Info: Semai's Analysis - Semi Annual Report January -June 2010

[AJack10600]

Hi all,

Having asked for it in this thread https://www.planetcalypsoforum.com/...A-or-FPC-Half-Year-Financial-Results-for-2010 MA posted something a few days later on here:

http://www.mindark.com/press/financi...un2010_eng.pdf

So what to make of it. Here is my 2 Pec on it for those interested.

I am sorry but some of the content only makes sense in comparison to the older financial reports and so you need to have those in mind when you make comparisons. Unfortunately MA have never Published the Year end Reports for 2009 in English and I don't speak Swedish... make of it what you want.

Objectively

Profit

- Net Sales have gone down considerably both in comparison to first half of 2009 or compared to second half of 2009.
- Operating Expenses have more or less stayed stable even with the additional headcount, so MA are trying to save money somewhere. Salaries have definitely not increased.
- The overall negative Operating Profit is to be expected with reduced net Sales. This time around, MA can not Capitalize the Cost for the Cry Engine upgrade anymore. This is now affecting Profits. Depreciation now kicks in. Note that these Capitalized Expenditures should have been depreciated against future income (which is not happening ).

Balance Sheet

- Intangible Assets are coming down as the IT platform is depreciated.
- If the Parent Company's Financial Assets are 10M SEK and the Groups Financial Asset are 3M SEK, that leaves FPC with 7M negative Financial Assets .... I have no idea what this means. I would like some explanations. Is this obligations towards MA ? i.e Liabilities ?
- Total Equity of the Group is 50M, MA Equity is 38m, so FPC ( maybe + rocktropia parts ) = 12m SEK= 1.8m USD Equity Value !!! It is out of the question that FPC can "pay" MA 6m USD for it's share in the Company with it's own funds... An investor must be at hand. This will not be a Management Buyout... or I would like to know which bank is funding this...

And just for FUN: The Total Equity i.e. the Value of the Company is 63m SEK... The Total Value ( Note this is TT value !!! ) of the Items and PEDS of the users in the game is to be valued at 63M SEK !!!! Think about it... So if anybody realises that MA is going bust and if we all suddenly start to try to withdraw ... there is no way you would get a cent back... MA can not guarantee for any of your cash as there are no funds available.... no reserves.

Cash Flow ( My favourite )

Not surprisingly MA are not doing well here again... Although the statement might give you the impression that there was an increased inflow of cash, they do not show the outflow of cash by the users in the statement. I am not sure but it seems they are missing somewhere... Of course... because that would show that players have withdrawn more money from the game. If you read the introduction carefully though, you can see that: "End users net contribution for the first six months was 20.8m SEK compared to 32M SEK the previous year". This means that since last year the Cash received was 32m and net contribution was 32m, hardly any funds have been withdrawn. This year, 32m was received but 11m was withdrawn... If I am right on this assumption then I am worried... has Neverdie pulled out massive funds ?

Cash flow is negative anyhow... Bank balances are eaten up... Liquid Funds are just 1.2m USD... That is probably just about ennough to keep running daily operations... for now.

Overall

I don't have ennough details to give full explanations or to guarantee for anything. MAs reports are not very transparent.

What is more important to me is the few lines at the beginning of the reports which show the real state of the company:
- The German Property will be sold as soon as possible
- Sale of Subsidary ( 6m USD in funds ) MA is selling it's child...
- Revenue Share agreement: Translation, you pay me cash now and keep more revenue in the future. This is to fix the Cash flow hole MA has. MA has received 5.2M SEK in cash until June already and is part of the Operating Income !!! So it's probably part of Net Sales which is realy really worrying me anyway...
- Economic development: They realised they have done no marketing...
- Operating Costs have gone up... Why ? Why do you need that ? Explain...
- 20M new shares to be issued... Great, that beefs up Capital and we are back in Profit !!! Until the negative cash flow eats it all up again...
-Three of the old 4 Members of the board of directors have left... right.

SO... what to make of it... I leave it up to you...

I maintain my stance... FPC is a great concept a great idea, a brilliant game. I do not understand the way MA are doing Business, they are running a very risky strategy of very agressive growth. The concept of making money by being a service provider of a platform seems to have led to a decline in revenues of their former core business FPC and it does not seem to take off at all. Maybe there are things we don't know and there are future Incomes around the corner when new planet partners join. I can not tell.

