA worries me seriously...

I just hope that all this will not lead to an increased cost of playing once CE2 comes along... I hope MA will try to generate cash by number of players and not through increasing costs...

The question remains whether MA shoudl stick to a higher cash ratio or even be demanded to keep it at 100% PED balance... after all they still claim to only be taking "decay" off you ... what a lot of bullxxx...
 
Thantos said:
What you are saying is concerning, but my understanding is that MA is regulated by Swedish banking laws. Someone else can correct me if I am wrong.
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No!

They are a gaming company, that is all they are.

They are not regulated in any way and they rule over us, and our money as they please.
 
chevrons said:
There's nothing in the EULA which says EU Players have any rights to their PED balances if MA goes bust. Even if MA does not go bust but merely closes Entropia, players only get their deposits from the preceding 6 months back.
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Worth highlighting that point. If you have deposited nothing in the past 6 months, then that's how much they owe you.

Mindark's ToU (section 9):

MINDARK'S LIABILITY TOWARDS YOU SHALL, IF ACKNOWLEDGED IN EACH INCIDENCE BE LIMITED TO NO MORE THAN THE TOTAL AMOUNT TRANSFERRED INTO THE INVOLVED ACCOUNT BY SAID PARTICIPANT UNDER SIX MONTHS PRIOD PRIOR TO THE INCIDENT.


Caps used as that is how it appears - also including the typo
 
Mega said:
Worth highlighting that point.

Mindark's ToU (section 9):

MINDARK'S LIABILITY TOWARDS YOU SHALL, IF ACKNOWLEDGED IN EACH INCIDENCE BE LIMITED TO NO MORE THAN THE TOTAL AMOUNT TRANSFERRED INTO THE INVOLVED ACCOUNT BY SAID PARTICIPANT UNDER SIX MONTHS PRIOD PRIOR TO THE INCIDENT.


Caps used as that is how it appears - also including the typo
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Which imo sounds no less the fair, they dont specific what kind of incident, but i assume if MA gets flooded and all the servers gets ruined this is what they will give you back.

I mean, im i the only one whos fine with that? Its better then nothing.

Althou it concerns me they say "Limited to no more then" rather then "Limited to the exakt ammount" or something alike that. I mean they could writ "You wont get shit back" just as well.

Anyways. thats maybe again just me? I like that they add this to the EULA to enlighten me about what they do rather then keeping it in the dark. Since even if they remove it, this will still remain the case if they so please they set the rules, and we agree and obey.
 
To be honest, I don't wonder about this, not more about the fact than MA actually seems to make losses than about that they don't even have the TT values ingame on their hands, even after taking a very high charge for the 'service'.

It had to happen sooner or later through instead taking a little from all players, they took huge from 80% of the players and gave it to the others, what was followed by the quitting of those players. I also didn't take any action ingame this year yet because I ever lost everything. If MA would have 'charged' €200-€300 a month from me having my 4-8 hours funtime a day, I would be fine, but in fact I had to found out that it was easy to lose this cash in one week or less.

Therefore I completely stopped active playing, don't lose my cash in that rapid speed anymore and therefore also don't deposit my €500-€700 a month to have little less fun and purchase new fun stuff for my avatar. And I'm not the only depositer more or less 'lost' this way.

Now calculate yourself what happened.
With introducing higher mob regenration, decays, reducing loot, MA lost hundreds if not even more heavy depositers like me. Calculate yourself, €500*12 = €6000 * number of players 'lost'... €600.000 (100p) ? €3.000.000 (500p) ?

Latest since the early 1990s each ceo / businessman / shopkeeper will tell you that in actual economy it is very important to don't screw off customers who keep your business alive, or other, "the customer is the king".

Well, seems like swedish (still) are doing modern business like in 19 century...
 
Xzion said:
I mean, im i the only one whos fine with that? Its better then nothing.
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You probably arent alone in being fine with that, but you do see posts of people who havent needed to deposit in years who appear to have very expensive gear, it might make them jittery.

It also highlights the difference to posts comparing Mindark to a bank, until recently UK banks were liabile to about 90% up to about £30,000 even if they had been deposited 5, 10, 20 years ago. Mindark arent a bank and I dont believe they have ever compared themselves to one.
 
