GW2 Sales/Revenue/Earnings Report 3Q-2023

[Zok.4956]

The new GW2 Sales/Revenue/Earnings Report 3Q-2023 has been published. Therefore here is my annotated overview of the GW2 quartely revenue from 3Q-2012 (release) until the actual reporting quarter, which is now 3Q-2023:

Quarterly revenue for the third quarter of 2023 is KRW 20.977 billion. As mentioned in previous quarters, I consider quarterly revenue above KRW 20 billion to be quite good and sustainable for the game.

However: The SotO expansion was released in Q3 2023. And I would actually have expected that there should have been a clear upward sales peak because of this. Especially since the pre-sales sales of the expansions are also reported financially in the release quarter.

For me, two conclusions are therefore most obvious: Either the SotO sales were not that good, or the SotO sales were good, but the trend of general sales decline from the previous quarters continued in Q3 and thus weakened the sales peak.

How do you see it?

EDIT: Updated Image to inline-attachement

Edited April 19 by Zok.4956

[illuminati.8453]

Couldn't they somehow be pushing sales into next quarter calculation?  ANet mentioned it did amazingly well.  

[Solvar.7953]

I wonder if some of this is people who will spend $x on a game per quarter.  In the case of an expansion coming out, that money is spent on the expansion, where as at other times it is spent on gem store items.  So while SotO may do well, it may have poached some sales from the gem store.

There are certainly posts in the forum now and again of players who want to support the game and give Anet money, and thus buy gems to do this.  So when the expansion comes out, they buy, and met their goal of giving Anet some money.

 

[Zok.4956]

3 hours ago, illuminati.8453 said:

Couldn't they somehow be pushing sales into next quarter calculation?

Good point. That's not entirely out of the question. The expansion isn't quite finished yet and you could therefore view part of the sales as "income" and part of the sales as "advance payments", if NCSoft's financial reporting rules allow something like that. But so far there hasn't been anything like that in the past. There may have been questions about this on the analyst call, but I didn't listen to that.

However, saying something did amazingly well can mean all sorts of things if the marketing department isn’t more specific. 😉

[zefaistos.2601]

8 hours ago, illuminati.8453 said:

Couldn't they somehow be pushing sales into next quarter calculation?  ANet mentioned it did amazingly well.  

Yes, because they did this with EoD, it was only accounted in 2022 Q2 report, and PoF expansion revenue was split between the quarter of release and the next quarter (PoF was released in the last month of the quarter).

However, every time an expansion was included, the report also stated about the expansion release and increase in marketing costs due to the new expansion. In 2022 Q1 you don't see anything about EoD expansion or marketing costs, which makes sense since the expansion was not included at all in the report. But in this new 2023 Q3 the report talks about an expansion release and marketing costs increase due to the expansion, not specically GW2 but I don't see the other games fitting this category. So basically, I'm pretty sure at least a portion of SoTo is included in this Q3 report, but could be only partial.

[Lucius.2140]

12 hours ago, Zok.4956 said:

For me, two conclusions are therefore most obvious: Either the SotO sales were not that good, or the SotO sales were good, but the trend of general sales decline from the previous quarters continued in Q3 and thus weakened the sales peak.

How do you see it?

Better to wait, but clearly capping the game around 20 KRW billion, i doubt a release around SoTo's size could create a bigger effect. 

I suppose the best way to analyse it will be after q1 2024, since there could be earnings in Q4 2023 and the new weapons in Q4 could mean more sales.

There seems to be some recovery from both COVID and Cantha (at least its announcement), but is unclear their effect at this point with only this data.

Overall i could speculate, but better wait and see.

[Zok.4956]

9 hours ago, zefaistos.2601 said:

Yes, because they did this with EoD, it was only accounted in 2022 Q2 report

EoD was released in February 2022, which is around in the middle of 2022 Q1. Do you have an official (which means from NCSoft) source of your statement, that EoD sales (including pre-purchase sales) that happened during (and before) 2022 Q1 were not reported in 2022 Q1, but in 2022 Q2? Thanks.

 

9 hours ago, zefaistos.2601 said:

PoF expansion revenue was split between the quarter of release and the next quarter (PoF was released in the last month of the quarter).

According to NCSoft's previous statements (and their financial rules), sales are reported on an accrual basis in the quarter in which they occurred. Deviating from this, only the sales of pre-purchases of a game or expansion are reported in the quarter in which the corresponding release took place.

PoF was released September 22, which is Q3. Therefore, all PoF pre-orders and current Q3 sales up to September 30th were reported in Q3. Of course, the PoF purchases in October were only reported in Q4.

Did you mean this? If not, it would be nice if you could give me an official source.

