Home › Game Forums › Rift
Howdy, Stranger!
It looks like you're new here. If you want to get involved, click one of these buttons!
Quick Links
Shocker? Rift Maker Trion Worlds Considers Going Public **Poll**
Rift Maker Trion Worlds Considers Going Public
"Redwood City-based MMO developer and operator Trion Worlds, a company that has raised over $100M in venture capital, may soon file for an initial public offering."As we build scale and become more profitable, [an IPO] is clearly on our horizon at some point," CEO Lars Buttler told Reuters."
So the question is, if things are going well... is going public where you have to now report to stockholders instead of investors a better thing or should they stay private?
How do you view this sign?
Comments
Well it is a good sign because pretty sure we can all accept they dropped 50mil into Rift from their own statements and have probably made that back by a lot. Only issue is every dev that has gone public has been baught out like Blizzard and Bioware.
I will not pretend to know how it works, but couldn't a major company come in a buy them up and take control over the direction of the company? Right now it seems like they are taking every dime we give them and dropping it back into Rift which is a good thing.
I think it is a good sign. You never know what agenda investors have (at least some). I assume going public would give them a little more freedom idea wise without the worry that investors would dictate certain things.
Good sign, horrible timing. The markets are scared of IPOs fearing another dot com crash.
Where are they based? Is Trion in USA? I wonder where the IPO will list.
It depends on how they do the stocks. You can have a publicly traded company that is still mostly owned by the company itself or by an individual (Starvault works this way...mostly owned by that one guy). In which case, another company couldn't 'take over', but they could certainly influence the company.
I can not remember winning or losing a single debate on the internet.
Yeah, it's a U.S. based company.
The interesting thing in the article I found was this statement:
Says their IPO success will be based on them having "more hits" in the coming months to prove it's "IPO worthiness".
I'm not sure how well a game like EoN is suited to go up against the competition in RTS play. That field is even more crowded than AAA mmos are, with games that corner the market already, and Defiance being based on a television show not even in existence yet AND being from the crappy SyFy channel that no one watches.
Then you figure there's no telling what's going to happen with Rift vs TOR, GW2, TSW, ArcheAge, etc, etc, etc.
I have a feeling that any investor thinking of going that route clearly has no idea of all of that at all. They probably just look at base numbers.
"TO MICHAEL!"
So they have done very well then. One thing I must say about them they do plow back the money into Rift and they continue to work very feverishly on it and keeping the updates coming which I wish more p2p games would do.
Amen, the crazy thing is this should be expected of p2p although they tend to go above and beyond in my eyes, time will tell.
1. Trion raised a little over 100 million dollars total. They spent 50 million on Rift and the rest on headquarters, business expenses and making two more games (EoN/Defiance)
2. End of Nations has already been pushed back as of last month due to "unspecified reasons" to 2012. There is no word whatsoever on the progress of Defiance as far as how far out to expect it and how it's progressing.
3. Rift has been running non-stop deals and special pricing since right after the first month. There is no promo they haven't touched without a sale attached to it in just eight months time. They've recently allowed their first microtransaction of a cash purchase mount, banker, etc.. which was quite contrary to what they stated in the past as far as features in Rift.
4. Although they've closed servers off just like any other company does at launch due to the intial launchday rush, they continue to close more off as recently as last week.
5. They say they are "vastly profitable each week/month" without elaborating on the details and now are seeking an IPO.
I'm not saying Rift is in danger. I'm not saying Rift is about to die. What I am saying is Trion is running out of cash, and fast. This is what happened to CCP trying to make two games on the side while still running one, which is exactly what Rift is doing.
"TO MICHAEL!"
Its a good sign. Some are going to have to troll pretty hard to put this in a bad light.
Really? This game sucks and Im not having fun? Im going to unsub right now. Thanks for the tip.
I am not sure they are even remotely close to running out of cash. Even the most pessimistic guy will say Rift atleast sold 600k boxes. Now say that was at 50$ and this is not including the CE, but right there alone you have 30,000,000
The game has managed roughly 53 active servers medium/high for the past 7 months. Now say worst case scenario and the doubters are right and Rift only has 300k subs worldwide. That is still 300,000 * 15$ = 4.5mil for 7 months.
My personnel view is they broke even a very long time ago and every dime since then has been reinvested. See this is not B2P, so the money is not in the box. The money is in keeping the subs. That is how WoW became so popular because they practically gave the game away to everyone.