Mega said:
You probably arent alone in being fine with that, but you do see posts of people who havent needed to deposit in years who appear to have very expensive gear, it might make them jittery.

It also highlights the difference to posts comparing Mindark to a bank, until recently UK banks were liabile to about 90% up to about £30,000 even if they had been deposited 5, 10, 20 years ago. Mindark arent a bank and I dont believe they have ever compared themselves to one.
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I got 100% security on 50.000 EURO in my bank. Its not near enugh for saving but. well, also better then nothing. That is why i see this as; Better then nothing as well i guess. Im happy i get to know i got some sort of security to know how much i can get out IF something would occour from MA's side.

I suppose if people feel afraid that this might affect them in a negativ way the only way to solve this problem is to sell the gear and get the money out befor a "incident" happends, If it happends.

And for the last part u are completly right. However those with expensive gear shuld have another concern, and that is that their gear will be worth the TT only if this game crashes at maximum.
 
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is that really just strait tt value? and is that locked accounts too? there are quite a few locked accounts worth quite a lot.
 
Thanks for posting the reports, they are an interesting read.

There has been plenty of posts so far discussing all sorts of doomsday scenarios and I don't know why.

Firstly, MA are in a financially sound position - so no concern there.

Secondly, if something happened to MA, I or someone else would step in to buy it up, hence securing the deposits of current players. MA is like a growing goldmine, it has value well beyond it's physical assets and it's players virtual assets.

The key point to make in terms of MA's value is that without players it has very little value, I'm sure they realise that and will protect their customers. Nothing motivates like self interest - and your protection is MA's self interest.
 
As long as most of us don't worry and don't withdraw, we'll be fine. I have my trust in MindArk, they'll work it all out in the end.
 
I'm not going to try and work out what most people are saying about the Financials, as its too early for me to work out and I have coffee syndrome. Too much coffee and a headache. :laugh:

Anyway, just wanted to throw this into the mix.

If MA have $3.5million in cash, they won't just have this sitting there not making anything. That would just be bonkers. I would like to think they are using it to purchase other assets, such as stocks and shares to give them a return, so they can further build there business, keep themselves afloat, pay wages and buy resources needed to further the business.
If people think this cash just sits there for withdrawals, I think its bonkers.

The reason for the delay in withdrawals, is that MA probably has to withdraw the funds from there acquisitions, possibly in the stock market so they can fund any massive withdrawals, but for the smaller withdrawals, I would think they is a contingent of cash on the side lines that keeps things simple for the smaller amounts.

Then we have the Interest they could be earning on that cash. Before the recession, that would have been 4-6% maybe more depending on where they had it stashed.
If they had $3.5million at 4-6%, that would have been $140,000 - $210,000 in a year. That is a nice healthy sum to keep withdrawals afloat for the minimum returns.
However, now that interest rates have dropped, especially in the UK(Don't know what it's like anywhere else) I can only assume similar things are happening around the world, so that money has dropped also to probably close to the 10's of thousands.

I can't honestly make head nor tail of the whole of MA's financial report, because lets be honest, that isn't really a financial report.
I'm still trying to work out why there Total Equity & Liabilities and there Total Assets work out to exactly the same amounts, when i thought they were 2 totally different things.

Also, the fact that MA aren't listed on a proper Stock Exchange as far as I can tell, also means they don't have to list a proper financial statement.

There is probably a lot of hidden numbers and figures that would make things a lot more clear, and I can only see this having to improve if MA want more funding from larger sources outside of the Gaming community and much better financial report than is given in that PDF.

That is how I see it, and my small understanding of financial reports, but I understand the larger organisation reports more than I do MA's.
 
Mega said:
You probably arent alone in being fine with that, but you do see posts of people who havent needed to deposit in years who appear to have very expensive gear, it might make them jittery.

It also highlights the difference to posts comparing Mindark to a bank, until recently UK banks were liabile to about 90% up to about £30,000 even if they had been deposited 5, 10, 20 years ago. Mindark arent a bank and I dont believe they have ever compared themselves to one.
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I don't have a problem with people who don't or who have never deposited not getting anything back. After all, all they have put into the game is Time and Energy, and a bit of no how, and thats it.

