Comments

OK, CCP tossed a dung-bomb out there and I need to address it.

CCP’s consolidated financial statement for 2013 is now very public. Here’s the discussion thread at FHC. Look at it for more than about a minute and you’re going to quickly discover that CCP lost about 21 million USD in 2013. This is very unusual for CCP, which has generally been a profitable company. What happened that caused them to take such a massive loss?

Look a little deeper and you’ll find that the primary hit is on the assets side of the balance sheet, specifically in research and development, which took a massive hit between 2012 and 2013. You’ll find that on page 5. Without that, CCP had a great year, bringing in about 10 million USD more revenue in 2013 compared to 2012. So what happened in R&D that caused a potential profit to turn into a massive loss?

Investigating that sends you to page 6, where you discover that retained earnings and development cost both took massive hits and that’s the source of the loss. That sends you to notes 12 and 16, on pages 22 and 26, respectively.

On page 22, you’ll find CCP taking a 21.4 million USD “derecognition” hit. The note for that says the following:

During the year the company assessed its capitalized development assets and determined that a portion of those assets would likely not have future economic benefits. IAS 38 requires that such assets should be derecognized and removed from the balance sheet. The expense related to the derecognized assets are presented as part of research and development expense in the statement of comprehensive income.

Translated into English: “We’ve decided that some of the code that we capitalized development costs for is no longer likely to be a future income source.” As code goes from “something that a programmer is working on” to “something that’s going to generate revenue for our business”, you capitalize it, i.e. turn it into a capital asset that’s going to generate revenue in future balance sheets. CCP is saying that the opposite is happening for some of their code.

Therefore, that same 21.4 million USD then disappears as an equity asset on page 26. This essentially “writes these costs off the books” and indicates that CCP no longer regards this code as a capitalized asset.

Do I know what’s going on? Yes. Can I talk about it? No, the NDA prevents it. Do I think CCP was dumb dumb dumb to release their financials before making the appropriate announcements? YES. But I still can’t talk about it.

However… search my blog for the word “capitalized” and you’ll find this post. I will say nothing more, except that CCP’s financial position is a lot more solid in 2014 than it was in 2011 when I wrote that.

Let’s hope that CCP makes an actual announcement of their plans, and soon, shall we? Cripes.

– Ripard Teg

108 Comments

  1. Nobody

    Huh..?

    March 18, 2014 at 15:02 Reply
    1. ?

      yeah pretty much

      March 18, 2014 at 21:55 Reply
  2. Parr for the course

    DUST has failed…this is a public admission of sorts…all that’s left now is to shutdown dust. This could be bad for EVe

    March 18, 2014 at 15:12 Reply
    1. Really?

      How so? FW game mechanics revert back to BD (we will call this age Before Dust), and you have some more useless stuff in the database. EvE will be fine.

      CCP will have to answer to the people who paid for stuff on Dust, Sony, and the gaming community-at-large. Financially it may be more bark than bite unless there is some kind of contract issue with Sony. CCP’s reputation depends on how CCP handles the situation.

      March 18, 2014 at 15:20 Reply
      1. Poster

        They don’t really have to answer for anything. If Dust is going then it’s just something that happens. The game and all items contained within are still CCP property and as such theirs to do with as they wish. Yes, it wouldn’t be very good for PR, but it happens. Also isn’t there the change this could be related to that Vampire game…. what was it called….?

        March 18, 2014 at 15:33 Reply
        1. Billbo

          Yea they do their called “shareholders”

          March 18, 2014 at 17:41 Reply
          1. ^^^ dosnt read

            there privately owned that means they don’t have share holders man

            March 18, 2014 at 23:22
          2. Billbo

            Just because they are privately owned doesn’t mean they don’t have internal shareholders. #Learn2Capitialism o7

            March 19, 2014 at 01:36
          3. reading can't fix stupid.

            They are privately owned by the investors who own them, sometimes people refer to investors as shareholders.

            March 19, 2014 at 02:03
      2. lol

        If you have never dealt with Sony support before allow to explain how they will “answer to people.” They will explain they don’t offer refunds for digital purchases and recommend that you contact the game developer (CCP) for a refund. People will then contact CCP support and request a refund, and given CCP’s well recorded track record in the customer support field … well you get the idea.