[ZawaZawa.4179]

If the data is accurate, it doesn't take a genius to see the down trend.  Wether this is an issue with the MMO genre in total or just GW2 remains to be seen

[Zok.4956]

9 hours ago, zefaistos.2601 said:

However, every time an expansion was included, the report also stated about the expansion release and increase in marketing costs due to the new expansion.

The comments/highlights in their statement simply provide a brief overview of some of the key figures and their reasons. The absence of comments/highlights in their statement on a topic does not mean that the topic is not included in the financial figures in the report.

 

9 hours ago, zefaistos.2601 said:

in this new 2023 Q3 the report talks about an expansion release and marketing costs increase due to the expansion, not specically GW2 but I don't see the other games fitting this category.

A quote from the report: "Marketing expenses increased by 126% qoq, driven by advertising for the launch of new titles and expansion pack on a domestic and overseas basis,"

"expansion pack" could be GW2, but "launch of new titles" means not only another game, but more than one other game. New game releases usually have a higher marketing budget (because they have a chance of higher sales) than game expansions.

Another quote from the report: "Legacy PC online games posted KRW 93.2 billion, up 6% qoq with various content updates and expansion pack launching effect". The could include Lineage, AION, B&S and GW2, because they all were up qoq (only Lineage 2 has less sales qoq). 

So, their above statement are about several games.

 

9 hours ago, zefaistos.2601 said:

I'm pretty sure at least a portion of SoTo is included in this Q3 report, but could be only partial.

Agreed.

[MuscleBobBuffPants.1406]

2 hours ago, Zok.4956 said:

According to NCSoft's previous statements (and their financial rules), sales are reported on an accrual basis in the quarter in which they occurred. Deviating from this, only the sales of pre-purchases of a game or expansion are reported in the quarter in which the corresponding release took place.

It just seems straight up what others and I thought which is that SoTo didn't sell well.

[Zok.4956]

Just adding links to previous quarters for completeness:

 

 

 

 

 

 

 

 

 

[Ruufio.1496]

Imagine if they generated hype and released an expansion like PoF or HoT. I could see sales going higher than EoD release. If they seriously put effort into the expansion and the presentation. I didn't play for 2 years and never heard a thing about SoTO. No new classes doesn't help any.

 

Imagine if they released a brand new class like they did for revenant. Would be huge.

Edited April 19 by Ruufio.1496

[kharmin.7683]

11 minutes ago, Ruufio.1496 said:

 

 

Imagine if they released a brand new class like they did for revenant. Would be huge.

I think that it would be a balancing nightmare. 

With all of the professions, and their elite specs and now weapon mastery across them, what else is there to implement?  What new class would bring something to the game that isn't already covered by existing ones?

[Inssengrimm.7924]

Having an actual roadmap help and will show results soon i belive.
But there are things that need improving.

They really need to hype the game more.
And somethings need to be invested in, SotO is not bad on in itself.

But compared to HoT, PoF and EoD is really not there, and i think something an MMORPG cannot stay away from is class fantasy.

Elite Specializations need to comeback.
The weapon masteries are not enough, maybe do Elite Specializations with the current weapon masteries first. 

But any new expansion really need that hype. And there is so many weapons that could fill more roles and cover more fantasy, is just a thing of imagination.
I would sincerely get rid of the idea of "off-weapon" and make all one handed weapons to have 1-5 slots, 3 for main, 2 for secondary.

Yes, that means a double shield class arround somewhere, there you go, now you have a new Elite Specialization. 

[Zera.9435]

On 11/15/2023 at 5:18 AM, ZawaZawa.4179 said:

If the data is accurate, it doesn't take a genius to see the down trend.  Wether this is an issue with the MMO genre in total or just GW2 remains to be seen

Actually there is no obvious down trend. The average over the years is kinda consistent around 20k, especially if you ignore the outlier that is the game's release. Obviously some years were better than others, but this down trend you speak of is not really a thing when you look at the entire thing.

[Astralporing.1957]

5 hours ago, kharmin.7683 said:

I think that it would be a balancing nightmare.

Releasing a new profession is a much less of a balancing problem than releasing a set of especs were. That's because (again, unlike with especs) when adding that profession you do not completely unbalance all the already existing ones.

5 hours ago, kharmin.7683 said:

With all of the professions, and their elite specs and now weapon mastery across them, what else is there to implement?  What new class would bring something to the game that isn't already covered by existing ones?

Same as with some (well, actually most) of already introduced especs - different thematics/aestethics/feel of play. Don't underestimate the appeal of that. In reality, people do not want new professions because they want to do completely different things than before. They want them because they desire to do exactly the same things, just in a different way. And for that there is a really wide field of possibilities.

