Info: Mindark Annual Report 2014

[billairboy]

I wonder about something.

How can a company work/operate in minus all those years and still "living"?

Old profits and investments from shareholders. The income statement can also be a bit deceiving. In the "Amortization and depreciation" cost you have the depreciation of the value of the Entropia Platform asset with around -3,5msek and previous year that was around -5,3msek. The value of the EU platform is not 0 in the balance sheet, so in 2015 they will not have any cost for the depreciation of the EU platform. So, they could do exactly the same in 2015, but the result would increase with 3,5msek because if this. If you take this in account the income statement is a bit better than what it seems to be, which you also can see in the cash flow.

 

[Thorns Rose]

Equity = Assets - Liabilities

And they did a loss from the sell of of the Mexico office, "Result from shares in group companies -831 303"
And their no such thing as creative accounting it's just accounting

Thanks for clearing that up,wasn't sure if that was part of it or not.

 

[Mega]

 

[sawachika]

Out of curiosity..wouldn't the "equity" be a reflection of the already accrued "fixed assets?" The sale off and closing of Mexico office and staff,may have helped those numbers a bit. (also that creative accounting reporting.)

Well, the reason I did those deductions is because,

• the 2014 fixed assets value of 20 481 Tsek appears to have come from pg 10's "total non-current assets" (20 481 417). And in that, you can find the "Deferred Tax" under "Financial assets".
• the 2014 total assets value of 32 015 Tsek appears to be a sum of both "Current Assets" & "Non-Current Assets". And as its inclusive of the "Deferred Tax", I took the liberty to deduct accordingly as well.
• the 2014 equity value of 20 383 Tsek appears to come from pg 11's "Equity attributable to parent company shareholders" (20 383 348). However, in pg 25's "Note 17", that value appears to be derived out of "Share capital", "Other contributed capital" & "Other equity including profit for the year". But particularly under "Other equity including profit for the year", you can see a "Net Profit (not loss) for the year" value of 4 820 199. And this value comes from pg 9's "Net Profit"...which again you can find the "Deferred Tax" just right above it (but named as "Income Tax"). And because the "Net Profit" took into account the "Deferred Tax", I (again) took the liberty to reduce it from the 2014's "Equity" value.

And just for the account, pg 20 tells us that the employees and board directors took a paycut and as personnel were reduced, the expenses needed to pay as wages decreased. And probably, that would explain the positive cash flow?

 

[Konve]

From the Swedish report, note 27:

I koncernens och moderbolagets redovisning utgörs den operationella leasingen i allt väsentligt av hyrd fastighet. Avtalet om hyra av den svenska fastigheten löper på tre år med möjlighet för företaget att förlänga med ytterligare perioder. Nuvarande hyresavtal går ut 2015-09-01 och bolaget har i februari 2015 skrivit på för ytterligare tre år. Därav inga avtalskostnader senare än ett år vid bokslutsdagen.

Hyra fastighet? Wait, that's not possible. Literally. Leasing? Get real. It's an arrende. Quit your molesting of the Swedish language.

Storleken på de framtida leasingavgifterna baseras på utvecklingen av konsumentprisindex. Bashyran skall anpassas till indextalet för oktober månad under den perioden. Skulle indextalet någon påföljande oktobermånad ha stigit i förhållande till bastalet, skall tillägg utgå med det procenttal varmed indextalet ändrats i förhållande till bastalet.

Standard arrendeavgiftsklausul.

Twats.

 

[Valdes]

This game became a ponzi scheme the moment MA decided to start using PED funds to fuel their operations.

MA is funneling cash out of the game in the form of executive salaries (financial report does not hide that in the slightest). When the company goes bankrupt, the only ones who lose are the players with investments. The players trying to squeeze the most PEDs out of their investments are going to be the ones who lose the most.

It looks to me that they're betting everything on their new IP (ComPet) and it's a race against time as the Entropia bubble grows to it's brink...

 

[Futurama]

This game became a ponzi scheme the moment MA decided to start using PED funds to fuel their operations.
....

Isn't that happening like for ever?

 

[Spawn]

This game became a ponzi scheme the moment MA decided to start using PED funds to fuel their operations.