I'm in the "they are running out of cash" camp - and it's a bad sign. It would mean, if correct, that Rift is not profitable ENOUGH for their needs and wants, and that tends to end up badly for all involved.
If it's not correct, then hey, it's great for them, and I hope they build on their success.
Avatars are people too
Second, I think you're here to defend Rift which is not what this is about either. So this isn't for trolls or fanbois in that regard.
This is an OVERALL discussion of the company and how this affects it. You many not be aware but Trion has two more games to consider which they've already started on. This is more about the financial health of the company overall, not just Rift.
Trying to pay for two additional games while continually adding content to your main game is taxing and extremely expensive. It's clear that even if Rift does well it cannot in any way pay for two more games to be developed when you look at what is coming out soon for releases.
No one has to 'troll hard' to present a Devil's Advocate view based on the facts of the market right now.
"TO MICHAEL!"
Ignoring that your post is a big contradiction in itself. Where is your source for this info? since you sound very sure that Trion is running out of cash even though Rift is making them lots of proft and they announced to go Public.
And please don't tell me it is your opinion because it sounded as if you know some inside info that we don't.
Simple. They sold this to the venture capital guys as a WoW-killer. They were shooting for mass-market mega-success, not just with Rift, but they also sold their server technology as being state of the art and something they could sell to other companies.
Obviously, they did not provide anywhere near the return on invesment that they originally said they would. There game is in no way a mass-market success... they sold perhaps a million units total in more than 6 months, and more than half - probably three quarters - of those players are no longer subscribing.
They most likely ended up spending more money on Rift than they originally planned, and now don't have enough money left to keep the live team going and develop two other games at the same time. So they are thinking IPO as a way to sucker some more money out of public investors so they can keep the train rolling down the tracks for a while longer while they try to A) Get Rift to a state where it's worth playing for more than a month, and
release at least one other game which will be cheaper to support, but make them some cash.
There idea is likely going to fail. Investors are a little more focused on the bottom line and common sense than the fanboys who are still subscribing to the game in the hopes that it will improve. I'm doubting they'll raise enough money to offset the poor retention now that people have actually played their games, seen their server tech, and know what's behind all the marketing and hype.
Could be viewed as both good and bad, which depends on circumstances we don't know.
All I see is a company that has made one MMO, which is developing two additional MMOs, needs to raise some capital to bolster the development of their two new MMOs.
Honestly it's a better approach than CCP's "try to bleed the customers of your existing MMO of money to fund your new MMOs" approach, which obviously hasn't worked out too well for them.
I work for a very large private company that is beholden to our membership. Private companies imo generally do better if they stay private. Going public is a double edged sword between generated revenue and doing what it takes to make stockholders happy.
***Raises plunger in salute to trion!***
All my opinions are just that..opinions. If you like my opinions..coolness.If you dont like my opinion....I really dont care.
Playing: ESO, WOT, Smite, and Marvel Heroes
The game has managed roughly 53 active servers medium/high for the past 7 months. Now say worst case scenario and the doubters are right and Rift only has 300k subs worldwide. That is still 300,000 * 15$ = 4.5mil for 7 months.
My personnel view is they broke even a very long time ago and every dime since then has been reinvested. See this is not B2P, so the money is not in the box. The money is in keeping the subs. That is how WoW became so popular because they practically gave the game away to everyone.
The problem with what you're doing is compounded because you or I have no idea how many boxes Rift sold at a CERTAIN price. You can't just say "lets' assume X were CE's." Next, you don't know how much someone pays for a monthly sub on average because that's where the real money comes from. Is it $8 or is it $15? There are too many variables there Pure.
All we do know is their obvious expeditures. They have to pay for all their current servers. They have to pay for building costs, employee salaries (500 employees now they say and adding more), they have to pay for advertising and all the other related costs to Rift alone like R and D.
Now after they've paid all of that, they have to pay to develop two full-sized games, one of which was pushed back.
Then you look at the recent microtransaction with the spider mount. They SOLD that for $10 when there was no need to bring in another CE. Now if you want to assume something that we can both agree on I bet:
let's assume that Rift HAS 500K subs for the sake of argument. Let's assume on-third of those players liked the spider mount and bought it. That is roughly 166k spider mounts. At $10 a pop, your one-time revenue stream from those people is 1.6 million dollars.
Instead of putting that into the game as content to be earned it was sold. That says to me Trion realized it was a way to get CASH quick, which falls right in logic with them needing cash.
"TO MICHAEL!"