At this rate, MA should maybe concentrate on supporting their Planet Partners to help them generate more revenue... does this mean decreasing cost so that more players will deposit and play ? Probably not... MA can not afford to wait until revenues would pick up again.

I would be most interested to see a detailed Financial Report for both MA and FPC but overall the picture is clear. MA is pretty much in the same situation as at the end of 2009. Nothing has changed in the last 6 Months... the thrend prevails. Road to death or to a high risk chance of a bright future ?

I hope MA will make the right decisions.... I don't want my game to go bust.

 

[TheOneOmega]

I wonder if there is anything we can do to help, specifically those of us who are not in a position where it would be wise to deposit. Perhaps a representative from MA could post some ideas in this thread for ways we could help bring in new players.

 

[Wollongong]

As usual... Semai has come up with a pretty well argued case.

And I feel dumb again, because I have deposited only two weeks ago

 

[Menace]

IMO MindArk should drop a fist full of high end items to try and bring some cash into the game.

Why?

1.) People will deposit to buy those items. Even if the looter sells the item and cashes the PEDs out.... MA will make SOME money on the deposit/withdraw fees.

2.) Dropping more items will lower the value of the current items. This means more people may feel that a higher level of game play is attainable AND there will be less for MA to have to pay out if someone sells a high end item and cashes it out. For example. If I have a Mod Fap worth 300k PED right now and 20 more drop. My fap might only be worth 225k. I may be pissed off.... but can only withdraw 225k as opposed to 300k.

MA also needs to drop a SHIT TONNE of UL items which are GOOD mid level items. Why? Because they'll make a SHIT TONNE of decay as opposed to forking out higher TT Value to give it all away. UL LR53 equivilant can be dropped at 2 PED TT value and someone will constantly repair it. 300 PED TT LR53 costs MA 300 PED as opposed to 2 PED and they don't make any decay off them. On top of that.... people don't put sights/scopes on maxed (L) weapons.... but they do on un-maxed UL weapons.

If MA started dropping TONS of good gear more people would stick around and pay to play with good gear at a reasonable price. Don't get me wrong... I understand the players who currently own high end items would suffer financially..... HOWEVER, do they want to please a handful? Or stay in business.

Just my 2 pec on how they could bring in a VERY large amount of cash VERY quickly.

In the end, if MA is really in trouble, they should come forward and ask the player base our opinions and just filter through the garbage and implement the good ones. The reality of it is... having players like the high end players being worth so much money is no longer a "selling point" for the game like it used to be.

Menace

 

[aridash]

And just for FUN: The Total Equity i.e. the Value of the Company is 63m SEK... The Total Value ( Note this is TT value !!! ) of the Items and PEDS of the users in the game is to be valued at 63M SEK !!!! Think about it... So if anybody realises that MA is going bust and if we all suddenly start to try to withdraw ... there is no way you would get a cent back... MA can not guarantee for any of your cash as there are no funds available.... no reserves.

if anyone is to sell out they need a buyer with cash. that buyer needs to deposit or sell items to other buyers, etc. if there is a rush for the exit the values of items will drop so the reserves a near irrelevent. (unless one believes there are thousands of ped on pedcards waiting, then that could be a problem).

...The concept of making money by being a service provider of a platform seems to have led to a decline in revenues of their former core business FPC and it does not seem to take off at all.

i dont see why you draw this conclusion? why is the decline in revenues not the result of wider economic issues or the way the FPC planet is run (see above about no decent loot)? their refocusing onto the platform model doesn't mean they have done anything differently. yes, the strategy has led to certain costs and investments, but there nothing to make a link to short term revenue.

 

[py08jl]

Think about it... So if anybody realises that MA is going bust and if we all suddenly start to try to withdraw ... there is no way you would get a cent back... MA can not guarantee for any of your cash as there are no funds available.... no reserves.

this is the same for bank IRL, where if everyone wanted to withdraw all they cash, the bank will simply die since they dont have the cash. tho MA is technically not a bank.... but hey, the word "deposit"..... hum.... whatever. If MA is doing crap, we as players are also doing crap (in terms of loot, or whatever).

 

[sky west]

Some very good points and questions.

What I wonder about, is wether

GROUP - PARENT COMPANY = FPC is correct?