MA is funneling cash out of the game in the form of executive salaries (financial report does not hide that in the slightest). When the company goes bankrupt, the only ones who lose are the players with investments. The players trying to squeeze the most PEDs out of their investments are going to be the ones who lose the most.

It looks to me that they're betting everything on their new IP (ComPet) and it's a race against time as the Entropia bubble grows to it's brink...

A ponzi scheme that runs for over 12 years.. wow. That must be a record.

and from your link:

When a Ponzi scheme is not stopped by the authorities, it sooner or later falls apart for one of the following reasons:

1) The promoter vanishes, taking all the remaining investment money (which excludes payouts to investors already made).

Into thin air? Would be rather hard in this day and time.
2) Since the scheme requires a continual stream of investments to fund higher returns, once investment slows down, the scheme collapses as the promoter starts having problems paying the promised returns (the higher the returns, the greater the risk of the Ponzi scheme collapsing). Such liquidity crises often trigger panics, as more people start asking for their money, similar to a bank run.
people asking for their money and waiting 3 months of business days.
3) External market forces, such as a sharp decline in the economy (for example, the Madoff investment scandal during the market downturn of 2008), cause many investors to withdraw part or all of their funds.
Let's wait for the next collapse of the economy.. I'm looking forward to a growing economy at the moment

 

[shoti]

Isn't that happening like for ever?

Case is MA 'used out' floating deposit amount/inside EU economy value/initial depos and now all withdrawals need to wait for new deposit. This is causing "taxation" of players activities (ceasing ATH's lowering results etc.) to fix this hole.

Unfortuantely higher taxation of activities lead to even less deposits, and there is minimal amount of peds MA have to earn in order to upkeep staff and servers.

What we are obserwing is increased taxation ( eternal events+lower returns+not often ATH's+lower CLD's payouts) , reducing costs ( closing Illunova office, reducing No of amplyed, reducing salaries ) in order to keep operational....in other words MA is shrinking proportionally to their shrinking net sales

 

[Futurama]

Case is MA 'used out' floating deposit amount/inside EU economy value/initial depos and now all withdrawals need to wait for new deposit. This is causing "taxation" of players activities (ceasing ATH's lowering results etc.) to fix this hole.

Unfortuantely higher taxation of activities lead to even less deposits, and there is minimal amount of peds MA have to earn in order to upkeep staff and servers.

What we are obserwing is increased taxation ( eternal events+lower returns+not often ATH's+lower CLD's payouts) , reducing costs ( closing Illunova office, reducing No of amplyed, reducing salaries ) in order to keep operational....in other words MA is shrinking proportionally to their shrinking net sales

I'm not arguing that, it may very well be true. But do you even remember when MA actually had enough money to cover all the PEDs ingame? I sure don't...

 

[billairboy]

From the Swedish report, note 27:



Hyra fastighet? Wait, that's not possible. Literally. Leasing? Get real. It's an arrende. Quit your molesting of the Swedish language.



Standard arrendeavgiftsklausul.

Twats.

What... How many Swedish people have you heard saying "Jag arrenderar min lägenhet"?

 

[xaph]

chocho

 

[billairboy]

What we are obserwing is increased taxation ( eternal events+lower returns+not often ATH's+lower CLD's payouts) , reducing costs ( closing Illunova office, reducing No of amplyed, reducing salaries ) in order to keep operational....in other words MA is shrinking proportionally to their shrinking net sales

Well, it was pretty clear from the previous two annual reports that they would be forced too cut down on the number of employees because of the need to cut the cost.

One thing to remember, and to take in to account, is that MA is sharing it's revenue with other planet partners. So if a bigger share of the EU players are on other planets than Calypso the profit for MA will decrease. It would be interesting to see the account's for Arkadia.

What I'm a bit unsure about is where the revenue sharing to the other PP are done, is it deducted from the revenue or is it a part of the "other external costs"? I would like to know that.

 

[Andreso]

One thing to remember, and to take in to account, is that MA is sharing it's revenue with other planet partners. So if a bigger share of the EU players are on other planets than Calypso the profit for MA will decrease. It would be interesting to see the account's for Arkadia.

