Wilhelm Arcturus, he’s played internet spaceship related games since the early days of MegaWars III, and expects to get the hang of things any day now. He reports on EVE from an individual capsuleer’s point of view at TAGN.
TAGN: CCP Raises 20 Million in New Funding, Talks IPO Again
With Star Wars: The Old Republic pretty much failing to meet expectations all around, there has been a lot of talk about the death of many things: Monthly subscription MMOs, big budget MMOs, and well… MMOs in general.
Aside from a burst of asylum level crazy talk about SWTOR somehow claiming as many as 10 million monthly users once it goes free… which I am going to guess is what they will need to make it profitable in that mode… to whatever, the news seems to be grim.
Then there is CCP, which seems to be bucking the trend… as usual.
It still has a the subscription model going. And while it has eyed the cash shop idea longingly at times, it really hasn’t gone very far in that direction, barring some useless cosmetic items.
And they continue to buck the trend by getting $20 million in new funding in these dark days, according to Tech Crunch.
Of course, this should really be news. CCP was talking about more funding and an IPO back in February when they announced that they had not only defied some dire predictions about going bankrupt, but actually made a handy profit for 2011. This despite the whole Incarna thing.
What will a publicly traded CCP mean? Is that even a good thing?
I couldn’t tell you. Then again, I live in Silicon Valley where IPO generally means “screw the company, I’m cashing out!” so I sometimes have a dim view of the whole thing despite having “cashed out” at least once myself.
But somebody out there thinks there is value to be found in MMOs.
Great example of deep analytics.
You raise a good point: IPO in the US does typically mean "See ya'! Good luck with that!" This is less true outside of the US. Look outside the US, and the goal of private equity is more often to make a cash cow that generates long-term, consistent high rates of return, rather than a short-term cash windfall from selling to outside investors.
True. You can see how the Icelandic sentiment on business by noting that someone could actually just walk into some government office and get financial statements of a *private* company, something that would never happen in the US.
"But somebody out there thinks there is value to be found in MMOs."
Who is it? Come out and show yourself!!
Don't know about other Eve players, but I would probably buy up a chunk of shares. CCP probably doesn't want my money though, as I'd end up raising "remove supers from the game" for a vote at each of the shareholder meetings.
You would buy shares, but you would not want to get yourself a cap… You are an idiot.
I have a few capitals and a super. Having them is not the same as liking them. I don't like supers. They are game breaking. I think Eve would be better without them.
so you want to take away something that players have earned from literally years of work? if you don't like yours then put your money where your mouth is and give it away. otherwise, don't make stupid remarks like that please.
Anyone thinking their "work" in a leisure activity has "earned" them something needs to find a healthier source of self-worth.
I would self destruct mine in a heartbeat if it would have any impact on CCP.
You say you own a cap, but you do not want them? You are an idiot.
You can imagine buying shares and influencing CCP to remove caps, but you cannot imagine CCP changing them to your needs? You are an idiot.
There are several players with 100m SP and more, who cannot fly caps, because they never wanted to and they are all happy. You cannot do the same and caps make you sad? You are an idiot.
What did you whine about before it had caps? Battleships?!? You are an idiot.
Go and self-destruct your cap, then biomass your character and kill yourself in a fire.
+1
-1
You could sell it or ask if ccp will reprocess it for you? There .. no ship in the game plus u get something back?
I think EVE would be better with alliance caps at 300 members and a very limited blue list but we all have crazy ideas from time to time…
Yep. We all have crazy ideas. An IPO means shareholders would have influence on the game. Shareholders get really crazy ideas too. Like how to turn a quick quarterly profit at the expensive of the future of a company.
The point I'm trying to make is CCP really DOESN'T want to have an IPO. CSM is probably the closest they want to get to outside influences on how their business is run.
EVE would be better without TEST, learn how to kill MOMS or GTFO back to STO
I bet you`re some TEST dude or GAMER GURL and better hope I don`t find out who you are and scag the shit out of you. Faggot.
Yea an IPO for Eve would be literally the death of Eve. People that don't play Eve don't get Eve and alot of the really big money wouldn't be Eve players most likely. An IPO would mean big outside money that has literally no fucking clue that Eve is Real would have more impact then those of us that play. Eve is unique . . . it's the only true PvP player driven game out there. A short term, profit first company would kill that and leave Eve where every other "Eve Killer" is right now . . . in a pile of burning shit.
