Very strong Sales for GW2 in 4Q17

NCsoft published the most recent earnings report. GW2 had 34.9 bln Won of sales in 4Q17 and 83 bln Won in 2017. The numbers are very promising and Arenanet is trying to keep the momentum on a high level by overhauling several divisions of the game like cash shop or WvW. Let us hope the new (returned) players will stay longer and purchase a lot of gems.

Sourceirsvc.teletogether.com/ncsoft/ncsoft2017Q4_eng.php

RNG works! RNG WORKS! This is why no amount of forum threads will ever make anet change their gambling boxes in any shape or form. You are buying these things.

Also, strongest Q for GW2 is weakest Q for Lineage, an ancient game. L.O.L.

These numbers look promising, all though not unexpected given the release of Path of Fire. The sales figure will drop significantly in Q1 and especially Q2 of 2018 for obvious reasons. However, mount cosmetic (including the beloved RNG boxes) are most likely going to be the cause of a permament increase in sales even during slow times. Most of us saw that gold mine coming when they first announced mounts.

The report mentions the Lineage franchise doing better than ever. Players simply moved on to Lineage Mobile in korea which is the main cause of the crazy increase in overall revenue. The mobile market is what it is. Given all of that and the age of Guild Wars 2, the game itself is doing well enough in the west. Probably the main reason why they deem it worth it to invest heavily into big overhauls such as the WvW matchup rework and other things they talked about.

@Henry.5713 said:These numbers look promising, all though not unexpected given the release of Path of Fire. The sales figure will drop significantly in Q1 and especially Q2 of 2018 for obvious reasons. However, mount cosmetic (including the beloved RNG boxes) are most likely going to be the cause of a permament increase in sales even during slow times. Most of us saw that gold mine coming when they first announced mounts.

The report mentions the Lineage franchise doing better than ever. Players simply moved on to Lineage Mobile in korea which is the main cause of the crazy increase in overall revenue. The mobile market is what it is. Given all of that and the age of Guild Wars 2, the game itself is doing well enough in the west. Probably the main reason why they deem it worth it to invest heavily into big overhauls such as the WvW matchup rework and other things they talked about.

Sales will fall in Q1 and Q2. The question is how far? Back to 13-15 bln Won or stabilisation on a higher level about 18-20bln Won?

They seem to have found their groove on how to maintain high gem store sales. Mounts being a big factor and the reintroduction of old items through RNG boxes.Dout that will change in 2018. There are quite a few new players coming in these days also. Not to mention the release of content in small bits through LS updates to keep everyone busy and happy to support the game. Doubt they want to see another "all time low" like the one in Q4 of 2016.I'd assume 15-17 billion Won per quarter would be feasible during regular times and something like 19-22 billion during high times such as christmas.There are quite a few factors which are not as easy to predict. We shall see.

Isn't this supposed to be the way it is? If ArenaNet calculated their prices right, this should cover all/much of the cost of the expansion pack. Now you should see if your new customers spend money together with the veteran players. Expecting permanent sales increased is unrealistic and nonsensical. So having a spike and then far lower income is normal, and I think we all know that.

To me, it is still a surprise how much income this product generates inbetween release cycles. Normally it is:PRODUCT SALE - nothing PRODUCT SALEHere it isPRODUCT SALE - hundreds of thousands Dollars income - PRODUCT SALEquarterly.

Other developers also have the expenses like staff, office space, power,... WITHOUT permanent cash shop income, simply because these games have no such ways of generating income but often free content as well per DLC.

The only ones complaining are stockholders I guess.

Excelsior.

@Zedek.8932 said:Isn't this supposed to be the way it is? If ArenaNet calculated their prices right, this should cover all/much of the cost of the expansion pack. Now you should see if your new customers spend money together with the veteran players. Expecting permanent sales increased is unrealistic and nonsensical. So having a spike and then far lower income is normal, and I think we all know that.

To me, it is still a surprise how much income this product generates inbetween release cycles. Normally it is:PRODUCT SALE - nothing PRODUCT SALEHere it isPRODUCT SALE - hundreds of thousands Dollars income - PRODUCT SALEquarterly.