        TL : DR good fucking luck getting your money back because Sony doesn’t care and CCP wants to keep it.

        March 19, 2014 at 02:01 Reply
    2. HurDur for the course

      you’re retarded. They are canning WoD not DUST.

      March 18, 2014 at 15:55 Reply
      1. J.C.

        Read the financials. Note 12, Page 23. “Amortization of capitalized development cost in 2013 relates to EVE Online and DUST 514 while amortization in 2012 is almost exclusively due to EVE Online.”

        March 18, 2014 at 16:30 Reply
      2. Billbo

        FYI dude WoD was DOA after the summer of rage. It sounds like CCP burned $20mil on a platform that is currently released to the public and due to reviewing future economic figures (graph porn) the company will be losing money in future fiscal years.

        March 18, 2014 at 17:46 Reply
    3. Chris

      Who says the derecognized assets are Dust?

      March 18, 2014 at 16:07 Reply
      1. J.C.

        CCP did. Note 12, Page 23 in the financials. “Amortization of capitalized development cost in 2013 relates to EVE Online and DUST 514 while amortization in 2012 is almost exclusively due to EVE Online.”

        March 18, 2014 at 16:31 Reply
        1. Chris

          Ah, miss that line. my bad.

          March 18, 2014 at 17:03 Reply
      2. Billbo

        .I.e Shanghai office and dev team. it ain’t the Atlanta office since since they alreadt had a culling on xmas

        March 18, 2014 at 17:49 Reply
    4. Daniel Plain

      this can only be great for eve. no one cared for dust, even CCP themselves. i mean come on, they hired mintchip as CM, it does not get any more obvious…

      March 18, 2014 at 19:52 Reply
    5. lol

      How could them having more money and devs to work on the game that gave them the ability to get more devs and money be a bad thing? Who knows, maybe all those changes they have been promising for 5+ years will be feasible now that they are not trying to develop 3 games with the staff and funding of one?

      March 19, 2014 at 01:57 Reply
  3. A7

    He says one of the two things. First, most probable, that DUST is history or second, less probable, that they are rewriting EVE core/POS code 🙂

    March 18, 2014 at 15:20 Reply
    1. DaReaper

      No, Dust is releseased, it sounds more like they are killing a project, like carbon, walking in stations, etc. And less likely that they are killing a game that seems to have brought in money, as ccp’s rev went up a lot. And Dust is still in development. So.. yea, all the dust haters need to get over it and stop rooting for it to die, because it would be a huge hit for ccp if it did. If you don’t like dust then just don’t play it

      March 18, 2014 at 15:34 Reply
      1. Ashesofempires

        Carbon isn’t going away. Carbon is the foundation upon which all of CCP’s games is built upon, including EVE. It underpins the Trinity graphics engine, the server cluster, and pretty much all of the dev tools they use. See here:

        http://www.ccpgames.com/en/company/technology

        March 18, 2014 at 17:02 Reply
      2. Carlos

        DaReaper is correct. If you dont like dust, dont play it. Otherwise stop talking shit that can cause harm to ccp if dust fails. But no Carbon imo is here to stay as all their old code is now part of Carbon engine. If Carbon was going down the drain, believe me, we would hear this very fast as the game is build on it.

        March 18, 2014 at 18:20 Reply
      3. lol

        Lol root for it to die? Why would I waste time doing that? The gaming community as a whole has moved past DUST and onto Titan fall and those that didn’t get titan will be getting Destiny when that drops this summer/fall. If you don’t believe me go to a game store and ask they guy behind the counter about Dust, assuming he doesn’t just stare blankly at you and ask you what Dust is, he is going to describe it as a “shooter that part of a PC game like call of duty, but you can only play on the consoles”. I seriously not joking these were both responses I got from Gamestop staff, the first guy didn’t even know it was a game, the other thought it was a COD clone in a halo type universe.

        You act like talking bad about dust will harm it more than CCP’s inability to balance the game correctly, or the fact that they released a barely out of alpha game as a “finished beta” product. CCP has done more damage to Dust with incompetence and mis-managament than I could ever do with bad publicity.

