Oh that’s public info. You can read it in their quarterlies which are public info since they are traded on the NYSE. Generally, statements (and prospectuses) include info about profitability and expenditures and such.
How do you explain Final Fantasy XI or are you just ignoring its success like everyone else does?
–Dave
Final Fantasy XI is also available on the PC. That’s a pretty significant difference right there. Are there any console-exclusive MMOGs?
I don’t think that has any bearing on her argument that “no one yet knows how to make considerable money with client/server, persistent world subscription games on the console.” It’s pretty obvious that someone is doing just that. They announced 500,000 paying cutomers a month.
That includes both PS2 and PC players but the majority of their players in Japan are PS2. There’s definitely a considerable percentage of PS2 players here in the States too. So the statement is false. Someone DOES know how to make considerable money with client/server, persistent world subscription games on the console. It just so happens that the someone isn’t one of the well-known Western developers.
–Dave
Is there a breakdown of subscriptions on the PS2 vs. PC? It would be interesting to see how it’s done on both platforms in Japan and North America.
Ah, I see your point, Dave, and it makes sense. I wasn’t ignoring their numbers, I was simply looking at this from the profit/loss and amortization perspective, not the pure number of subscribers; that’s what really determines the success, business-wise. Perhaps we should define our respective meanings of “considerable” to give this some context.
Considering the amount of money that must have been put into the console version just to get it off the ground and what it costs to maintain such a world, they probably have not yet amortized the development, launch and marketing costs and probably won’t for about another 12-18 months or so, at the current rate of console subscribers. “Considerable” money (to me, anyway) won’t arrive in the coffers for another 12 months after that. All kitchen math, of course, because I’m going off industry grapevine info on costs for the game and my own knowledge of what it takes to develop and maintain one of these games, but it probably is not that far off.
So, while about 225k-250k paying console subscribers IS considerable and that point is taken, what can be bothersome to the industry over here is that one of the most well-known brands in console games, in a country with a high concentration of consoles, can garner only that many subscribers so far and it took the PC version to push them over 300k subscribers. They probably will amortize the console version and see OK to good profit, as long as they maintain their current subscriber base; if they push out the PC version into other Asian countries, such as mainland China, they’ll see a whole lot more profit with the franchise as a whole.
What they HAVE proven is that this is still an expensive proposition that requires deep pockets, lots of patience and multiplatform interoperability, even for a high-profile license like FF. So, it bears watching, but I’m still not prepared to plunk down the $15 to $20 million necessary to develop, launch and market a subscriber-based console persistent world. The barriers to entry and overall risks are still too high for what is essentially an as-yet unproven portion of the market, that being MMORPGs for the moderate to hard-core player on the console.
What is more interesting to me is the PC/console interoperabililty; that redeuces the PC development costs and increases the potential for overall profit greatly. Which, in the end, means R&D money for more games.
I’m sure the $99 price tag for the game since it needs the HD has made some wary of the game regardless of the name brand behind it. Still it looks like the game will be profitable in the long run for them.
Actually, Final Fantasy XI broke even by around December 2002, and started being profitable every month thereafter. Since it launched in May of that year, it didn’t take very long. Their most recent earnings on the game were as such:
The online gaming sector made 8.9 billion yen ($79.4 million) in sales and 2.3 billion yen ($20.5 million) in operation profits, with its massively multiplayer online role-playing game Final Fantasy XI responsible for most of that figure. FFXI currently has about 500,000 subscribers, and the figure continues to grow. Since the Japanese release of the game’s expansion disc, Rise of the Zilart, the number of subcribers has spiked. FFXI saw a jump in subscribers in October and March when services launched in America for the PC and the PS2 versions. In Asia, the online PC MMORPG, CrossGate, which has a total of over 10 million members in China, Taiwan, and Japan, continued to turn a profit for the company.
Also, the story of their breaking even:
According to a Bloomberg report, Square has stated that Final Fantasy XI has secured approximately 190,000 subscribers, which should increase to 200,000 by the end of the week. These subscription numbers are especially important for Square, since it means that the company will break even on the $16 million investment made to develop Final Fantasy XI and the infrastructure used to support the game.
I’m not sure what amortize means, but in any case, they started being profitable pretty much solely with the console release. Of course, I’m sure the amount of profit fluctuated based on the money used to develop the first (and now second) expansion pack and launch it in foreign countries.
That is to say, those are the facts, but I’d say it doesn’t prove too terribly much because no other console MMORPG is going to have the worldwide brand recognition of the most popular RPG series in the world.
And I always love pointing out to people who don’t give Enix the time of day that Fullmetal Alchemist made up more than a third of their operating profit for the last year. Go Enix!
-Kitsune
Interesting. BTW, the Dec 02 story is only that they were reasonably sure they would break even with 200,000 subscribers, not that they had. Not also that it took them almost 9 months and the release of the PC version in Japan to reach that figure. Plus, the $16 million development and launch figure doesn’t seem to count the marketing money. Still, I seriously doubt they amortized* all those costs in the first year while building slowly to 190,000 subscribers.
However, they seem to be doing well and that is good news for the console side of stuff; I hope they make a wheelbarrow full of cash. It seems likely they’ll achieve break-even this year, if they haven’t already; much depends on how much they spent on the US launch and infrastructure and their ongoing maintenance costs. Since the operating profit noted in the announcement was only $20 million (which usually means pre-tax and pre-overhead costs) on about $79 million in revenues, it was probably a fairly large sum. And we still don’t know how much of that was from FFXI and how much from the PC-based CrossGate in China, just “most” of it, which could mean anywhere from 51% to 80% or so. 10 million registered users in China probably translates to about 500 to 1 million people actually paying money, which could still mean a nice large chunk of change.
God, I love this industry!
*To amoritize, in this context, means to make back all expenses used to develop, launch and market the initial launch, while saying paying the ongoing maintenance infrastructure costs.