How much did NCSoft pay to buy out CoX from Cryptic?

A discussion on the Penny Arcade forums actually led me to ask this question. I had listened to the NCSoft conference call and they didn’t say how much NCSoft paid to buy out the other 50% of their interest in City of Heroes/Villains.

I did some digging through the financial documents and there’s no line item for it. However, comparing Q4 to Q3, there was a large jump in the “Other Intangible Assets” line from about 1.3 billion Won to 12.5 billion Won. That increase corresponds to $11.8 million US.

Now, Cryptic had about 135K subscribers last quarter. If you assume each subscriber pays the full $14.99 per month, minus 2.5% for credit card trasnaction, you get a gross revenue of $23.7 million US per year. If NCSoft had a 50/50 split with Cryptic on that, then Cryptic was getting … surprise, $11.8 million US per year.

So did NCSoft simply buy out CoX for one year’s revenues? The numbers are eerily similar, but $12 million seems a bit cheap. But a Price/Sales Ratio of 1.0 is not unusual.

I have no idea if the above is actually correct, however.


It’s possible that Cryptic wasn’t in the best bargaining position. If they knew Microsoft was going to be cancelling Marvel, there’d be no more funds coming from that direction, and they may have needed a significant infusion of cash to get Champions off the ground. Further, if you consider that the goal of Champions is, basically, to make CoX totally obsolete, it doesn’t seem like such a bad idea to sell out for whatever they can get, and be secure in their funding for the game they want to make.

If I´m not mistaken they also moved a significant part of their staff towards NC Soft. That´s also worth money, if they´ve decided they need to downsize.

As I understand it, the team who was maintaining and developing CoX is still doing it, only now they’re working for NCsoft instead of Cryptic.

Well, Cryptic is now working on at least 2 and possible 3 MMOGs – Champions Online, Star Trek Online, and/or a third mystery game. Not having to pay for CoX’s live team certainly helps reduce expenses in the short term, but they’ll be replacing all of those peopel with new developers anyway for the new projects. Unless Cryptic has been pocketing all of their profits from CoX for 4 years, they’ve probably received or will be receiving new outside investment funding as well.