I personaly can't imagine ND(or other planet partners other then FPC) as part of the group. Assuming this is correct and looking at the income statement this would mean that the % between FPC net sales(20.805 - 9.152) and MA(9.152) sales is 56% generated by FPC and the other 44% by MA.
Yet when you look at operating expenses you see that MA is responsible for over 84 %(30.343 / 35.731) of the operating expenses. Although I'm no financial expert, it also makes little sense other than the fact that MA is not very cost effective.

Also when you look at the balance sheet you see that the (GROUP - PARENT COMPANY) entity hardly exists. I wonder what that's all about. Still alot of confusion who owns what and who gets what.

As for the player withdrawls, it's said in the text that these are net sales. So the withdrawls are already deducted from them. This makes finding the player withdrawls easy by deducting 'Cash recieved from customers' from 'Net Sales' making 11,577 Mil. SEK. I don't know if this is actually true, just speculation on my part.

 

[jtostenr]

- Sale of Subsidary ( 6m USD in funds ) MA is selling it's child...

Actually, if I read the report correctly, MA is buying the rights to Calypso from FPC. It is worded a bit strangely. Were the planet rights given/sold to FPC when FPC was first created? Interesting that MA wants them back.

Wouldn't it make sense for each of the planet partners to own the rights to their own planets?

More generally, this (general financial health of MA) concerns me more than stretches of crappy loot. If MA were to go belly up, I doubt that anyone would ever see a dime.

Jeff

 

[jtostenr]

Some very good points and questions.

What I wonder about, is wether

GROUP - PARENT COMPANY = FPC is correct?

I personaly can't imagine ND(or other planet partners other then FPC) as part of the group. Assuming this is correct and looking at the income statement this would mean that the % between FPC net sales(20.805 - 9.152) and MA(9.152) sales is 56% generated by FPC and the other 44% by MA.
Yet when you look at operating expenses you see that MA is responsible for over 84 %(30.343 / 35.731) of the operating expenses. Although I'm no financial expert, it also makes little sense other than the fact that MA is not very cost effective.

Also when you look at the balance sheet you see that the (GROUP - PARENT COMPANY) entity hardly exists. I wonder what that's all about. Still alot of confusion who owns what and who gets what.

As for the player withdrawls, it's said in the text that these are net sales. So the withdrawls are already deducted from them. This makes finding the player withdrawls easy by deducting 'Cash recieved from customers' from 'Net Sales' making 11,577 Mil. SEK. I don't know if this is actually true, just speculation on my part.

I don't think FPC is part of the group, based on what is said under "Sales of Subsidiary".

The remainder of GROUP - PARENT COMPANY may be the small portion of MA that is in Germany. I know that the company I work for creates a separate legal entity for each country it operates in. Then again, I could be completely wrong

Jeff

 

[JJO]

Im not even kidding when i say, i was about to swipe my CC to the max for skills and gear, after a 1 year break.

Now that I've seen this, till I have some proper clarification. The CC stays unswiped.

 

[sky west]

IThe remainder of GROUP - PARENT COMPANY may be the small portion of MA that is in Germany.

That makes for 56% of the net sales? I don't think so.

 

[GradenFoss]

Just two quick observations. Haven’t had any time to give any deeper thoughts to the matter yet.

...[Analysis]...

Analysis seems to be missing out on following statement: »Forecast for Second Year of 2010 The trend with decreasing net contributions has been broken for the continuous operations during the third quarter. For the third quarter, the forecast amounts to approximately 13 million SEK. The profit for the coming six months is expected to be better than the previous ones.«

What I wonder about, is wether

GROUP - PARENT COMPANY = FPC is correct?

At least EUSO AB is another subsidiary of the MindArk Group, where lots should be going on atm.

 

[BlueEyes]

This means that since last year the Cash received was 32m and net contribution was 32m, hardly any funds have been withdrawn. This year, 32m was received but 11m was withdrawn... If I am right on this assumption then I am worried... has Neverdie pulled out massive funds ?

Is RT a seperate company?

Because, and what if he did pull out massive funds? I would have withdrawn it and put it in RT/my own company, which means part of it will flow back to MA, because of the platform/licensing costs.
And as RT does not exist that long, not much in the financial statement will reflect the current developments.