Other developers also have the expenses like staff, office space, power,... WITHOUT permanent cash shop income, simply because these games have no such ways of generating income but often free content as well per DLC.

The only ones complaining are stockholders I guess.

Excelsior.

for games with microtransactions it's actually more common to generate more income with lootboxes than with normal releases, and we are talking big players here, like ubisoft

Considering the number of new and returning player topics we've seen on this forum I'm not surprised, but it's nice to see it reflected in the report.

@"Kheldorn.5123" said:RNG works! RNG WORKS! This is why no amount of forum threads will ever make anet change their gambling boxes in any shape or form. You are buying these things.

It's almost like they released an Expansion... oh wait, they did!

@"Kheldorn.5123" said:RNG works! RNG WORKS! This is why no amount of forum threads will ever make anet change their gambling boxes in any shape or form. You are buying these things.

Sad but true. Even if, like @Asum.4960 says, there's also an expansion and all, doesn't matter. To the managers, RNG lootboxes for mount skins are the future, done. Do more of it.

@"Kheldorn.5123" said:for games with microtransactions it's actually more common to generate more income with lootboxes than with normal releases, and we are talking big players here, like ubisoft

Indeed, but you need all customers there to keep a reasonable income. I am not interested in those RNG things, so they have left me out as customer. Of course, the break-even point is reached in literally no time. But I would just invest in actual content.

Sorry for my poorly formatted text. I am on vacation and right now my Surface type cover broke... On-screen keyboards are awful...

This a mix between a true Buy-to-Play model and a Free-to-Play game with a huge cash shop in the end. Traditional release cycles or product cycles do not work here.The move towards a cash shop heavy game, compared to older titles at least, is greatly influenced by the mobile market. There is this idea that you should never have to pay for anything you do not want and should always be able to decide what you wish to pay for. The main reason behind why we heard more people complain about the debatably quite low price of the expansion than about overpriced gem store items.It shouldn't come as a surprise for this very reason how much money the game is able to generate between expansions nor that this figure might permanentIy increase, even if by a small margin such as 10-15%, on the back of popular gem store additions like the mount cosmetics.The huge spikes will still happen whenever a big expansions drops. Putting the increased revenue during these months aside, the expansion are also the major driving force behind the influx of new and possibly returning players. They thus influence the sales during slow times even further by bringing in new players. Making them quite a success even if they just manage to break even.

@Zedek.8932 said:

@"Kheldorn.5123" said:for games with microtransactions it's actually more common to generate more income with lootboxes than with normal releases, and we are talking big players here, like ubisoft

Again, no. If they have big whales paying every month they are better than you buying expansions once in 2 years.

@"Kheldorn.5123" said:

@Zedek.8932 said:Isn't this supposed to be the way it is? If ArenaNet calculated their prices right, this should cover all/much of the cost of the expansion pack. Now you should see if your new customers spend money together with the veteran players. Expecting permanent sales increased is unrealistic and nonsensical. So having a spike and then far lower income is normal, and I think we all know that.

To me, it is still a surprise how much income this product generates inbetween release cycles. Normally it is:PRODUCT SALE - nothing PRODUCT SALEHere it isPRODUCT SALE - hundreds of thousands Dollars income - PRODUCT SALEquarterly.

Other developers also have the expenses like staff, office space, power,... WITHOUT permanent cash shop income, simply because these games have no such ways of generating income but often free content as well per DLC.

The only ones complaining are stockholders I guess.

Excelsior.

NCsoft metioned in one of the conference calls that in the relesase quarter of HoT and the quarter after 66-75% of the sales were generated by gem sales. The micro transactions are therefore their main source for sales and income,

Guilty. I exchanged a lot of gems to gold just after the RNG mount skin loot box debacle because exchange rate was good.

I doubt that most gems sales come from the RNG mounts. It is a very easy goal to go with in-game gold and not spend a dime (MO himself said that when an item is priced around 400-500 gems most buy it with in-game gold.). If indeed gems sales are so good (difficult to know how much it is from the sales) my bet would be that most come from the expensive mount skins and the Black Lion chest rework. Especially the chests.