Edited April 19 by Astralporing.1957

[Gwynnion.7364]

The elephant in the room is GW2 is 12 years old.  It's a known quantity and the people who want to play it basically already are.  They could probably get more previous players to come back and get some interest from others, but it's going to take more than SOTO style mini-expansions, as those are only designed to (hopefully) keep the existing players interested.  A new race, a new profession, new elites, a new continent, something to shake up the status quo is probably required.  But again, nobody involved seems to want to invest that level of resources in a 12 year old game.

GW2 can probably eke out another couple of years this way but from a business standpoint, I think they're going to have to talk about GW3 or whatever comes next pretty soon, assuming they will even be able or allowed to make it.  Because the most common thing I see people say about GW2 is, "Is that game even still alive?"

[StraightPath.3972]

If there's one lesson to be learned with GW2 is that strong foundation is strong.
10 years+ and ticking - still keeps an extremely steady pace, with small ups and downs related to content drops and draughts.

These relatively small fluctuations are proof that the game at it's core is fun and has plenty of good systems that keep players coming back and engaged, even if there's no new content at particular moment.

This is where horizontal progression and other good design choices really pay off.
Tons of individual objectives a player can choose instead of mandatory hunt for bigger stick.
Shared resource nodes and ressing other players.
Profession buildcraft and fashion wars.
Megaservers.
Exploration and Scavenger hunts.
Gold to Gem exchange.
 
These are but few but most notable things that make this game stand the test of time and player engagement.
It may not be perfect, but kitten is this game solid.



 

[Zera.9435]

20 minutes ago, Gwynnion.7364 said:

The elephant in the room is GW2 is 12 years old.  It's a known quantity and the people who want to play it basically already are.  They could probably get more previous players to come back and get some interest from others, but it's going to take more than SOTO style mini-expansions, as those are only designed to (hopefully) keep the existing players interested.  A new race, a new profession, new elites, a new continent, something to shake up the status quo is probably required.  But again, nobody involved seems to want to invest that level of resources in a 12 year old game.

GW2 can probably eke out another couple of years this way but from a business standpoint, I think they're going to have to talk about GW3 or whatever comes next pretty soon, assuming they will even be able or allowed to make it.  Because the most common thing I see people say about GW2 is, "Is that game even still alive?"

Obviously it still is. Not our fault those people are ignorant of that fact. Personally I blame the streaming community for creating that 'dead game' rhetoric because all they do is jump around from game to game to get more views. Does it have 10 million players online at any given moment? No. Does that need to be the case? No. Diablo 2 is even older than GW2 and it STILL has an active player base. Good games are good games, and GW2 is just one of many. Just because it's not the game everyone is talking about (or just because a particular streamer isn't streaming it) does not mean it's a dead game.  I wish more people would understand that.

[Zok.4956]

9 hours ago, Gwynnion.7364 said:

The elephant in the room is GW2 is 12 years old.  It's a known quantity and the people who want to play it basically already are. 

I agree.

9 hours ago, Gwynnion.7364 said:

They could probably get more previous players to come back and get some interest from others

I don't know how that could be done. There is currently no global event like the Covid pandemic that has resulted in many people being at home and therefore playing a lot more in general, from which GW2 (and EoD sales) was able to benefit significantly.  SotO probably brought many players into the game with the new legendary open world armor. But you can't repeat something like that at will.

However, I feel like with some changes in the game, GW2 takes things from other games and becomes more and more like them. Possibly to get more players switching from those games to GW2. Of course with the risk that players who play GW2 (because GW2 is not like those other games) will no longer play.

 

9 hours ago, Gwynnion.7364 said:

but it's going to take more than SOTO style mini-expansions, as those are only designed to (hopefully) keep the existing players interested

I believe that is the current strategy. Anet no longer dares to experiment with new things or innovations, but simply tries to continue what seems to be successful with more and more content bites and regular small expansions. In order to keep sales at the current level for as long as possible.

 

9 hours ago, Gwynnion.7364 said:

I think they're going to have to talk about GW3 or whatever comes next pretty soon, assuming they will even be able or allowed to make it

I agree. NCSoft has already spoken about GW3 when asked by analysts. However, it is not really clear whether Anet is already developing GW3 or whether there are just thoughts about it. Because it is not clear whether an internal piece of information slipped out from NCSoft, or whether something was said incorrectly, or whether there was a translation error or something similar 

There are people who think that far too little content is produced for the number of employees that Anet has. So Anet inevitably has to work on other things. I'm not sure about that. Anet is working on two mini-expansions at the same time.

 

Edited April 20 by Zok.4956

[Doggie.3184]

On 11/15/2023 at 10:13 AM, MuscleBobBuffPants.1406 said:

It just seems straight up what others and I thought which is that SoTo didn't sell well.