        March 18, 2014 at 20:00 Reply
    2. Chris

      Also don’t forget they have a huge increase in RnD.

      March 18, 2014 at 16:12 Reply
  4. And that's about it

    TL;DR CCP financials misleading, CCP more stable financially in 2014 than in 2011. Can’t talk about specifics.

    March 18, 2014 at 15:26 Reply
  5. Random CFC Grunt

    Something’s for the chop. DUST or WoD in fact…

    March 18, 2014 at 15:33 Reply
    1. DaReaper

      No, according to the finances its already been chopped. As this was for fiscal year 2013, and they should already be on the next fiscal year.

      March 18, 2014 at 15:36 Reply
  6. Apolo

    This has nothing to do with EVE. This loss is consistant with an entire game as it means the loss of a large base code. Random CFC Grunt is right in that either DUST or WoD is going to be shut down permanently. My bet is WoD as they’ve already been stripping the staff.

    March 18, 2014 at 15:41 Reply
    1. DaReaper

      Except they are still hiring positions in Atlanta for WoD. So who knows.

      March 18, 2014 at 15:49 Reply
      1. Playos

        It’s possible they’re scrapping there code and planning on licensing/outsourcing the IP to another shop to actually get it written. That would fit the layoffs/hiring/write down

        March 18, 2014 at 17:35 Reply
    2. J.C.

      CCP Financials. Note 12, Page 23. “Amortization of capitalized development cost in 2013 relates to EVE Online and DUST 514 while amortization in 2012 is almost exclusively due to EVE Online.”

      March 18, 2014 at 16:35 Reply
    3. lol

      Well they did just clean house on one of their dev studios and Dust is still getting patches so smart money is on WOD which we haven’t heard from in over 3 years at this point.

      March 18, 2014 at 17:44 Reply
  7. Herp Derp The Great

    They are going to tank the TIDI code as it clearly doesn’t do enough to solve the staggering lag issue and thus making nullsex sov stuff a matter of who gets the most peeps in a system first vs. what it should be with that being a monumental struggle with sides bringing whatever they feel they can or should given what’s at stake with a given battle.

    March 18, 2014 at 16:32 Reply
    1. J.C.

      … Can’t tell if trolling or just stupid.

      March 18, 2014 at 16:33 Reply
      1. Chris

        Stupid, always assume stupid.

        March 18, 2014 at 17:03 Reply
  8. Ciaphas Cyne

    walking the edge here in terms of nda

    March 18, 2014 at 17:05 Reply
    1. Roy Smokesalot

      They can’t sue people when the only asset they have is a 97 Corolla and cheetos.

      March 18, 2014 at 17:42 Reply
      1. lol

        They sold the Corolla to buy the cheetos.

        March 18, 2014 at 17:43 Reply
  9. Noob

    I am not the super-financial expert. But lets toss into the discussion they actually plan on making EVE Free to play? Then the Source code itself would no longer generate revenue, right? Meaning it would have to get out as an asset?

    March 18, 2014 at 17:25 Reply
    1. Lithalnas

      Not the way it works, Free to Play does not mean it does not generate revenue. See League of Legends. They would not write this down as a derecognized asset. They would just recognize the income differently.

      March 18, 2014 at 17:29 Reply
      1. Noob

        Ah, ok. Then forget my comment XD

        So we down to Dust, Incarna Engine or WoD again … :/ Darn, me curious now, and knowing CCP they wait till FF again -.-

        March 18, 2014 at 17:30 Reply
        1. DaReaper

          Problem is, depending on what it is, ccp doesn’t have to tell us anything. Unless they make a huge announcement like ‘Dust was going to be ported to pc, but was not gonna work so we canned that’ or ‘we are closing down dust/WoD devlopment’ or “We were gonna do xxx changes but scrapped it” or “we were gonna make game x based on eve but scrapped it” then we will never really know, and most likely its of no concern for us anyway.