Maybe Neverdie has been given the ability not to pay, until his own planet was launced and there is income of which MA gets a share, which will only be reflected in the next financial statement.

There is a lot we don't know, so this financial statement says something about the past. While it can be an indication for the future, it may as well be of zero value, because of all the developments like RT, Next Island, FPC, etc...

 

[billairboy]

Intangible Assets are coming down as the IT platform is depreciated.
- If the Parent Company's Financial Assets are 10M SEK and the Groups Financial Asset are 3M SEK, that leaves FPC with 7M negative Financial Assets .... I have no idea what this means. I would like some explanations. Is this obligations towards MA ? i.e Liabilities ?

When they consolidate (create) the balance sheet for the group they remove the value of the shares in the subsidary, FPC. So the "missing" 7m are the value of the shares in FPC. If you don't do that the value of the subsidary is counted "twice".

Not surprisingly MA are not doing well here again... Although the statement might give you the impression that there was an increased inflow of cash, they do not show the outflow of cash by the users in the statement. I am not sure but it seems they are missing somewhere... Of course... because that would show that players have withdrawn more money from the game. If you read the introduction carefully though, you can see that: "End users net contribution for the first six months was 20.8m SEK compared to 32M SEK the previous year". This means that since last year the Cash received was 32m and net contribution was 32m, hardly any funds have been withdrawn. This year, 32m was received but 11m was withdrawn... If I am right on this assumption then I am worried... has Neverdie pulled out massive funds ?

The withdrawals are included in "cashed recieved from customers", this also includes "other operating income" and change in current assest and short term liabilites i guess.

Some points:

• Because of a stronger swedish currency compared to last year, about 10 % of the decrease of income could be because of deposits are done in USD. A weaker USD means less income in SEK with the same amount of USD deposited
• Rocktropia is online and takes some of the income. Lets say 4 % of the players consumes their peds on Rocktropia, half of those peds goes Rocktropia, not the MA+FPC group. The MA group would get a 2 % decrease in the income even if the player put in the same amount of money as the year before. This effect will be even bigger when more planets comes online

My conclusion of the report:
Pretty much the same as after the annual report, nothing much new. MA must get more money and they will probably get them by issueing more shares and it's time for some marketing, we need more players now. I think they have expaned and hired to much people, but at the sametime i guess it hard to avoid.

 

[Atraie]

My thoughts.

At first glance it looks kinda glib, but there are a few howevers.

On the state of player assets....

Total value of player in game assets went up for 1H 2010 vs 1H 2009. So that means deposits:withdrawels ratio went up. Which is good. Either people withdrawing profits made on the game are lower, or people selling out is lower. Either is good for the rest of the players.

They say 63 mill sek of player assets. I wonder how much of this is on accounts that are forgotten or accounts that have less then 1000 ped. A pretty large portion i would wager. As of January 5 2009 they had >800000 accounts(from the old eu site that listed subscriptions). The new site doesn't have account numbers, but i would imagine its at least 900k now and possibly close to one million. If we assume that 800,000 accounts are not actively played and the have 10 ped each. That's 8M ped, or 5.2M SEK. I would guess that there is a good bit more then that in inactive accounts, and active accounts that have <1000 ped on them. I don't think 15-20M SEK would be out of the question for an estimate. So the real player assets that MA might be liable for is maybe 40M SEK....all thought i still think that's far too high. And that's not as glib compared to their assets.

As far as them not having enough cash on hand to let every player withdraw today.... Well that's true of EVERY single bank! No bank can give out cash for every depositor on the same day, they don't keep enough reserves. MA isnt a bank, but its a good analogy. Low cash on hand is a concern, but not for that reason.

They have 80 employees....they hired 15 more in 1H 2010 then 1H 2009, so thats good for the game i would think. One could interpret that they are fairly confident in their income streams, or else why would they grow their payroll by 23%.

The financial statement concerns me, but from a strict game player standpoint, the outlook isnt that grim.

----------------

What i think they need to do...

Market, and market now. They need more players...

Address average returns, so people can play longer on the same amount of ped. It doesnt cost them much more if people play more(its just unused server capacity atm, and maybe a few more log hard drives, maybe a few more support cases. In the end the cost increase is minimal if everyone played twice as long). This will likely lead to more depositis as less people would leave over the game costing too much/hour. (tho this could possibly lead to a short term drop off in deposits).