This is just patently wrong. And IPO would mean that investment houses come into the company. And in fact they would have the same level of influence as the current investors. But it is more likely that they will have less influence as IPO's are usually split by several sponsor banks which host the IPO. Also it should be known that the conventional debt owed to banks is what causes the great layoff of last year. The CCP note holders came in and said "you need to cut costs" and that is what they did to continue their line of credit.
The only danger is that one investment house comes in and get enough shares to start to propose stupid stuff like "lets be Guild Wars 2 because guild wars is hot" or "lets be Black ops because black ops is cool". But the risk of this is low because if CCP is smart it will reserve shares to keep some controlership and also ensure that the shares marked for IPO are distributed so no investor has the ability to control the company. See the IPO and acquisition of Veridian back in the 2000s
Haha your use of the phrase "patently wrong" reminded me of a crowd I had to deal with that also used phrases like "egregeious", "guaranteed upside" and "aggressive valuations"
Anyhow, I think the danger is more from the fact that the investors that come in through the IPO would be more interested in seeing a black bottom line, making Eve more risk averse than it is now. One could argue that that could have prevented stupidity like Incarna, but one could also argue it would have prevented DUST from happening cause …
Two mitigating factors:
- This is Iceland and not the US. The underlying drivers of shareholder activity may be different there.
- They can always pull a Facebook and have two classes of shares, one with voting rights and one without, if the laws allow it.
Provided you disclose in your prospectus/information memorandum/whatever, what we call "the law" allow anything. Anything.
Its as bad as freeform contracts in Jita – you can *literally* say 'Once you give me this money, Im going to steal it' in the fine print.
Google 'Boxer vs Husky self dealing prospectus' if you dont believe me.
"If the asserted self-dealing was actually authorized or contemplated, it would not, ipso facto, be impermissible." Yeah baby !
Actually there are two kinds of shares now, common and secured. Common is well common stock. Preferred is stock which is more protected than common and is issued to investors in the Series A B C. For more on these deals there is a book called "venture deals"
As to 'underlying driver' the investors exiting are going to be guys from London and New England. Not to mention the IPO shares are internationally traded.
Don't focus on the IPO being about EVE online only. Look at EVE online as the collateral to secure the money, and that money going towards developing other endeavors.
EVE has been around a long time and hasn't reached the mainstream success as the other giants (I'm not saying EVE is unsuccessful), it would probably allow them to grow to a next gen company and develop other opportunities that they have up their sleeve.
Very true. And in an environment where interest rate on debt is so so low, it doesn't make sense to dilute equity holders unless you really have to.
shareholders are not management and management is not game design, period.
you can read through transcripts of the Blizzard Activision investor calls to judge the level of detail shareholders of game companies have to concern themselves with.
Shareholders care about cash. Let's look at Facebook as an example. $35 opening share price. Now worth under $20. So how will Facebook raise the share price, by introducing "pay to win" items. Profit = higher share price and happy investors. CCP + IPO X shareholders (happy / unhappy) = pay to win items. And you will have people who will pay real money for exclusive items etc. money makes the world go around!
In 49 system 1300 enemies was game breaking aka CCP lag. Caps don't break eve lag does.wish. CCP would sell out to someone who cared about fixing issues. New inventory windows. Mouse over mods are fail but makes us pissed. Then they fix. But real life issues they can't fix and they careless.
Totally agree here. Supers just aren't needed. Titans I can understand but still think there should only be one allowed in system at once.
Isn't the point of an IPO to raise money? If you already raised $20m, why would you do an IPO?
Not all IPOs raise money for the institution. For example, it could just be existing shareholders selling their shares to the public and cashing out.
Usually it's a mixture of the two though, where new shares are issued, AND current shareholders cash out.
IPO means bye bye spaceships welcome hello kitty in space. This will be the decline of eve as we know it.
Invlunerability in high-sec for TardBears, not losing ships in pvp and bannable griefing. R.I.P. EVE.
P.S. I am 'Teh Gaunt' from Outbreak and I love cock. Convo me if you want me to suck your nuts.
Is this a total IPO to sell all the shares off? If so the IPO is just an exit strategy for private owners (Hilmar & Co).
Hilmar owned less than 3% of CCP, even if you add up all CCP employees and curent/former board members you arrive at less than a quarter of total shares.
Novator/NP (which has a complicated history and is probably controlled by banks now) and General Catalyst Partners (US VC firm) are the big players.
SO HOW MUCH PLEX WILL ONE CCP SHARE COST?