          March 18, 2014 at 18:21 Reply
    2. DaReaper

      And why would eve go free to play? They are making stable cash off the subs. Going F2P only works if you can’t get the subs you need to remain afloat. As you could in theory lose more money then you gain if you go f2p as opposed to subscriptions. Eve and dust have 500k or so players, so lets be generous and say 490k of that is all eve (tq and china) if they are paying $15 a month that’s 7.5m a month or 88m a year. So if you go free to play, you need to hope that those players still pay $15 a month to keep the same amount of money coming in. Which it wouldn’t. It could make more granted, but odds are it won’t. Eve becoming F2p makes zero logical sense. If eve had 50k subs then I could see it.

      March 18, 2014 at 20:02 Reply
  10. Lithalnas

    My theory: Dust get reworked so it can run on PS4 with better graphics. In doing so the codebase is different and therefore must be retired. We may not see what they are spending in the China office on Dust development but we do see 40m in R&D cost over and above last year. I also think they are way over valuing that codebase for the tax advantage of loosing money. (9m in taxes is for last year)

    March 18, 2014 at 17:48 Reply
    1. lol

      You don’t write a game off as a 20 million dollar loss if all you are doing is porting it to the new console.

      March 19, 2014 at 01:53 Reply
      1. Andrew Metzger

        The code likely can’t be ported, and has to be trashed or rewritten.

        March 19, 2014 at 14:57 Reply
  11. Muul Udonii

    Baby game officially aborted.

    Didn’t want those vampires anyway.

    March 18, 2014 at 18:01 Reply
    1. Daniel Plain

      20m seem way too high for WoD, my guess is they are killing dust. good riddance.

      March 18, 2014 at 19:45 Reply
      1. Cloora

        How many times must it be explained to you that DUST is making income. Is it profitable? i don’t know. But it IS income. What they wrote off cannot be capitalized upon so it is dead code. More likely WoD.

        March 18, 2014 at 22:12 Reply
        1. lol

          Having people spend Aurum in a game is not income, its game function. The income was generated when the PLEX was sold by the retailer and the revenue sent to CCP, now stop repeating the same garbage post the whole way down the thread.

          March 19, 2014 at 01:52 Reply
          1. Cloora

            No dumb ass, you buy Aurum on the PSN. It isnt the same Aurum as EVE Aurum and is not transferable

            March 19, 2014 at 02:17
        2. Daniel Plain

          once.

          March 19, 2014 at 13:01 Reply
        3. Andrew Metzger

          Income /= profit
          Ripard is also hinting with his linked article that this is DUST.

          March 19, 2014 at 14:53 Reply
          1. Cloora

            I recognize that and said that. But to be “dead” code it has to be generating no income. Not profit.

            March 19, 2014 at 15:20
          2. Andrew Metzger

            hm, you learn something new every day.

            March 19, 2014 at 15:22
  12. Carlos

    The amount of players in eve seem stable so it cant be eve. All this losses are dust + PS3 + wod probably and dust probably makes almost the whole bulk of the loss cos of all the investment.

    March 18, 2014 at 18:14 Reply
    1. Jevous Encule

      Compared to the same date last year, the weekly average of connected accounts in Eve is around 2000 lower. So I would not say Eve’s player base is stable. It is declining.

      March 18, 2014 at 18:40 Reply
      1. Carlos

        43k-45k is the average more or less for eve. Ofcource with a new patch always there is an increase in logins. So no panic.

        March 18, 2014 at 19:43 Reply
  13. Draught

    would correlate with the Atlanta office, layoffs and WoD “re-evaluation”

    March 18, 2014 at 18:36 Reply
  14. shadowtycho

    I might be speaking outside my area of expertise since i don’t keep up on international accounting as much as i used to, but wouldn’t this be the fallout for the 2013 international accounting standard changes to research and development recognition?

    March 18, 2014 at 18:44 Reply
  15. groan.

    This article is a bit of a cocktease.

    March 18, 2014 at 19:28 Reply
  16. Mohammad Ali

    I didn’t understand shit
    but from what I see and know eve is the most successful game ever …

    March 18, 2014 at 19:31 Reply
  17. Sold

    Ruh-roh. CCP capitalizes a bunch of code they developed. Couple years later, they write off a bunch of code they capitalized.

    More proof that CCP really doesn’t understand balanced gaming. Perhaps they should hire Richard Garfield, or anyone else that actually understands games theory.