An easy thing they could do is cut the large hofs by 10 and increase the frequency by 10. Making 10 people happy with a 1000x hof is better then making 1 happy with a 10000x hof.

Drop more of the rare/good items. I know the people who own those stupid markup items will hate this. But it needs to be done. +10k-200k items are not good for the game; they certainly aren't worth that much in reality.

 

[billairboy]

Some very good points and questions.

What I wonder about, is wether

GROUP - PARENT COMPANY = FPC is correct?

I personaly can't imagine ND(or other planet partners other then FPC) as part of the group. Assuming this is correct and looking at the income statement this would mean that the % between FPC net sales(20.805 - 9.152) and MA(9.152) sales is 56% generated by FPC and the other 44% by MA.
Yet when you look at operating expenses you see that MA is responsible for over 84 %(30.343 / 35.731) of the operating expenses. Although I'm no financial expert, it also makes little sense other than the fact that MA is not very cost effective.

Because some of the balance and income are "eliminated" when creating the group, it is not as easy to say FPC=Group-parent.
For the income, the revenue from players are split 50/50 as i understand it between MA and FPC. But MA have much higher cost than FPC because they need more people and other resources to develope and run EU. FPC don't need the same amount of resources to run Calypso. That will create a situation where the "parent" MA company have high cost compared too the revenue, and FPC have a nice revenue/cost ration. But when more planets gets online and hopefuly more players join EU, MA will get more revenue without the need to increase their expansives with the same ratio. The cost of running EU with 300 000 players or 100 000 players will not be much diffrent i think.

 

[billairboy]

What i think they need to do...

Market, and market now. They need more players...

One odd thing about the marketing, MA don't do any marketing, the responsiblity are on the planet partners to do that. But MA needs more players, but if the planet parnterns don't do any markering what should they do? I don't know how the agreements looks like, but if i was MA i should have some kind agreement that force the planet partners to spend at least x % of the income on promotion.
I guess when more planet comes online, Cyrene and Next Island for example, they and FPC will start to promote harder because they compete against each other and the new planets must start from the beginning.

 

[Lavawalker]

I guess when more planet comes online, Cyrene and Next Island for example, they and FPC will start to promote harder because they compete against each other and the new planets must start from the beginning.

This is what I am waiting for before making any real assessment on MA & partners combined strategy.

It is too early in the piece to say anything bad about the operation thus far.

Sure things look not so well atm but once partners come online, including two due to come in the next years annual report (Next Island & Cryene), then a slightly clear picture can be assertained.

I think it will take a good two years to assertain properly what the future of MA will be like, bright or not so bright.

 

[billairboy]

This is what I am waiting for before making any real assessment on MA & partners combined strategy.

It is too early in the piece to say anything bad about the operation thus far.

Sure things look not so well atm but once partners come online, including two due to come in the next years annual report (Next Island & Cryene), then a slightly clear picture can be assertained.

I think it will take a good two years to assertain properly what the future of MA will be like, bright or not so bright.

I agree, the real test will come in 2011 when more of the planets are online. With the limited promotion from FPC and MA today it can't be that hard to increase the inflow of new players with the use of some real promotion?

 

[AJack10600]

if anyone is to sell out they need a buyer with cash. that buyer needs to deposit or sell items to other buyers, etc. if there is a rush for the exit the values of items will drop so the reserves a near irrelevent. (unless one believes there are thousands of ped on pedcards waiting, then that could be a problem).

No, this is TT value of Deposts...

i dont see why you draw this conclusion? why is the decline in revenues not the result of wider economic issues or the way the FPC planet is run (see above about no decent loot)? their refocusing onto the platform model doesn't mean they have done anything differently. yes, the strategy has led to certain costs and investments, but there nothing to make a link to short term revenue.

Then why are all other gaming worlds making record revenues during the economic downturn ? I think here it's pretty clear that reading the forum, the decline in revenues is because people are missing the Fun factor for their bucks...

this is the same for bank IRL, where if everyone wanted to withdraw all they cash, the bank will simply die since they dont have the cash. tho MA is technically not a bank.... but hey, the word "deposit"..... hum.... whatever. If MA is doing crap, we as players are also doing crap (in terms of loot, or whatever).

