Real Talk - Daybreak investment in EQ

Discussion in 'The Veterans' Lounge' started by yepmetoo, Sep 30, 2019.

  1. yepmetoo Abazzagorath

    So, for the second time, the Everquest Producer (Holly) has stated in an interview that revenue in EQ has been on the rise since 2015.

    That said, how come:

    1) 2015 - 12 raids, 2016 - 8 raids, 2017 - 9 raids, 2018 - 8 raids
    2) 2015 - 7 zones, 2016 - 7 zones, 2018 - 6 zones, 2018 - 7 zones

    We get told that we got bare bones AA in TBL due to lack of investment into development. We have seen devs be fired/quit (though a couple hires too) in that time period. We saw a couple million $$ cash infusion from lifetime subs

    At what point is that money the players investing in this game going to translate into more/better product?
    Caell and Gyurika Godofwar like this.
  2. Hayzeus Augur

    Maybe revenue is on the rise, not because of increased incoming dollars, but because of decreased outgoing effort? There's more than one side to the revenue equation.

    She didn't say that cash flow has increased, and we have no way of knowing if the lifetime sub infusions represented an increase instead of just them finding a way to tread water for a year or two. The infusion from lifetime subs might have just offset a rampant sub cancellation due to poor quality in recent expansions. We have no way to verify any of that.

    So yeah, my money (no pun) is on revenue increasing due to layoffs and lower product output representing lower spending.
  3. Jhenna_BB Proudly Prestigious Pointed Purveyor of Pincusions

    In fairness, TBL has 8 zones and 11 raids. GMM is a package, the mere fact they spent resources to implement the zone slants to the side of revenue up, so more content.
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  4. yepmetoo Abazzagorath

    GMM is not TBL. GMM was anniversary content and they had been working on the zone for 3 years, it was supposed to be released years ago.

    And revenue is revenue, not profit. She didn't say profitability was up, she specifically stated revenue, meaning more money bring brought in. Nothing in there about margins.
    PCSS and Sancus like this.
  5. Sancus Augur

    No, that's not what revenue is. You're thinking of profit, which would be the difference between revenues and costs. Decreasing development costs would have no direct impact on revenue.
    I'm not an accountant, but depending on how they account for revenue, they may not have been able to record all of the money from lifetime subs as revenue currently. It definitely would factor into cash flow, though, so if anything cash flow should've grown more than revenue. In any event, the claim that revenue had increased year over year was on Lauren's LinkedIn at the time TBL launched, which preceded the lifetime sub offerings.
    Gyurika Godofwar likes this.
  6. Jhenna_BB Proudly Prestigious Pointed Purveyor of Pincusions

    We'll agree to disagree. It was all in Prathun's interview the time and difficulty it took to implement the zone. They don't do things like that operating in the red.
    PCSS likes this.
  7. Derresh Augur

    Enron claimed increased revenue year after year also:p
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  8. yepmetoo Abazzagorath

    I'm not trying to be a jerk about this. Just, slowly reducing content every expansion while paying the same amount, is something I accepted under the premise that the game is in a normal slow decline. But if revenue has been increasing, then it isn't exactly a reasonable thing to just accept less product for the same investment.

    If that investment is spent on wasting time nerfing eqlive to better server progression servers, doesn't motivate me as a customer either, if that's the case, but I can't believe the labor investment on that is commensurate with the revenue accrued, it has to be a net gain there.

    I am not saying "do more raids", as a raider, I'm saying, give us more content, more zones, more quests, and if raids, make more easier raids that allow a better justification of 1 raid or zone of raids at the end that are challenging for those of us that want a challenge.
    PCSS likes this.
  9. Endaar Augur

    The rather obvious answer is that a large portion of their revenue is from progression servers, which do not require developing new content.
    Vumad, rob1727 and Corwyhn Lionheart like this.
  10. Nennius Curmudgeon

    While letting this topic escape to public scrutiny, a small group is meeting in the Daybreak super secret basement, err dungeon to consider the next strategy to maximize revenue.

  11. I_Love_My_Bandwidth Mercslayer

    Obviously DBG is concerned with keeping the ship upright and afloat. EQ's revenue helps employ people and some of that revenue flows back into the game in the form of expansions, bug fixes, patches, tuning, code upgrades, etc. To suggest that every penny of profit be used back in EQ is ludicrous and incredibly short-sighted.