MA always get their cut no matter what planet players are, its PP that are sharing income from players

 

[Valdes]

A ponzi scheme that runs for over 12 years.. wow. That must be a record.

and from your link:

When a Ponzi scheme is not stopped by the authorities, it sooner or later falls apart for one of the following reasons:

1) The promoter vanishes, taking all the remaining investment money (which excludes payouts to investors already made).

Into thin air? Would be rather hard in this day and time.
2) Since the scheme requires a continual stream of investments to fund higher returns, once investment slows down, the scheme collapses as the promoter starts having problems paying the promised returns (the higher the returns, the greater the risk of the Ponzi scheme collapsing). Such liquidity crises often trigger panics, as more people start asking for their money, similar to a bank run.
people asking for their money and waiting 3 months of business days.
3) External market forces, such as a sharp decline in the economy (for example, the Madoff investment scandal during the market downturn of 2008), cause many investors to withdraw part or all of their funds.
Let's wait for the next collapse of the economy.. I'm looking forward to a growing economy at the moment

Your estimate of 12 years is inaccurate because the game did not begin as a ponzi scheme -- Legitimate businesses can become ponzi schemes once investors are paid with new investments rather than operating profits...

In 2007, Mind Ark was fully capable of backing every PED in the game with $5.49M liquid funds to back $4.18M of PED (131%). That's a far cry from today where MA has $450k liquid funds to back $11M PED (4%).

If you want to be technical about it, the game became a Ponzi scheme in 2008 which is when MA wasted a ton of money with their FPC / CryeEngine2 ideas and everything went downhill. 7 years? That's not even close to a record; Depending on the size, ponzi schemes can last decades.

MA has been cannibalizing PED funds to keep their business afloat -- How much lower than 4% can they go? The smarter thing for MA to do was to grow the deposits in short term investments (still considered liquid for accounting purposes) to assist with their revenue stream. They did this for a time and eventually got greedy -- They grossly over expanded and now they are paying the price for that.

 

[billairboy]

MA always get their cut no matter what planet players are, its PP that are sharing income from players

Yes, but MA owns the biggest planet Calypso so they got that cut to.

 

[billairboy]

MA has been cannibalizing PED funds to keep their business afloat -- How much lower than 4% can they go? The smarter thing for MA to do was to grow the deposits in short term investments (still considered liquid for accounting purposes) to assist with their revenue stream. They did this for a time and eventually got greedy -- They grossly over expanded and now they are paying the price for that.

I don't understand what you mean by "PED funds"?

Anyway, I think the problem is that they expanded a bit too much in the years 2007-2010 and that in combination with a decline in the world economy in 2008 and the concept with planet partners that force them to share revenue with them is the biggest cause to the weak financial performance.

I also think they soon will be forced to do something about the withdrawals and unconsumed peds.

 

[shoti]

I don't understand what you mean by "PED funds"?

[...]

I also think they soon will be forced to do something about the withdrawals and unconsumed peds.

Thereis not much they can do about withdrawals. Problem is serious since 2012. Only larger umber of depositors can be base for changes. But looking on number of active participants which is decreasing deposit problems will be present till end of MA or some miracle. Fortunatelu c.a. 20% lesser number of active players is responsible for few % decrease in net sales. That mean playerbase consist now of most faithfull player and heavy investors. Casuals retention is teryfying.

As for unconsumed peds thats proces started already. It's made by inflating ingame funds, especialy precious gear and equipment. Easily done by introducing new beter equivalents in large quantities while player base is decreasing. At the moment we are somwhere between 15 and 20 % per year and already few years in the process.

Normally closing unprofitable company at full run is very costly. So called "soft landing" is much more cost efficient.

 

[billairboy]

As for unconsumed peds thats proces started already. It's made by inflating ingame funds, especialy precious gear and equipment. Easily done by introducing new beter equivalents in large quantities while player base is decreasing. At the moment we are somwhere between 15 and 20 % per year and already few years in the process.

I honestly did not understand one thing of what you tried to say with this....

 

[DoubleWolf]

So they are still operating at a loss and their net sales are the lowest they have been in the last 5 years.

Minus the deferred tax, their assets have grown smaller. Or in other words, without that tax, the company actually lost size, all while the Unconsumed User Holdings grew larger.