They may have uber gear and good for them, but if they don't deposit, why should they get anything back. Even then, if they have Uber Gear, I wouldn't be surprised if they have already withdrawn a lot of money through various means(As far as I know, i think non depositors can't withdraw??) to huge sums of money.

I think it's only in the current climate that these questions always get raised, but like anything, if you don't have the cash, don't spend it.
 
And I was thinking recently about the amount of uber items for sale on auction and on EF with the reason of "not selling out, just need some quick cash":scratch2::scratch2:
 
Numa said:
I can't honestly make head nor tail of the whole of MA's financial report, because lets be honest, that isn't really a financial report.
I'm still trying to work out why there Total Equity & Liabilities and there Total Assets work out to exactly the same amounts, when i thought they were 2 totally different things.
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With all due respect mate... some of what you are saying is undoubtably true but you have no clue about financial statements if you are asking as question like that... Do a bit of reading on balance sheets and assets and liabilities and then come back to discuss MA's financial report :D

That said, you are probably not the only one who does not know how to read and interpret a financial statement so no harm meant... don't take it personal :ahh:

will give you a +rep for trying ;)
 
coubo said:
So, players in EU have $7.39mm of assets but MindArk has only $3.47mm in cash, which is only 47% of the players assets. What happends if all players decide to sell all their items at tt and cash out? Does not appear that MindArk has enough money to pay out everyone, right?
Even assuming that half of the player decide to leave, MindArk has, in theory, enough money to pay those player - more or less. But then what about the other half the the player remaining in-game? They have PED. Good for them, but those PED are worthless because MA has no money to pay out anyway. In which half of the players would you like to be if this happens?
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Whitout reading the actuall report or the other answers to this threar(will be done later), one thing that I see is that we only see the TT value of the players items. I doubt all players should TT all there stuff the same day. On the other side if all items with high markup was sold to another player and then the selling player withdraws his PEDs this could be hard for MA if the items was payed with ingame money.
 
Nirfu said:
Whitout reading the actuall report or the other answers to this threar(will be done later), one thing that I see is that we only see the TT value of the players items. I doubt all players should TT all there stuff the same day. On the other side if all items with high markup was sold to another player and then the selling player withdraws his PEDs this could be hard for MA if the items was payed with ingame money.
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Theorectically...yes. But how many people do you know with a PED card awash with cash to buy ModFap and ModMerc?
 
Could theese numbers involve the capital invested in for instance CE2, or their new division opening in mexico without beeing specified?

I have no clue, since I'm not into economics. I only know that its a huge investment that will pay of in long term and thought that might be the reason for why they not have as much cash at the end om 2008 as in 2007?
 
AJack10600 said:
With all due respect mate... some of what you are saying is undoubtably true but you have no clue about financial statements if you are asking as question like that... Do a bit of reading on balance sheets and assets and liabilities and then come back to discuss MA's financial report :D

That said, you are probably not the only one who does not know how to read and interpret a financial statement so no harm meant... don't take it personal :ahh:

will give you a +rep for trying ;)
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I don't take it personally as I very rarely understand these things. You need a whole Financial lesson just on how to open one, let alone read one. :laugh:

I will do a bit of reading on them though. Any ideas where to start?
 
Medea Delorace said:
Could theese numbers involve the capital invested in for instance CE2, or their new division opening in mexico without beeing specified?

I have no clue, since I'm not into economics. I only know that its a huge investment that will pay of in long term and thought that might be the reason for why they not have as much cash at the end om 2008 as in 2007?
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Certainly. The querterly financials do not give a sufficient view on their capital expenditure, but at least you can figure out the total capex for FY08 was 24M SEK. I'm sure they haven't bought laptops and coffee machines for 2.5M USD in one year....
 
Numa said:
I'm not going to try and work out what most people are saying about the Financials, as its too early for me to work out and I have coffee syndrome. Too much coffee and a headache. :laugh:

Anyway, just wanted to throw this into the mix.