    You get to play a game that's been available and actively patched and expanded upon for 20 years. No other online game on the PLANET can say that.

    tl;dr Give DBG a break.
    PCSS, Coagagin and code-zero like this.
  12. yepmetoo Abazzagorath

    Who said anything about every penny of profit to be used back in EQ?

    Its simple. This is a product that requires investing revenue back into the system to generate future revenue.

    If revenue has increased, then investment should have increased, we shouldn't be getting less content. Very simple.

    EQ and EQ2 funded a lot of stuff over the years. I don't think its crazy to expect a static % of profits to be reinvested into the game as overhead so we continue having a game.
    Caell and PCSS like this.
  13. I_Love_My_Bandwidth Mercslayer

    But it is crazy.
  14. yepmetoo Abazzagorath

    Not into farming I take it?

    If they want to bleed the stone, when they could water the plant, that's on them, but as a customer, it makes it less attractive as a product.
    PCSS likes this.
  15. KermittheFroglok Augur

    I am an accountant, DBG is a privately owned company so they don't have to follow US generally accepted accounting principles. But it's interesting, with the recent ASC 606 (revenue recognition rule) changes, you could potentially argue that a publicly traded company could report all of the Lifetime Subscriptions on their books last year.

    Here's an article that non-accountants might be able to follow a little easier on revenue recognition. I'll follow the 5 steps outlined here.

    1. Identify the contract with the customer: DBG will flag an account with permanent AllAccess membership benefits for the lifetime of participating games, in exchange for the user's $299.99. Also remember that "
    DGC reserves the right, at any time and in its discretion, to change the pricing of the All Access membership, to add or remove games, and to modify the features of the DGC All Access membership"

    2. Identify the performance obligations of the contract: The performance obligation is that DBG flag an account with "Lifetime" AllAccess status, and that the user pay $299.99. Given the EULA, DBG could have technically closed the servers 12/31/2018 and had no residual obligations to those buying. (Although their reputation would've tanked.)

    3. Determine the transaction price: $299.99

    4. Allocate the transaction price: If you go with the interpretation above, its to the account flag. If you don't then an allocation related to subscription access time and DBC claims might come into play at this point.

    5. Recognize revenue as performance obligations are satisfied: Again, once DBG flagged my account with Lifetime Access, they technically satisfied their contractual obligation. The could gut AllAccess, cancel all the games, etc. and my reasonable recourse might be a civil suit on the grounds of fraud, not contract breach.

    With that in mind, you can at least argue that they could report the subscriptions all at once. Probably not the most conservative way to disclose it, but I think this is a good example you could debate either way.

    HOWEVER, you could argue back and forth around scenarios of the user account becoming unflagged or not getting service benefits the other users are. Then the argument above becomes more dicey.
    Sancus likes this.
  16. I_Love_My_Bandwidth Mercslayer

    I take your meaning, but when they offer less and people still buy it...why should they?
    Venau likes this.
  17. KermittheFroglok Augur

    yepmetoo, we're getting roughly the same number of zones. As others are pointing out, the decrease in raids is probably from a shift from interest in Live raids towards the TLP experience. I think we're also forgetting that EQ has had a couple live events over the past year and is going to have another one next year, that costs money. In fact, that and some of the recent marketing are likely where your three or four raids of dev time went.

    I'm a casual, so I don't mind as much because the marketing and hype over the past couple years has gotten my friends and I back into the game and is attracting more returning (and some new) players, which helps me get groups.

    HOWEVER, I can definitely understand how a raider would be disappointed, but we can hope that the fewer raids for "marketing & awareness" will translate into more new raiders later?
  18. yepmetoo Abazzagorath

    I don't want more raids. Said that earlier in this thread. Why would I want to have to raid more than 1 night a week? And the gear floods everything so that in 3 months you start farming for alts for 9 months as is.

    If they did more raids, I'd rather they did lower end raids that are more accessible to people not at the top end.
  19. Icaen Elder

    Be thankful we still have EQ at all. At least we're not E-freakingQ2. That game's even deeper on life support.
    PCSS likes this.
  20. MasterMagnus The Oracle of AllHigh

    Be thankful we have EQ at all, at least we're not Vanguard,Free Realms,Landmark,Next,H1Z1:Just Survive, H1Z1:King of the Hill, Z1 Battle Royale, Planetside 2, Planetside Arena, or Everquest 2.

    Also be thankful EQ earns enough to fund all of this junk. :rolleyes:

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