On the plus side they have a little more cash in their account...

I cashed out a year ago because of the poor financials trending in the wrong direction. I'd like to jump back in if they showed me some strength that would give me confidence that they would be around in the near future.

This financial statement does not make me regret my decision...

 

[atomicstorm]

I honestly did not understand one thing of what you tried to say with this....

Usually the case when he posts.

 

[valentin]

I actually think that MA will go bankrupt and be bought by Dave who owns Planet Arkadia ... have a strong feeling about this.

Dave has been playing this game for many years before he became Planet partner so he knows what is required and desired of this game.

 

[GoNi]

In past we had ingame advertisement at the screens from external companies and organisations.
Last years I haven´t seen any of those, part income for MA missing!

MA created a webshop, did MA ever think about getting sponsor pay on board, so players could raise some PED by clicking adverts aso? MA could raise a lot of money considering that, at least 50% of advertisement income through sponsor pay could go into MAs balance if introduced properly.

There is a lot more MA could do to raise money, beside draining PED from players who deposit.

What could EU players do to get MA back onto the profit road, well deposit more.
Buy this damn Compet Deeds although its open when it will drop some revenue.
Use income from CLD/AUD to play the game instead withdrawing every month.

Although I have a fair amount of CLDs, that would be enough to play completely without deposits, I still do my 10 Euro deposit every month.

What I see ingame, is non depositors aiming on profit.
What I hear is, if hit big grab your money and run (withdraw), instead using the profit for skilling as we did in the past.

Its the attitude of the playerbase, the badmouthing about MA, and many other issues caused by playerbase that make it hard for MA to survive in business.

How should new players trust in MA if you hear every second thread MA is thiefs and other damn bad publicity.
Start beeing positiv about EU in the forums, and EU will turn possitiv.
Its not a joke, look at this forum full of negativity, actually I hate it very much to read one whinning thread after another, and no one posting positiv things.

I like EU very much, never withdrawed a dime and don´t consider doing so in the future.
I want to play that game and keep it alive, not make a living of it.
I play for fun, so I pay for fun, and its still relative cheap compared to some of my other hobbies (cost / hour).

Its not MAs fault if EU dies at some point, its players fault.

Heads up to MA, you are doing a good job.
I am looking forward to the future and hope for improved EU experience.

Soon we will see the land plots for CLDs - another positiv thing MA did.
Check the thread about it, and you will know what I am talking about.
Nobody said: Great it comes - thank you MA

Well I do! ---> Thank you MA !!!

Now going to web shop and buy some more Compet Deeds (from MA not from other players) - just to help them to get their finances fixed.

Looking forward to positve anual report 2015, when it comes next year !

And no SKY is NOT falling!

 

[valentin]

In past we had ingame advertisement at the screens from external companies and organisations.
Last years I haven´t seen any of those, part income for MA missing!

MA created a webshop, did MA ever think about getting sponsor pay on board, so players could raise some PED by clicking adverts aso? MA could raise a lot of money considering that, at least 50% of advertisement income through sponsor pay could go into MAs balance if introduced properly.

There is a lot more MA could do to raise money, beside draining PED from players who deposit.

What could EU players do to get MA back onto the profit road, well deposit more.
Buy this damn Compet Deeds although its open when it will drop some revenue.
Use income from CLD/AUD to play the game instead withdrawing every month.

Although I have a fair amount of CLDs, that would be enough to play completely without deposits, I still do my 10 Euro deposit every month.

What I see ingame, is non depositors aiming on profit.
What I hear is, if hit big grab your money and run (withdraw), instead using the profit for skilling as we did in the past.

Its the attitude of the playerbase, the badmouthing about MA, and many other issues caused by playerbase that make it hard for MA to survive in business.

How should new players trust in MA if you hear every second thread MA is thiefs and other damn bad publicity.
Start beeing positiv about EU in the forums, and EU will turn possitiv.
Its not a joke, look at this forum full of negativity, actually I hate it very much to read one whinning thread after another, and no one posting positiv things.

I like EU very much, never withdrawed a dime and don´t consider doing so in the future.
I want to play that game and keep it alive, not make a living of it.
I play for fun, so I pay for fun, and its still relative cheap compared to some of my other hobbies (cost / hour).