If MA have $3.5million in cash, they won't just have this sitting there not making anything. That would just be bonkers. I would like to think they are using it to purchase other assets, such as stocks and shares to give them a return, so they can further build there business, keep themselves afloat, pay wages and buy resources needed to further the business.
If people think this cash just sits there for withdrawals, I think its bonkers.

The reason for the delay in withdrawals, is that MA probably has to withdraw the funds from there acquisitions, possibly in the stock market so they can fund any massive withdrawals, but for the smaller withdrawals, I would think they is a contingent of cash on the side lines that keeps things simple for the smaller amounts.

Then we have the Interest they could be earning on that cash. Before the recession, that would have been 4-6% maybe more depending on where they had it stashed.
If they had $3.5million at 4-6%, that would have been $140,000 - $210,000 in a year. That is a nice healthy sum to keep withdrawals afloat for the minimum returns.
However, now that interest rates have dropped, especially in the UK(Don't know what it's like anywhere else) I can only assume similar things are happening around the world, so that money has dropped also to probably close to the 10's of thousands.

I can't honestly make head nor tail of the whole of MA's financial report, because lets be honest, that isn't really a financial report.
I'm still trying to work out why there Total Equity & Liabilities and there Total Assets work out to exactly the same amounts, when i thought they were 2 totally different things.

Also, the fact that MA aren't listed on a proper Stock Exchange as far as I can tell, also means they don't have to list a proper financial statement.

There is probably a lot of hidden numbers and figures that would make things a lot more clear, and I can only see this having to improve if MA want more funding from larger sources outside of the Gaming community and much better financial report than is given in that PDF.

That is how I see it, and my small understanding of financial reports, but I understand the larger organisation reports more than I do MA's.
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Indeed all the assets are invested and they get interest income from it. This adds to MA's profit (as if decay, auction/deposit/withdrawal fees, estate sale was not enough hehe). With interests going down, this will add more pressure on MA's cash position
(also we can pray they are not invested in equities or we are doomed :) )

Reacting on posts which said "let's trust MA" or "there is value in MA" or "they have a lot of future profits". Well this is all fine but it's a leap of faith. In the end they are using deposit money to fund future projects which involve some risks. If those projects works, MA shareholders will reap the profit, if they don't work, depositors will loose their money. That's a nice way to be financed :)

I have no problem with MA's business model right now (and I will post another analysis tomorrow which shows why), just that they are pushing a little too much on their liability coverage. The only thing which is abusive from their part is to market PE as "investment". When I invest in a fund, at any time, I know the fund net asset value and how much I can withdraw (unless it's run by B. Madoff :D ). In EU, you "invest" in something with MA having no obligation to pay you back. I don't call this an investment.
 
Where do people think MA get the money to invest in infrastructure, cryengine, buildings in Germany, Jans Salary?

It's from our deposits (plus maybe a little from advertising - I doubt any of the other worlds are paying lease fees yet since they're not up and running).

They have no other source of income. The PED for decay is virtual money and just reduces the amount people might be able to cash out - the real stuff is your deposits.

What these accounts show is that recently they have been spending it faster than we have been depositing it. There's only one end to that road if they carry on (and we don't deposit more).

People have compared MA to a pyramid scheme in the past - a little unfair but you can see how in the end it might work out that way.
 
have you guys ever crunched the numbers on what it costs to make a full cry2-version of a running RCE like Entropia?
 
"cash and bank balance" of mindark as been used to invest in new way, such as CE2, paying liscences, new employes wages, mexican new office ??

Well, this "turn" in cash balance is due to that, only, no need to parano over here, MA is strong.
 
My best guess is . That when the namechange was done to the new Planet calypso, there was probably a new company registered with that name to. And with that some serious bit of money was jiggled around between at least 2 or 3 companys in MAs possesion. All done to avoid to pay the INSANE swedish taxes. Another probably VERY costly thing for them is that they just HAVE to attend each and every Convent around the world. Just to reach a small "click" of puter nerds that attends thoose gatherings. Quite insane marekting strategy in my eyes. But what do i know ? I just been working with sales and marketing since late 70 is . So i guess im still a NOOB in the marketing field :silly2:
 
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Hulyss said:
"cash and bank balance" of mindark as been used to invest in new way, such as CE2, paying liscences, new employes wages, mexican new office ??