With the rework that makes the chests seem "fairer" people have been buying them like candy. In amounts you cannot really do with in-game gold that easily.

Well one way or the other healthy income means healthy game. As long as the in-game skins (PoF really had a lot of them) and the free content and cadence remains as it is now this is really good news.

@"Kheldorn.5123" said:Also, strongest Q for GW2 is weakest Q for Lineage, an ancient game. L.O.L.

It has been a huge cash cow for a good deal in korea from what i know. See the q4 2016 revenue? For what i understand there has been a huge exit of players from it because of the backlash on cash shop stuff and because many moved to the new mobile game. Before now, L1 might have been ancient but was pretty much the WoW equivalent of korea.

@"Turin.6921" said:I doubt that most gems sales come from the RNG mounts. It is a very easy goal to go with in-game gold and not spend a dime (MO himself said that when an item is priced around 400-500 gems most buy it with in-game gold.). If indeed gems sales are so good (difficult to know how much it is from the sales) my bet would be that most come from the expensive mount skins and the Black Lion chest rework. Especially the chests.

With the rework that makes the chests seem "fairer" people have been buying them like candy. In amounts you cannot really do with in-game gold that easily.

Well one way or the other healthy income means healthy game. As long as the in-game skins (PoF really had a lot of them) and the free content and cadence remains as it is now this is really good news.

@"Kheldorn.5123" said:Also, strongest Q for GW2 is weakest Q for Lineage, an ancient game. L.O.L.

I'm aware of Lineage's phenomenom in Korea BUT this is only Korean market. Meanwhile GW2 is NA + EU + China. And GW2's best is still their worst. That's kinda sad.

@"Kheldorn.5123" said:

@"Turin.6921" said:I doubt that most gems sales come from the RNG mounts. It is a very easy goal to go with in-game gold and not spend a dime (MO himself said that when an item is priced around 400-500 gems most buy it with in-game gold.). If indeed gems sales are so good (difficult to know how much it is from the sales) my bet would be that most come from the expensive mount skins and the Black Lion chest rework. Especially the chests.

With the rework that makes the chests seem "fairer" people have been buying them like candy. In amounts you cannot really do with in-game gold that easily.

Well one way or the other healthy income means healthy game. As long as the in-game skins (PoF really had a lot of them) and the free content and cadence remains as it is now this is really good news.

@"Kheldorn.5123" said:Also, strongest Q for GW2 is weakest Q for Lineage, an ancient game. L.O.L.

Not really. The Korean market is a lot larger that both EU/NA in terms of spending and could be equal in numbers when it comes to MMOs. It has a population of 50mil and accounts for 15% of the global market in revenue. It is insane. It is always sth like 60-70% of the total revenue for NCSoft. BTW the Asian market for L1 includes Taiwan and Japan. Much more people from the general population (relatively speaking) play MMOs, have no issues with grind, are much more tolerant with p2w cash shops and they spend a lot more money than the average western player. Also GW2 (as the others) does not include the china revenue. Everything from china is part of royalties (later slide) since you are required to give the IP to a Chinese publisher for it to be published in the country from which NCsoft gets royalties.

Have I been underestimating Blade and Soul to that degree? I mean, yeah, it's a whale-fest but I didn't think it was managing such steady numbers over the last 2 years. With all the changes to make old currencies and equipment obsolete, I thought it would piss more people off than make them more money.

I fear you may be a tad optimistic here. If you look on page 6 of the presentation you see that 2017 did a bit better for GW2 than 2016 but didn't do nearly as well as 2015. Mind you that both 2015 and 2016 benefitted from HoT but revenue in 2016 dropped around 28% compared to 2015 and 2017 is only 8% better than 2016. That's perhaps not as much as they might've hoped.

With PoF they did something slightly differently also by releasing it at the end of Q3 so that quarter was already up a bit but Q2 was objectively the lowest for GW2 since the game started.