Its not MAs fault if EU dies at some point, its players fault.

Heads up to MA, you are doing a good job.
I am looking forward to the future and hope for improved EU experience.

Soon we will see the land plots for CLDs - another positiv thing MA did.
Check the thread about it, and you will know what I am talking about.
Nobody said: Great it comes - thank you MA

Well I do! ---> Thank you MA !!!

Now going to web shop and buy some more Compet Deeds (from MA not from other players) - just to help them to get their finances fixed.

Looking forward to positve anual report 2015, when it comes next year !

And no SKY is NOT falling!

Do not agree with everything. The problem that the year 2007 was MA greedy 0ch until 2010 they did many wrong decisions that cost today and only thing they was good at was nerfs from 2006-2013 but lately they have started to think a little bit and started to try other avenues.

Do not tell me that it's the players' fault that everything in the game has plummeted in value.
1. All kinds of items.
2. All kind of skills.
3. All kind of loot.

I'm not surprised that the financially strong players flees.

 

[billairboy]

Do not agree with everything. The problem that the year 2007 was MA greedy 0ch until 2010 they did many wrong decisions that cost today and only thing they was good at was nerfs from 2006-2013 but lately they have started to think a little bit and started to try other avenues.

I don't know exactly what you mean by greedy, it was not like they earned a lot of money before. The planet partner concept have cost them some of the income, even if I think it a good concept in the long run, in the short run it cost them a bit. The CLD sharing have also cost them some income, the SEE partner fiasco probably also cost them some money and the Mexico office also probably was not worth the money. It's look like they have slimmed down to operation a bit to cut cost. Even if it's interesting with the Compet app, I'm not sure it's a cost effective project right now. I'm sure they will show a bit of real profit in 2015, they seemed to have decrease the cost so it more in level of what they can handle.

What feels a bit odd is that they say the marketing in 2014 was successful and showed good result, when we have such a decrease in deposits.

 

[Count Joe]

I actually think that MA will go bankrupt and be bought by Dave who owns Planet Arkadia ... have a strong feeling about this.

Dave has been playing this game for many years before he became Planet partner so he knows what is required and desired of this game.

Lets hope they sell it before they go bankrupt. Coz if MA would go bankrupt the game would be over for good.

For example:

Who would wanna buy a company where they can end up buying back 50 miljon ped?
Who would wanna deposit a lot of money and try make it when the company cant even do it?
Who would trust the value of an item. What would u be willing to pay for a imk2 when the game came back online?
so lets hope they dont

the scenario that I think would happen is that someone would buy the platform etc and start a new game from scratch.

 

[Count Joe]

Its not MAs fault if EU dies at some point, its players fault.

what a dumb thing to write.
Its always the companies fault they went bust.
Dont you understand that?

Or dont u understand the customer - company relationship?

 

[GeorgeSkywalker]

What feels a bit odd is that they say the marketing in 2014 was successful and showed good result, when we have such a decrease in deposits.

That is interesting.

 

[Pandoras_box]

Problem is in CLDs.
Many big depositors bought a lot of them and stopped depositing. They are waiting for weekly payouts instead. And so we see lower deposits over last few years.
MA had to adapt, so they added stuff like explo bp, nerfed hunting even more (shrapnels) and - as it seems - they are trying to get out as much markup as possible.

They put themselves in a very bad position. And I´m really curious, how - and if - will they find the way out of it.

Anyway - MA can get out of its problems. But they have to change their behaviour. Because the only scheme, we have seen over years - do we miss money? Lets go nerf game even more - wont be succesfull for ever. Its on the edge right now.

Still, I have fingers crossed for MA and for this game.

 

[SpikeBlack]

the scenario that I think would happen is that someone would buy the platform etc and start a new game from scratch.

But would they? Who'd buy a PC platform when we're in a world dominated by consoles.

MA's biggest mistake was making EU more like a solo game it was the community that kept people logging in and bringing in new players.

EU in it's heyday was a laugh when played in a casual manner, e.g. spend a couple of hours dancing on a roof chatting or showing a newbie around, we chose how to play but in recent years that's been lost to the point if you're not spending every second grinding an event mob or mission chain it feels like you're not wanted.