Well, this "turn" in cash balance is due to that, only, no need to parano over here, MA is strong.
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What you said, though the planet partners are going to get one hell of a bill to cover that future amortization added onto to exisiting operating costs.
 
Pretty typical for an online business of the non traditional model I`d say. After all it is still the wild west out here on the web.
 
AJack10600 said:
That's why I don't deposit anything into the game I am not willing to loose. MA can give you no guarantee whatsover...

What this proves though is that once more, that theory that "MA only takes Decay" is totall bullxxxx... once you have deposited the money sits on an MA account and the money is used for MA operations, although it is still pledged to you as PED balance on your PED card. It's nothing more than a pledge... there is no guarantee, the money is more or less taken by MA already, assuming you will spend it anyway.
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As I have always understood it PED decay is what MA takes out of EU everything else (like auctions, fees, and consumables) is recycled back into the system. Continual removal of PED from the system encourages people to deposit to refill that bucket which in turn refills MA's bank account. They can probably forecast how much PED they need at any given time to cover withdraws so unless there is a mass Exodus of people they can utilize the other capital they have attained with some confidence it will not be needed.

I do agree with the rest of your post though and I don't deposit what I am not willing to lose as well. Once your money is converted into PED that money is in MA's hands and yeah I always figured they did other things with it. I also figured they had to have some type of reserve to pay participants who withdraw but that does not stop them from making it harder to build a PED balance big enough to withdraw though. Lots of PED and items with PED value are probably tied up on avatars that are inactive or rarely active as well. Who knows how many 100-200 ped avatars are out there tying up PED in items. :dunno:

There financials don't worry me atm. My financials are another story though lol.
 
I think that MA trying to survive on primarily the players deposits is probably not the safest route to go down. As we have seen in the past with loot and other nerfs due to MA needing more money, the depositors get annoyed and some leave. The rest just grumble and keep on playing and don't deposit as much.

This is where MA should really be trying to get their major income from other sources. I think you know where I am going with this, right?

Yes, adverts.

Yes we have the thread about "where are the coke signs?" but that is really looking at too big a product to advertise. MA should look at what us players will really buy. EA Games have already started to do ingame advertising. BF2142 has ads for Intel ingame. There is so many companies out there just in the gaming industry alone where MA could be advertising for.

Now I know that some will bitch and moan about ads but come on. Would you not rather have a few billboards around with RL companies in exchange for knowing that MA is in a more stable position and your PED is ingame, rather than being used to feed the server hamsters?

Really, if MA get on the ball and use advertising and then let the deposits stay in game more for the players, it ends up a win/win situation for both parties. And that's the bottom line.
 
Numa said:
I don't take it personally as I very rarely understand these things. You need a whole Financial lesson just on how to open one, let alone read one. :laugh:

I will do a bit of reading on them though. Any ideas where to start?
Click to expand...

Start with this for example...

http://www.investopedia.com/articles/04/031004.asp

and you will see that: assets = liabilities + shareholders' equity ;)
 
coubo said:
Anyway, contingent liabilities of SEK51.0m vs. cash balance (or "payment readiness" as they call it them selves on the last page) of SEK31.8mm. The count is still not right.
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i think you are forgetting (though you havent as you've mentioned it) that they are only liable for TT. TT value is far, far less than the market value and as contingent liablity is effectivly deposits-decay skim, they are still likely very well covered for TT. Plus the total assets is still greater than the liabilites, they've invested cash into other assets presumably to grow the business. Revenues are up and they make a profit, all points to a healthy company. not as cash rich as a year ago, but thats not necessarily a bad thing if the money has been been reallocated wisely.

people need to stop worrying too much about their withdrawal value. if there is ever a mass exodus then the market value would fast approach TT. treat it like any hobby: its nice that you can get the money back, but not a biggy if you only get half back.

chevrons said:
If Mindark go bust, the RL creditors get first claim on MA's assets and Cash Balance.

That includes Employees, Government Taxes, Loans from Banks, Suppliers, Shareholders.
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As technically creditors, we'd be in front of shareholders who are always the very last in the que.
 
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