    Now here is the tinfoil: Russia takes over Crimea. In protest (publicly or privately), CCP divests themselves of all monies they got from nasty Russian-owned telecom. What was that loan? 20M USD for DUST R&D? /tinfoil

    March 18, 2014 at 19:43 Reply
  18. Ish'na (not another) Dallocort

    Way to drop the speculation bomb Teg.

    March 18, 2014 at 20:50 Reply
  19. dj

    I’ll throw out my analysis (as a chartered accountant).

    CCP burnt £6m of cash in 2013 and £9m in 2014. They are in an investment phase which is consistent with what we know given the other games being developed and the lack of success of Dust.

    They can’t keep burning cash forever. On current course in 2 years they will deplete the current £14m of cash balance and run out of money.

    Interesting that they have a bank loan. This appears to be how they have continued funding the expansion into games other than Eve.

    It also means the continuation of the company as a going concern is dependent on continued support of the bank. Unless revenues massively pick up (e.g. DUST or another game becomes as success) they won’t be able to repay the bank loan in 16/17.

    At that point unless the bank (or another bank) agreed to extend the facilities the company would be bankrupt.

    The bank lending would have come with covenants – minimum financial performance. If they break the covenants the bank could pull support at that point. Given things aren’t going great they might already have breaches their covenants.

    If they stop burning cash now, pulling back on development costs and killing the non profit making games, they have enough cash in the bank at the moment to repay the loan. They company would be in an OK financial position. This would be the risk adverse / low risk approach.

    Alternatively they go high risk – they keep throwing development resources at the new games in the hope they start making money in the next 2 years before the cash runs out. If they don’t the company would likely go into administration – the shareholders/investors would leave with nothing and the bank would take over ownership.

    It seems like a big year for CCP. Big question as to whether they keep investing or pull back on new titles. If they already breached their covenants then the bank will likely already have a say in that strategic decision (and would unlikely to want to take the risky route).

    All in all it would seem to me that Dust will be pulled this year unless is suddenly undergoes a massive change in fortunes.

    March 18, 2014 at 20:56 Reply
    1. Quakker

      My understandings of finance are limited to “If the kids are eating, we’re fine”. This made total sense to me though.

      March 18, 2014 at 21:17 Reply
    2. lol

      Thank you for knowing how to spell, having a great understanding of corporate accounting, and not being an idiot when you posted. On a side note I have to agree on the Dust cut, its the only thing that makes sense given the details on the report released.

      March 19, 2014 at 01:50 Reply
    3. larry

      What do you see with all the retained profits CCP currently has. Couldn’t they use those to help pay off the loans that are due in 16/17.

      March 19, 2014 at 19:29 Reply
      1. dj

        In a simple company the retained earnings would be a good gauge of the cash generated and then retained in the company (as opposed to taken out as dividends). In this case it’s a paper accounting number as £67m of costs incurred have been capitalised to allow the £17m of retained earnings to be booked.

        It much easier to understand this company from it’s cashflow than the P&L and Balance sheet because of the capitalisation of development costs which is totally subjective.

        March 19, 2014 at 22:27 Reply
        1. larry

          Thanks for answering, and since I have a good expert here, mind if I ask a few more questions?
          First I have learned that if you don’t pay dividends the stock pretty much turns into a growth stock, where profits are reinvested into the company. But CCP put out a corporate bond to fund DUST launch instead of profits it seems. (But CCP also included a derivative into it where they could convert those bonds into company stock at a buy price of 32 or something, I imagine if DUST was successful they would do that.) So it kind of makes sense they didn’t use profits.
          Also I have been spying on the games CCP wants to release and it seems they still want to support DUST, but didn’t say how strong, as well as they want to release Valkrye and still attempt WoD. It seems you gave a good risk avoidance strategy, but it kind of seems CCP doesn’t want to avoid risk. That is why I asked about profit being used. There was a condition on the bonds or loans, that they had to keep a good ratio going, I forgot what it was called, and don’t have much knowledge of that ratio as well.
          But it CCP does take the risk strategy, you got any good tips for it by chance, or a good stratedgy?

          March 20, 2014 at 12:38 Reply
    4. tell Billbo it aint DUST

      It will be World of Darkness that CCP writes off.