Not a good change goin' from "Complete Expansion" with eventually tons of living story maps to basically buying "Early Access" to an Unfinished Expansion that will have no living story with content that could become disappointing when they finally release ages later such as how the story's been pretty much goin' downhill and the fact that presently I'm not able to use my new Thief Axe at all because they decided late in development to give it a sound effect that obliterates my eardrums, which wasn't something I could know would happen before-hand cuz it wasn't part of Beta or Ads.

I'm not very excited for the next Xpan if they gonna be selling unfinished content and unreliable promises again.

[Linken.6345]

54 minutes ago, Doggie.3184 said:

Snip

I'm not very excited for the next Xpan if they gonna be selling unfinished content and unreliable promises again.

be prepared to not be excited then mate.

[Loke.1429]

I believe they knew this expac would sell less, due to less features / less devtime, so maybe cost/earnings-wise it is very good. Other expacs took multiple years, and soto did not.

This is not a critisism of the new expac model, which is very good in my opinion (but the trickle is not good, needs more up front). They just need to make sure that the total player experience over time will be better with an  annual expac model. For me and what I care about, wvw content and balance, content wise is better than before - in terms of number of changes, but on the balance side currently it is a big disappointment.

Edited April 27 by Loke.1429

[Gehenna.3625]

On 11/14/2023 at 7:20 PM, Zok.4956 said:

The new GW2 Sales/Revenue/Earnings Report 3Q-2023 has been published. Therefore here is my annotated overview of the GW2 quartely revenue from 3Q-2012 (release) until the actual reporting quarter, which is now 3Q-2023:

Quarterly revenue for the third quarter of 2023 is KRW 20.977 billion. As mentioned in previous quarters, I consider quarterly revenue above KRW 20 billion to be quite good and sustainable for the game.

However: The SotO expansion was released in Q3 2023. And I would actually have expected that there should have been a clear upward sales peak because of this. Especially since the pre-sales sales of the expansions are also reported financially in the release quarter.

For me, two conclusions are therefore most obvious: Either the SotO sales were not that good, or the SotO sales were good, but the trend of general sales decline from the previous quarters continued in Q3 and thus weakened the sales peak.

How do you see it?

EDIT: Updated Image to inline-attachement

You made a big mistake with this. You say it's billions of korean won but it's actually millions. Check the financial reports very closely. Look at where it says "Unit". It's million and not billion. You got confused because above that they quote the totals in billions but that's because they say for example 93.2 billion instead of 93,196 million (Q3 2023 report) for the total sales for their PC division. Notice there's a point in the first amount and a comma in the second.

GW2 has stabilized in recent times but they don't actually make as much as you think. 20,000 million krw is less than 15 million usd. So let's say about 5 million usd per month. Considering the total costs they will have every month of equipment, offices, software and mostly the salaries of staff, that's not actually a whole lot. And it's probably the reason why NcSoft cut their staff a few years ago.

Edited April 27 by Gehenna.3625

[Zok.4956]

45 minutes ago, Gehenna.3625 said:

You made a big mistake with this. You say it's billions of korean won but it's actually millions. Check the financial reports very closely. Look at where it says "Unit". It's million and not billion. You got confused because above that they quote the totals in billions but that's because they say for example 93.2 billion instead of 93,196 million (Q3 2023 report) for the total sales for their PC division. Notice there's a point in the first amount and a comma in the second.

Sorry, I don't see the mistake your are mentioning. 93 billion = 93000 million (93,000 million with thousands separator), And 20 billion (GW2 exactely: 20.977 billion) are 20000 million (GW2 exactely: 20977 million which is 20,977 million with thousands separator). 1 billion = 1000 million (1,000 million). Or in other words: 1 billion = 10⁹ and 1 million = 10⁶

BTW: There are other countries (with so called "long scale") where 1 billion = 10¹² and 1 million = 10⁶ but the NCSoft report is clearly not based on that.

50 minutes ago, Gehenna.3625 said:

GW2 has stabilized in recent times but they don't actually make as much as you think. 

Why do you think you know what I think, so that you could says that they don't actually make as much as I think? 😉

Since we don't know the costs of GW2/Anet because they are not reported individually, we actually cannot say whether there is a lot or a little (or no) profit left over from the sales.

My conclusion that KRW 20 billion per quarter is sufficient is only based on the assumption that if this amount was not sufficient, GW2 would have been discontinued years ago when the sales were much lower.

 

1 hour ago, Gehenna.3625 said:

20,000 million krw is less than 15 million usd.

I agree. 20 billion KRW = 20,000 million KRW = 14.5 million USD.  But I didn't say anything to the contrary.