Because of that decision, they might lose momentum for Q1 of 2018 which could mean bad things for 2018 overall from a revenue point of view. I noticed there was a thread from the devs started to do something "for the fans with marketing". Sounds like some sort of refer a friend program or something but I suspect that they are trying something to get the revenue up for at least Q1 to give to overal year a chance to be reasonable still. Not being cynical here, I think it's a good idea that they do something to ensure at least a good Q1 to carry the game through to the next expansion. Not sure where the numbers are for them but I imagine they'll need to hit a minimum amount of revenue to go on and warrant an investment in a next expansion.

I think from that point of view it's difficult to see if PoF was successful at this moment. Revenue was up last quarter but is it enough? It's not peaking as much as HoT did it appears but since they released PoF a bit earlier to save Q3 presumably, we'll have to wait and see what Q1 of 2018 will do. If they can get another quarter of more than 30K (x million krw), then you could argue it was successful enough. If it doesn't hit such numbers it could mean that 2018 will be a bad year revenue-wise and the downward spiral for revenue will continue.

Now for comparison 35k on this graph for Q4 means about 32 million USD in revenue. So that's just over 10 million USD per month. Q2 did about 12 million USD which was 4 million USD per month. So we'll just have to wait and see if Q1 will be good still and if the drop off doesn't come till Q2 the question then becomes how far will it drop? And then the final question is whether that will good enough for future investment into the game?

I'm definitely not saying the game is dead or something silly like that but I'm not convinced the down trend for revenue that continued between HoT and PoF will not continue after the PoF drop off point that will undoubtedly come either in Q1 or Q2. Time will tell as usual, but I think it's too early to say that PoF was succesful or not financially.

PoF, new mount skins, loot boxes."Strong sales".

We don't know how much of that jump is from sales of the game versus sales in the gem shop. All we know is that income is up.

I remember reading that, on a year-by-year basis, about half of GW2's income was from the cash shop. It's hard to know if that means it would be e.g. 60-40 during pre-sales & launch periods and 30-70 the rest of the time or whether it's consistent from quarter to quarter.

Even if the sales are 50% cash shop, we don't know what types of items generated the most revenue. Is it 2k Mountfits? Or server transfers? or 400 gem RNG licenses? Or the new BL keys? More likely, it's some complicated combination of all of the above (and more).

So all we really know is that income is up. And that is good for the game and for ANet. What it means for the long run... we won't know until we see how ANet plays things out going forward.

We saw income was up with HoT for 2 quarters and then it dropped lower than before and continued downward. I suspect that when people get that hype from an expansion it also drives up cash shop sales at the same time. So I would say those two are linked in such a period of time. Then when people've played through the new content it drops down again. I see no reason why that wouldn't happen again.

If they play their cards right they can still get some revenue with what's left of the momentum of PoF but I do think that something needs to be done to stop the trend outside of the expansion peak.

The fact that the revenue was up last quarter is indeed a good thing. If it was up to a satisfactory level for them is another question. Now I cannot say anything with certainty either but these RNG licenses that you mention are something new (I haven't played for a while) and RNG rewards are generally not a sign that things are going well.

very glad the whales keep the game going for us all . even tho i do not buy gems or gem store stuff unless i got the in game gold to buy it . never spend real world money on fake stuff . the only time i spend real world money on this game at all is when a new pack maybe comes out that i like . :o

Wow. In US$, the revenue difference between Q3/17 and Q4/17 is about $13.5M. To put that in perspective, if the increase was solely based on PoF basic sales, that would be 452,578 copies of PoF _beyond the pre-purchase copies and those bought between release and the end of September. Unless the increase is more gem purchases than XPac sales, it is now no longer safe to assume that HoT sold more units than PoF did.

On the flip side, if the increase was solely due to gems sales for mount skins, then that would mean 675,000 units at 1600 gems, or 540,000 of the 2K gem units. Sure, what's most likely is that there was a mix of things going on: PoF base, deluxe and ultimate, HoT bundled or standalone, mount bundles, individual mount skins, and the adoption licenses. However, you slice it, the increase is really good news for ANet.