Yea but MA is more likely to go bust than a real life bank... and a RL bank has to hold a percentage of capital for all their deposits... MA has no reserve at all except the Peds on their Bank Account.

Actually, if I read the report correctly, MA is buying the rights to Calypso from FPC. It is worded a bit strangely. Were the planet rights given/sold to FPC when FPC was first created? Interesting that MA wants them back.

Wouldn't it make sense for each of the planet partners to own the rights to their own planets?

More generally, this (general financial health of MA) concerns me more than stretches of crappy loot. If MA were to go belly up, I doubt that anyone would ever see a dime.

Jeff

I think you got it wrong. MA made FPC it's own subsidy, and now they want to spin it off to get rid of it's 50% holding in return for cash. Unless i am getting it wrong

Just two quick observations. Haven’t had any time to give any deeper thoughts to the matter yet.
Analysis seems to be missing out on following statement: »Forecast for Second Year of 2010 The trend with decreasing net contributions has been broken for the continuous operations during the third quarter. For the third quarter, the forecast amounts to approximately 13 million SEK. The profit for the coming six months is expected to be better than the previous ones.«

Well I hope that MA are right here, I really do, but I believe it when I see it.

-----

Don't get me wrong, MA can still make the turnaround but as most of you are saying, MA really need more players in this univers and especially players who stick around and who deposit !!!

People only deposit when they get value for money... The game does not have to be expensive to generate revenues !!!

If your 10 USD are gone in 1 hour ambul hunting then that is not ennough return for money... people just stop to deposit and leave...

If people could have fun for a month on 30 USD, hell they would deposit !!! THey do it for other games...

I hope MA understand this one day... before it's too late...

 

[Wildman Alpha]

You can drop all the items you want it won't do anything but devalue the current ones. That means players see their investments disappearing and that will lead to mass sell-offs.

What needs to happen to bring more cash flow is more NEW MID/HIGH END item drops that are worth purchasing (NOT (L) Crap). Also a larger player base as we see this happening now with the release of NextIsland and the public publicity David is expecting from that. When more planets open more players will come as each will have a public release date. I see the master plan from MA/FPC and future partners some people are spending a lot of REAL CASH to make this game happen it isn't folding any time soon.

But the (L) crap is one of the biggest generators of cash flow for MA since you need to keep purchasing these items to continue. I just wish more were out their that weren't TT FOOD.

 

[Menace]

But the (L) crap is one of the biggest generators of cash flow for MA since you need to keep purchasing these items to continue. I just wish more were out their that weren't TT FOOD.

But all they're making off this (L) crap is the transaction fee's (because it costs them 300 PED to drop a 300 PED (L) item. Don't you think it'd be smarter to drop it in UL version so that they can make decay?

Menace

 

[kosmos]

But all they're making off this (L) crap is the transaction fee's (because it costs them 300 PED to drop a 300 PED (L) item. Don't you think it'd be smarter to drop it in UL version so that they can make decay?

Menace

the continual markup paid drains the ped card in theory faster over time vs a unl item which is one time payment

 

[Mega]

In short...


Konfidence Killer.

Whose idea was it to buy a Kastle ??



Khrist.

 

[Atraie]

L or non L has nothing to do with it. 1 ped of decay is 1 ped of decay. 1 ped of loot is 1 ped of loot. Looting a 300 ped gun or 300 ped of oil is all the same to MA. The markup goes to other players and gets cycled back into their hunting; or gets cycled back to you when you loot and sell that same gun to someone else next time.

All L does is help foster a player economy. It forces you to keep interacting with the playerbase. Where as an unlimited item is a one time player interaction and then you only interact with the trade/repair terminals. Really everything should be L it forces the economy to be more fluid(not that im advocating they remove the ul items).

Doesnt really matter if they drop more of the same rare items now, or new items instead. Players need to feel they have a shoot at decent gear from hunting themselves. (obviously it matters in terms of devaluing current items, not talking about that) Payers need to feel they are getting value for their deposit(need to be able to play longer/ped). And players need to feel they are making progress toward a skill goal.(id argue they went too far in the skill nerf way back when) Some games you can level in a day, or get multiple levels in a day. In entropia its a level in a year(at least on the higher levels). Level in a day is too easy, level in a month, or a year is far too long.