      March 19, 2014 at 19:46 Reply
  20. Louis Robichaud

    Why would Jester say that CCP needs to make an announcement if it was just to cancel WoD? The most logical conclusion is that some old, disliked or clunky yet important part of Eve ‘s code is being replaced. So perhaps this is good news.

    March 18, 2014 at 21:52 Reply
    1. Internet Lawyer

      Wow, so many people cannot read !

      Its dead simple….

      What Ripard can’t tell today you is something that was already public
      knowledge in 2011. The source code for DUST 514 was valued as a capital
      asset in 2011. That makes the company appear more valuable because it
      built and owns an asset that generates income. Its like you building and owning a
      house that you rent out.

      Now CCP have thrown away a capital asset because its not generating any money. Take a wild guess what they just threw away. Its like your rental house just burnt down – No more rent. And a pile of Ashes 514

      March 18, 2014 at 23:01 Reply
  21. Haha

    Looks like DUST finally killed CCP. Hahaha, couldn’t have happened to a nicer bunch of nigger faggots. Maybe next time prioritize multi-threading EVE instead of shoveling resources into the gaping money dumpster FPS.

    March 18, 2014 at 21:58 Reply
    1. Cloora

      You idiot, DUST is an income source from Aurum. Whatever code they wrote off cannot be capitalized on.

      March 18, 2014 at 22:10 Reply
      1. lol

        Actually Aurum has nothing to do with the income from DUST, you’re thinking of Plex sales. Aurum is just a number representing a currency you received for buying a product, in this case a Plex. Aurum numbers in DUST simply let you know how much of the Plex money that was spent in total was used in DUST but at the end of the day, they made money selling the plex, not selling you the tiny in-game item you bought with Aurum.

        March 19, 2014 at 01:46 Reply
        1. Cloora

          Actually, you are stupid. Aurum in DUST is purchased from the PSN store and NOT PLEX. It is different form EVE Aurum and not transferable.

          March 19, 2014 at 14:39 Reply
          1. Andrew Metzger

            Well he can’t be that stupid, he clearly isn’t playing DUST.

            March 19, 2014 at 14:47
          2. Cloora

            Touche

            March 19, 2014 at 15:19
    2. Justin May

      Dumbass troll.

      March 18, 2014 at 22:21 Reply
  22. Dirk MacGirk

    So what? Companies write off non-producing assets all the time. Anyone who reads the bottom line and thinks they can determine whether a company is doing well or not, is a moron. CCP is quite healthy financially. Eve is a cash cow that spins off cash and help fund their other endeavours.

    But the bigger question is this:

    What the fuck is the point of this article? To tell us all you know something we don’t know, but because of the NDA you can’t tell us? Is there something in your article that we the players should give a shit about regarding CCP’s financials? As for CCP’s plans, does CCP’s financials have anything to do with whether or not they should announce their plans to the players or its CSM members? No. Unless their plans are to turn off the lights on Eve, or they are at risk of turning off the lights (or dimming them) because of financial issues, I don’t see what your point was here. Maybe you just felt you needed to write something.

    March 19, 2014 at 00:08 Reply
    1. dirk + math = lol

      ” CCP is quite healthy financially.” riiiiiiiiiight because financially healthy, well run companies take 20 million dollar shots to the junk all the time that are followed up by stating a loss in “retained revenue” section of the same report all to top off a year that was supposed to be a 10 million dollar gain.

      March 19, 2014 at 01:42 Reply
      1. Dirk MacGirk

        paper write-offs of assets are not a shot to the junk. you spend 21 million over (how long?) and then years later write it off. It’s an accounting transfer; not an indication of an expense incurred in the current year against current income. not all losses are created equal. but again, what was the point of the piece? That CCP has financial issues? No, they obviously don’t. So what was it? What was the point of the article from an NDA-constrained CSM member? Nothing but air about nothing.

        March 19, 2014 at 07:28 Reply
      2. The problem with most people who are not educated with how this type of thing happens doesn’t take into account investment over time.

        Dirk has explained it many times. Not sure if he’s dumbing it down enough.