I'm not saying Rift is in danger. I'm not saying Rift is about to die. What I am saying is Trion is running out of cash, and fast. This is what happened to CCP trying to make two games on the side while still running one, which is exactly what Rift is doing.
Ignoring that your post is a big contradiction in itself. Where is your source for this info? since you sound very sure that Trion is running out of cash even though Rift is making them lots of proft and they announced to go Public.
And please don't tell me it is your opinion because it sounded as if you know some inside info that we don't.
First, I shouldn't have to preface a internet post with "this is my opinion". Most people know that already. But apparently since I have to do with you, running out of cash for two more games to produce is my OPINION. Now that's out of the way:
Enjoy the rest of the thread and see the reasons why. They've already been posted for you. Just read em.
"TO MICHAEL!"
I'm not saying Trion isn't making money, but this move doesn't seem like a good sign to me because who would want to report to shareholders if they didn't have to.
I'm no expert, but let's crunch some more numbers past the 4.5 million per month.
First there's corporate taxes. Again, no expert, but wikipedia says they're been 15-35% of revenue in the US. Let's go with 25%. So their net revenue is 3.375 million per month.
Salaries. Trion is estimated to have 200 employees according to telarapedia. Let's assume an average salary of 75k per year. That's 1.25 million per month.
Already we're down to 2.125 million revenue per month and we haven't even talked about insurance (could cost Trion 150k per month if they have an employer sponsored plan), equipment, servers, electricity, bandwidth, rent, travel. It's one thing to say these expenses are nothing when you're looking at an NCSoft report claiming 12 million in profit every month, not to see what profit is left over from a 2 million dollar pie.
"Gamers will no longer buy the argument that every MMO requires a subscription fee to offset server and bandwidth costs. It's not true you know it, and they know it." -Jeff Strain, co-founder of ArenaNet, 2007
It's as simple as:
Trion has one game that is paying for THREE games. That cannot continue to exist for a company like Trion. It's not EA. It's not Blizzard. It's not SoE. It's not Square Enix.
Those companies can have their main game pay for their other projects OR vice versa (smaller profitable projects paying for one large one). Trion is STILL paying for Rift's development alone. They don't even have half the stuff Rift needs yet (no expansion in sight) so how does Trion pay for TWO ADDITIONAL GAMES when they are burning through cash?
Then throw in TOR, GW2, TSW, ArcheAge, and any other PvP game I haven't listed yet or any other new FTP game coming out as well. Their best scenario is they are going to hold even. Their worst is they are going to lose subs. Their is no way to believe they will INCREASE subs given they are still closing off servers RIGHT NOW.
Rift won't die but the cash reserves they have aren't enough to sustain everything, this is why they need some kind of IPO move or take on more banker investments (which they probably don't want because the banker/investor route means you OWE bills vs the IPO route)
"TO MICHAEL!"
Well in a podcast from Scott Hartsman own mouth it was asked if they were working on a expansion and he said "Yes we are it is a benefit that you get when you have a highly successful game".
Obvious expansion for Rift is to take the battle to the planes because all we have been killing so far is the Avatars(shells) of the dragons that have been getting released.
It isn't a dot com, it's a game development company, part of the entertainment industry.
Over double that.
From the article:
This is the part people don't take into account which is what you said.
All they look at is "Subs cost X much, they have sold X boxes, and they make X money. The rest is pure profit!" lol
"TO MICHAEL!"
I agree that Rift is not "dying". My opinion is the game is holding around 300k subs atm which is good. I KNOW an expansion is "coming"; they have to put one in there based on what's in the game right now with the small zones. It's only been eight months I don't expect an expansion right now.
That's the point: they have to DEVELOP one which will take time and money. If they were just paying for RIFT alone, that would be an easy deal and a no-brainer. In fact, if Trion was making just one game (Rift) they'd be flush with cash imo. But they have two more games to push out as well they've already hyped and promised.
Now figure they are up to 500 employees and growing competition. You cannot keep expanding like that in this environment. In a way it's kind of stupid. The smart play would be to put most resources into Rift and weather the storm. Then after TOR, GW2, TSW release and lose buzz, you start to push out your other two titles. You don't continue to work on all that while your in a battle for cash.
The analyst said Trion needs to show their other TWO games are going to be successful to prove they are worthy of an IPO, and they haven't even launched yet or are near ready.
Again, this is NOT JUST ABOUT RIFT. I don't know how to explain that any clearer to Rift fans. This is a discussion about the company overall and how it's managing itself. It's why I didn't post it in the RIFT forums.
"TO MICHAEL!"