 

[aridash]

I think here it's pretty clear that reading the forum, the decline in revenues is because people are missing the Fun factor for their bucks...

that was what i was saying. their business strategy of a platform is neither here nor there when it comes to how they are manage the daily operations of the game itself, and they spun out the business unit dealing with content. poor returns (or at least the perception of) and nothing interesting to loot makes for a dull game experience. which is a shame since they've invested so much time in the new engine.

 

[mczimi]

As at the end many stated u need more Mu in game but not in UL items u need them in L items. For this u need a biger playerbase that actuly plays the game and spend money. to do this u need to lower the cost... atm its way to big the variance. <--- is what i think is better for the game now

i dont really care about what the report to us, they show us what they want... i see in game what is happening.

 

[AJack10600]

that was what i was saying. their business strategy of a platform is neither here nor there when it comes to how they are manage the daily operations of the game itself, and they spun out the business unit dealing with content. poor returns (or at least the perception of) and nothing interesting to loot makes for a dull game experience. which is a shame since they've invested so much time in the new engine.

I agree, maybe I was a bit unclear. What I meant was that the "strategy" of going for multiple partners has just let to neglecting the core game and player experience. Too many resources go into trying to service too many concepts. That is a waste of time and resource...

 

[Wildman Alpha]

It cost MA nothing to drop a 300ped (L) gun. The recipient profits 300+ MU if their is one. Someone had to pay that 300+ MU if lucky earned it if not he depos brings $30+ to the game economy. in a few days his $30 is gone plus the ammo he depoed to use in it and if he amped/sighted/scoped the weapon additional decay cost all profit to MA and well tripled the original $30 MA put in the TT of the gun.

At a $30+ profit for the person who looted the gun he will more than likely recycle the ped into ammo for his next hunt.

UL Gun it COST MA to drop them because it DOES add to the actual tangible economy of the game in other words someone owns the TT value of that weapon. Say IFF8k TT = 500ped and MA just dropped one YA we wish. The value they drop in game will remain in game unless some idiot TTs the gun. Someone will depo 10-13k ped to buy the gun but at that amount the seller might be tempted to withdraw so the cash/ped/back to cash just happened and MA made squat immediately. Over the long run they will earn ammo burn and a little decay (mine might decay 20ped a month).

So uber items or super Eco items are bad for EU economy to continue they accomplish nothing as far as putting real cash in MAs pocket. As opposed to the (L) item that will be bought over and over frequently in small amounts adding up fast. Ammo burn/decay is almost a constant since they will be burning ammo on what ever gun they are using anyway L or UL. But by keeping micro instead of macro purchases it becomes harder for each player to amass ped to withdraw most end up playing it off in game.

Just my

 

[DoubleWolf]

Makes me wonder if MA has really taken the time to look at what brought their early success.

Everyone knows they changed the loot system in the past to the more high variance "gambling" type loot system that we have today. This also happened, as I understand it, right around the time of Neverdie's asteroid purchase which brought in what might be the largest influx of players yet.

So I look at it this way:

The players that were already in the game at the time of the change were forced to start depositing more and more money. Since they were already fully invested into this game, dumping more money in was not an issue. MA got these players hooked early on, so when they changed the loot variance, these people were already prone to start gambling on the game. Add in the new players and all the stories they've heard about how you can make money, and it keeps some of these players around for awhile, with the ones that have some early success and the gambler types sticking around longer.

Eventually everyone wises up to the fact that it's really just a flashy casino game. I don't agree completely that it is, but MOST people find it indistinguishable and public perception is really more important here. What brought the early success WAS the success stories of the players. The fact that these things can be done, and it's possible if you work at it. However, there don't seem to be many Mike Everest's and Jon Jacobs' coming out of Entropia anymore.

The shift in loot might have worked well initially as a quick cash grab, and combined with the influx of players probably convinced MA that they were doing something right. But that policy is TERRIBLE for keeping the general population attracted to the game. It doesn't work long term, and we're finally seeing the effects of it. They might like to attribute the poor results to the poor world economy, but people out there still have money. Plenty of people still have disposable income. The economy might be PARTLY to blame, but I think the finger should really be pointed squarely at MA.

I think it's about time to rework the loot system to something along the lines of the past, to keep players around, attract new ones, and build this economy, instead of shrinking it like we are seeing right now.