        Let’s take the WIS carbon technology as an example here. CCP has been investing in this for a long time. They have invested in the R&D and pushed x amount of money into fine tuning it. The money they have invested into the Carbon engine has been applied to each years end of year statements as R&D cost. It has accumulated over the years.

        If they scrapped the Carbon Engine, the R&D Investment numbers would be written off. In this case, 20million dollars or so.

        In a sense, you are correct, they are out of that money. But that was an accumulation of investment over x amount of time compared to a “shot in the junk” for the year 2013. The profit margin far exceeds the investment so CCP isn’t “losing” anything at this point. They’ve already made that R&D money back.

        In other words, they are better off in 2013 than they were 3 years ago.

        If you can’t understand it this way, I will petition Riverini to give you a pop up book.

        March 19, 2014 at 19:22 Reply
        1. larry

          If you read the paper though, the loss goes into their retained profits. CCP had over 30 million in retained profits before that loss hit now they have a lot less retained profits.
          Also they still have loans to pay off, and with DUST not being such a great success could be harder to pay them off.

          March 19, 2014 at 22:44 Reply
    2. derp

      For someone writing with such spergy righteousness you seem to have a hard time comprehending the crux of the situation. CCP is losing money, revenue is increasing but profit is not rising fast enough to close a gap. They are writing off a proportionally large flim-flam loss that would probably not pass muster in an audit of a healthy company, but are probably given a mercy pass in light of them trying to improve their fortunes. I GUARANTEE you that this is the last time they’ll get to do this, another year of losses with writing off legacy code that isn’t producing capital and they’ll start getting audited up the ass, assuming they haven’t declared BR by then and/or been gutted by their creditors.

      March 19, 2014 at 05:20 Reply
      1. Dirk MacGirk

        You GUARANTEE that, do you? Will you double my isk too? Flim-flam loss? Good thing you know what you’re talking about because we wouldn’t want anyone educated about accounting standards to be talking about, uhm, accounting. When you’ve read the financials, please come back, and then feel free to use your in-game name. Because while I’m pretty certain your understnanding or personal and/or corporate fincancials is “derp”, I think your name may be something else, and I’d really like to address your financial ignorance by its in-game name

        March 19, 2014 at 07:35 Reply
        1. abc123

          HHAHAHAHAAHHA – WHAT A LOOOSSSERRRR!!
          .
          You are so busy flaming everyone. If you are so informed about accounting and finance then why are you sperging in here like moron you are. Cause if you are that savy at accounting then why are not in the real world making money instead of sperging in here. Please keep your dick skinners away from the keyboard Dick MacLickmyballs.

          March 19, 2014 at 13:25 Reply
          1. Dirk MacGirk

            Can’t I do both? Can’t I sit at home, analyzing companies and trading my own account while also sperging about nonsensical stories and bad analysis of CCP’s financials? But come on bro, why not post with your game name? Have just a bit of balls

            March 20, 2014 at 00:43
        2. Apolo Askiras

          Dirk is in fact correct. The company is not losing money by any means. They are making a very nice profit off of the last year in fact. They are simply telling the Icelandic government that this piece of profit is lost money as it will not be monitized in the coming year. However, this will be included as tax breaks as the cost of this code has already been payed year after year through the R and D fund. It simply is no longer PROJECTED to make them money. It was never making them money in the first place and they already paid the creation costs long ago.

          March 19, 2014 at 18:28 Reply
    3. Noisrevbus

      Since that he refers to the NDA it’s likely that this means either Dust or WoD has been put into stasis. Considering that WoD was originally slated for a 2014 release and we hear so little about it, I guess that suggests the latter. It’s been skeleton-crewed for far too long now. Looking at past behaviour it’s also more likely that they have decided to hug their console-only, fickle-playerbase product Dust to death instead of continued development of an IP that already have a fanbase.

      If EVE’s economy ever was a precursor… ;).

