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Atari shedding Cryptic StudiosFollow

#1 May 17 2011 at 9:17 PM Rating: Excellent
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So much for F2P being the glorious end all to a failing game's woes. Atari released its financials for Q1 and reported...
Atari wrote:
On a standalone basis and after intercompany eliminations, Cryptic accounted for revenue during the second semester of approximately €7.2 million and on a full year basis of approximately €15.9 million as of Fiscal Year 2010/2011 – as compared to approximately €4.5 million and €4.5 million on the second half and a full basis for Fiscal Year 2009/ 2010, respectively. The net results of Cryptic was a loss of approximately -€3.3 million for the second semester and on a full year basis of approximately -€5.3 million as of Fiscal Year 2010/2011, as compared to a profit of approximately +€0.2 million and a loss of -€12.6 million on a semester 2 and a full basis for Fiscal Year 2009/ 2010, respectively.


Atari says it will continue to support Champions Online and Star Trek Online until it can sell off Cryptic studios.
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Wow. Regular ol' Joph fan club in here.
#2 May 18 2011 at 7:13 AM Rating: Good
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Isn't that what you should expect from a company that's only making MMOs?

I mean, even imagining they were giving players high-quality games (which I personally don't feel they were, particularly with STO), they are still in a market that's substantially smaller than other gaming markets and is dominated by a few major titles (WoW being the most obvious).
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#3 May 18 2011 at 7:35 AM Rating: Excellent
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I think you should expect smaller profits than you might get from other titles. I don't think you want to take a $7.5 million dollar loss for the year.
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Belkira wrote:
Wow. Regular ol' Joph fan club in here.
#4 May 18 2011 at 8:44 AM Rating: Good
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Well, yeah. What I meant is that it was super unwise to have a studio ONLY putting out MMOs. At least with the market like it is now--there are too many big companies to contend with, and too many free-to-play MMOs to allow a new game to break into the market.
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IDrownFish wrote:
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lolgaxe wrote:
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#5 May 18 2011 at 12:01 PM Rating: Decent
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If it's a problem having a studio make only MMOs, then why would you make MMOs at all? That would imply they're all unprofitable, so even in a diverse studio, why even make them? At least if they're all that your studio do, you have a team with a lot of experience in one thing working on it.
#6 May 18 2011 at 2:25 PM Rating: Good
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It's not that they can't turn a profit, it's that they are a risky proposition. Unless you know you have the resources to invest in them, it's going to be difficult to turn a profit. A studio without any other income is already in a worst spot when it comes to investments.

Since you are looking at a smaller profit margin from them, as Joph suggested, it's unwise to focus solely on them (imo).
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Anyways, you all are horrible, @#%^ed up people

lolgaxe wrote:
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#7 May 18 2011 at 4:29 PM Rating: Decent
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Having the resources to invest would be where Atari comes in. It's not like this studio is completely supporting itself and then Atari just takes a cut because it feels like it. Maybe these games weren't sufficiently well-funded, but it's not because the studio only worked on MMOs.
#8 May 18 2011 at 5:29 PM Rating: Good
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My point is that MMOs begin as a low-profit proposition. You're already running a risky proposal with them, because your potential profits are pretty low to begin with.

If all you are focusing on is MMOs, you've pretty much shot yourself in the foot. Is it guaranteed that you'd lose money? No, of course not. But you are looking at smaller profit margins with higher risk for the studio as a whole.

Now Atari wants to sell the studio--the problem with that is that they are still only making MMOs and have lost money in the past. Why would you want to buy them? The studio has only specialized in one thing, which they didn't even do well enough tot turn a profit.

If they had invested money into the safer, console-based gaming market as well, they would have a more attractive product to sell to other buyers, even with the net money loss. And they might have managed to make enough of a profit to stay an Atari studio (granted, probably having to sell the rights to their MMOs elsewhere).
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IDrownFish wrote:
Anyways, you all are horrible, @#%^ed up people

lolgaxe wrote:
Never underestimate the healing power of a massive dong.
#9 May 19 2011 at 10:35 PM Rating: Decent
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idiggory wrote:
My point is that MMOs begin as a low-profit proposition. You're already running a risky proposal with them, because your potential profits are pretty low to begin with.

No... quite the contrary. MMOs tend to have some of the highest profit potential, but they are incredibly risky and demand some of the highest investment costs of any genre in the game industry.
#10 May 20 2011 at 6:21 AM Rating: Good
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No... quite the contrary. MMOs tend to have some of the highest profit potential, but they are incredibly risky and demand some of the highest investment costs of any genre in the game industry.


The highest possible profits are extremely high, sure. But the investment cost and probability of your MMO actually becoming popular are low enough that the potential profits you'd consider in a business plan are also low.

Sure, you might end up with 25 million subscribers. You might also end up having to make it F2P just to break even.
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IDrownFish wrote:
Anyways, you all are horrible, @#%^ed up people

lolgaxe wrote:
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