Im just going to throw this out there but did anyone think that this might be for the PS3 game Dust ?
I dont like the hate in this conversation on the topic of "the american IPO". The reason people IPO is to get cash, remember they have been doing Investor cash injections in the form of Series A Series B Series C rounds. All of these Investros want their money back, which is what is the ethical responsibility of the company. Baring a wildly successful cash generating company that buys back its ownership, IPO is the exit strategy of investors to get their money back. The 'hate' you people are writing about is totally unjustified because if you had given them millions you would want your millions back. The fact they made money is because they took a tremendous risk. Look at THQ which is on deaths doorstep and investors are going to walk out with almost nothing. If CCP IPO's they turn ownership into cash they were promised in the financing proceedings.
As much as you think Silicon valley is a turn and burn opperation, consider this, in silicon valley companies grow from millions to billions in the course of a few years. They can grow with conventional debt but they also burdens the company with debt payment AND they become more and more levered as they grow. The Series A B C of investors can help but the real need for cash to grow from millions to billions is only really available from the open market. The IPO is the cash they need to survive.
And to those of you who will use Facebook as an example. It was massively over priced and was only trading at $20 on the bulletin boards. The SEC was also getting a little uppity about facebook stocks trading in the public on the secondary market without an real IPO. The feds basically forced facebook to IPO.
I think a lot of the hate comes from the fact that main street investors usually end up being the last idiot standing, with institutional investors cashing out at their expense.
I love how this is now the regulators' fault. Did the 'feds' force a price on FB too? No. The investment banks did, who at the same time were grumbling that $38+ was 'too high'.
Actually they do not end up holding the bag. The ones who statistically hold the bag are institutional investors such as pension funds. Case in point CALPERS which is the California public sector pension fund at $170 Billion. They hold such large positions in companies that they cant draw down even if they wanted to because the just own so much they cant sell it off fast enough. And to back that up, pension funds, mutual funds and other investing entities statistically do worse than the index funds (SPX or Standard and Poors 500)
"For the period of December 31, 1992 to December 31, 2007, only 41.6% of actively-managed U.S. large company funds that beat the S&P 500 in a particular year were able to beat the S&P 500 in the next year. After three years, only 9.7% of the original group was still beating the index. " http://mutualfunds.about.com/od/activevspassivefu…
the only way pension funds protect themselves is by buying treasury bonds. (yay 1.5% interest rates)
Interesting to note that they have raised the funding as convertible bonds and not by selling equity stakes.
This means they've actually taken on debt for the moment that will become equity (shares) at some predetermined strike price based on some contingent event (like a buyout or an IPO or cause the bondholders want to).
But yes, for now this means this is debt sitting on their books rather than coupon-less equity. CCP better deliver.
to chime in. I also lived in Silicon Valley and have the same dim view of IPOs, but ive since moved to Europe, and frankly, they just dont do business like wall street does here. in this backwards society, they actually dont celebrate those that screw everyone to win.
I think CCP are/were in a worse financial situation than they had let anyone know, & I think they were & probably still are hoping that DUST514 lifts them out of the hole they have started digging for themselves.
CCP being publicly listed will have it's good & bad sides, & unfortunately it will mean the moment EVE starts loosing $$$$ it will be either down sized, closed or sold off because share holders are often not interested in whether a player base has a lot of very motivated people in it. No they are only interested in the bottom line & with the current state of financial markets around the world share holders are even less likely to want to take that extra risk.
I think that we will see the development of EVE & DUST514 sold in the future to another developer. Even as much as I would hate to see it. What that will end up meaning for the player base I am unsure as it could end up being a good thing if the developer is willing to listen & isn't as top heavy as CCP seems to have become in the administration & development of their products.
We shall see one way or another, sooner or later so I guess it's time to grab some popcorn to prepare for the show! :'(
Wow, you live in Silicon Valley, what – you work at a drive thru there or what? Jesus, find a staff member who has an ounce of business accumen to write an article, don't let the first guy to link it to you write it… sheesh…
CCP is a business, yes you want happy players, but without happy investors, there is nothing for the players ot log into. I mean get someone to atleast take your story down a couple business scenarios, instead you just link a story and leave…really?
They are getting ready to sell to Sony.
Any Bets??
FUCK YOU CCP !!!
ccp probaly needs the 20million to start plowing on with world of darkness or maybe to boost the marketing for dust? What i wonder is, why do they need this small investment when surely they should have a healthy bank balance by now.