      March 19, 2014 at 16:37 Reply
  23. abc123

    Another shell game!!!!
    .
    Who put the value on said code? CCP right. Not an outside entity.
    .
    So CCP tells the world that said “OLD CODE” is worth 21 million dollars ( Work put in to make it plus possible income that could have come from it).
    .
    Remember “POSSIBLE INCOME – NOT ACTUAL INCOME.”
    .
    So now this magic number –>>> 21 million dollars <<<> 21 million dollars <<– that was made on other items they did make.
    .
    We made money but we didn't cause we didn't get the "PROJECTED" income from it. Crap CCP why not say your could of made 100 million instead. Think Bigger!!!!
    .
    Nice Real World Scam CCP!!!!! So like the article said, take away this write off and they made profit in 2013 but this magic number made them loose money. Wonder how many tax breaks they get from this made up loss. Rich get richer cause they wright the tax laws – the poor get poorer and the middle class get taxed to death till they join the poor. Way of the world I guess.

    March 19, 2014 at 00:15 Reply
    1. Dirk MacGirk

      waaaaaah. thank god for the 99%. let me know when you do your taxes and claim any deductions or writeoffs. You sir are a fucking moron with no comprehension of what you are commenting on. Wouldn’t you have been better off sticking to how to catch a catfish with your bare hands?

      March 19, 2014 at 00:23 Reply
      1. abc123

        You are a bitter little troll. Please show us where Goons or CCP has touch you little boy. Don’t be shy alter boy. God still love you too.

        March 19, 2014 at 13:15 Reply
    2. Andrew Metzger

      The write-off comes from the amount of money they spent on the asset already…

      March 19, 2014 at 14:44 Reply
  24. free me

    my bet is its on the crest “code” , they arldy redoing alot of the codes in it last update.

    March 19, 2014 at 00:54 Reply
  25. Deifirtep

    Jovian ships removed from the game…

    “De-capitalized” code…
    Connection?

    March 19, 2014 at 01:09 Reply
    1. Deifirtep

      Of course… DUST is more likely the real culprit here.

      March 19, 2014 at 01:16 Reply
      1. Dirk MacGirk

        DUST? Not the code written for walking in stations? Or maybe the code for some other portion of Eve written long ago? or the code written for space vampires that walk in stations? who knows. CCP is more than just Eve.

        March 19, 2014 at 07:39 Reply
  26. Jevous Encule

    Whatever it is, 21 million is a huge loss and it does not make it sound like the company is in good financial state. It probably explains why the recent “expansions” feel more like patches then anything. It also probably explain why we have seen a few Devs leave the company recently. It does not look to good to be honest!
    Hopefully they will recover but…with all the competition in the gaming world out there (and I am not just talking about SC and ED), the road ahead is not getting easier.

    March 19, 2014 at 10:01 Reply
    1. Gandalf

      The good thing about all this is, if CCP stays another year in the red ink zone, they will no longer be able to afford to keep local anymore. Could be a good thing!

      March 19, 2014 at 15:40 Reply
  27. Andrew Metzger

    I would have a VERY hard time believing they spent 21 million on R&D for dust.

    March 19, 2014 at 14:30 Reply
  28. trolololo

    Lots of faggots white-knighting for CCP. Tear reservoir will increase when DUST goes belly up and other space MMO’s start eating EVE’s lunch when they (gasp) utilize MULTI-THREADING

    March 19, 2014 at 20:33 Reply
  29. elnator

    If they are writing it off that means no PS4 version so it’s effectively dead now. They’ll probably shut it down later this year.

    March 19, 2014 at 21:51 Reply
  30. CFC grunt

    Writing off WoD appears to be the most plausible thing. 21 mil accumulated activated R&D costs appears to me a little bit high considering it was prepre-alpha but well possible

    Incarna stuff and the license for real time ray tracing thingy they showed some years ago could be another list item they are writing off.

    Third there was a narrative FF2013, that CCP wanted to showcase something different from EVE VR/VALKYRIE but it was not ready to show so they quickly signed a deal with Occulus.

    The interesting question is more like: why are they writing it off NOW ?! is there a reason beyond accounting rules , that they wanted to write off this investment, what ever it was, in 2013 and not in the future ….

    March 20, 2014 at 12:38 Reply
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  32. Today, I went to the beach with my kids. I found a sea shell and gave it to my 4 year old daughter and said “You can hear the ocean if you put this to your ear.” She placed the shell to her ear and screamed. There was a hermit crab inside and it pinched her ear. She never wants to go back! LoL I know this is entirely off topic but I had to tell someone!

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