Welcome to Jester's Trek.
I'm your host, Jester. I've been an EVE Online player for about six years. One of my four mains is Ripard Teg, pictured at left. Sadly, I've succumbed to "bittervet" disease, but I'm wandering the New Eden landscape (and from time to time, the MMO landscape) in search of a cure.
You can follow along, if you want...

Monday, March 17, 2014

Derecognized

OK, CCP tossed a dung-bomb out there and I need to address it.

CCP's consolidated financial statement for 2013 is now very public. Here's the discussion thread at FHC. Look at it for more than about a minute and you're going to quickly discover that CCP lost about 21 million USD in 2013. This is very unusual for CCP, which has generally been a profitable company. What happened that caused them to take such a massive loss?

Look a little deeper and you'll find that the primary hit is on the assets side of the balance sheet, specifically in research and development, which took a massive hit between 2012 and 2013. You'll find that on page 5. Without that, CCP had a great year, bringing in about 10 million USD more revenue in 2013 compared to 2012. So what happened in R&D that caused a potential profit to turn into a massive loss?

Investigating that sends you to page 6, where you discover that retained earnings and development cost both took massive hits and that's the source of the loss. That sends you to notes 12 and 16, on pages 22 and 26, respectively.

On page 22, you'll find CCP taking a 21.4 million USD "derecognition" hit. The note for that says the following:
During the year the company assessed its capitalized development assets and determined that a portion of those assets would likely not have future economic benefits. IAS 38 requires that such assets should be derecognized and removed from the balance sheet. The expense related to the derecognized assets are presented as part of research and development expense in the statement of comprehensive income.
Translated into English: "We've decided that some of the code that we capitalized development costs for is no longer likely to be a future income source." As code goes from "something that a programmer is working on" to "something that's going to generate revenue for our business", you capitalize it, i.e. turn it into a capital asset that's going to generate revenue in future balance sheets. CCP is saying that the opposite is happening for some of their code.

Therefore, that same 21.4 million USD then disappears as an equity asset on page 26. This essentially "writes these costs off the books" and indicates that CCP no longer regards this code as a capitalized asset.

Do I know what's going on? Yes. Can I talk about it? No, the NDA prevents it. Do I think CCP was dumb dumb dumb to release their financials before making the appropriate announcements? YES. But I still can't talk about it.

However... search my blog for the word "capitalized" and you'll find this post. I will say nothing more, except that CCP's financial position is a lot more solid in 2014 than it was in 2011 when I wrote that.

Let's hope that CCP makes an actual announcement of their plans, and soon, shall we? Cripes.

87 comments:

  1. Replies
    1. My expectation, actually, is that they're going to cancel WOD:

      * CCP's been working on it for five years now, with no real game to show. They showed a few tech demos at Fanfest -- one was a dog and pony show of "what the game might look like", and the rest were demos of the content creation tools they had created for doing procedural environments.

      * DUST is already launched. And while DUST may be an unmitigated failure, it makes little sense for them to scrap something that's already launched and being actively played -- and that is actively integrated into Eve, as terrible as that integration currently is.

      * DUST is still creating some revenue for CCP via PS Store purchases, no matter how small that stream is. Incarna, on the other hand, didn't create any revenue for CCP -- the entire point of it was "we're going to use Eve as a guinea pig for this tech we developed for WoD."

      * A number of the recent CCP departures were employees known to be working on WOD.

      * The market climate for classic MMORPGs have turned pretty sour in the last couple years. You can count the surviving subscription MMOs on one hand -- WoW, Lineage 1/2, Eve, Second Life. Everything else has either converted to F2P (SWTOR, LOTRO, Rift, EQ2...), or launched as F2P from the beginning (Neverwinter, DCU...) or has shut down.

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    2. l2 has been f2p for a few years now. WoD wasnt going to be a "classic" MMO by the way u use classic in this reply I think u mean WoW clones tbh. WoW is not a classic MMO. It is a trash theme park fluke powered by marketing not game play. Givin CCPs inability to pick a winner id say u might be right. Dust was a Turd the whole time never should have been developed. If they would have spent all that time and money on WoD they would have their 2nd niche mmo making them profits. But Jester saying hes NDA on this makes me think that its got more to do with old code being used on tranquility. Old code that we all know needs rewritten.

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    3. We have a solid clue that WOD was at its core going to be at least more traditional that were were expecting. Hilmar pointed out in an interview recently that with DayZ Rust and games like that becoming so popular, sacking a lot of the WOD guys was a good thing because they were going to go back and relook at the core of the game. So now we know they are looking towards a DayZ 'spirit', which means they weren't looking at that before.

      You always need to remember Hilmars hardon for Microtransactions. If you always think in terms of microtransactions you know what he is thinking.

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    4. ========== below is pasted from an interview ========

      “The core dynamics of being human or vampire haven’t changed, but we’ve certainly been taking inspiration from a lot of recent things,” said Pétursson. ”For example, DayZ and Rust, which have shown us the power of a sandbox when you bring it into a more recognizable context.”

      “The creators of those experiences often reference EVE Online as an inspiration for their things. We’re now cross-inspired by what we’re seeing there. How the absence of all these structured game mechanics – by just allowing these natural interactions to happen – that is something we’re definitely incorporating into how we think about World of Darkness.”

      When I asked if World of Darkness was heading in a more survival-oriented direction, Pétursson was hesitant to make any promises. But his point was clear: CCP is watching DayZ, Rust, and their ilk, and World of Darkness is changing with the times.

      ==== got a better one, Jordan? i'm all ears =========

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    5. http://themittani.com/news/ccp-wod-will-take-cues-dayz-and-rust

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    6. what it looks like to me is they've not decided to scrap WoD but is a case of one step forward two steps back...they're deciding their WoD game can actually fit the lean and mean survival genre bill.

      sort of like the vampires/werewolves would be the 'zombies'?

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    7. Reading what Jester was alluding to. It is very clear that the 21.4 million dollar write off CCP is doing IS in fact Dust514. After all he gave us a Wink Wink Nudge Nudge look at this article talking about how much of a massive write-off it would be if Dust Fails.

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  2. So ... I assume CCP is scrapping Incarna as it is and will - once again - start anew?

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  3. World of Darkness just had its lights turned out,

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  4. So they are writing off old code that has been, or is currently being, refactored? Like say, scraping the old POS code and starting fresh? This would put the cost of a POS revamp at potentially around $US20mil.

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  5. Would be more likely its the old code from WOD/Incarna, now that they have stated they have a new vision of WOD (more survival-porn like)

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  6. I have no idea how to read these financial reports so please correct me if I'm wrong.
    On page 22:
    "Amortization of capitalized development cost in 2013 relates to EVE Online and DUST 514 while amortization in 2012 is almost exclusively due to EVE Online.
    Research and development (2013) 46,876,130 | (2012) 11,217,029"

    So without DUST then CCP would have made a profit of 10-15M assuming development costs for EVE stayed roughly the same in 2013 as in 2012?
    I assume it's not as simple as that, but I couldn't find any income numbers for DUST.

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    Replies
    1. No, it's not that simple. This code could've been written at any time. 95% of it could be EVE code, for you all know.

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  7. Would it be fair to say this is delayed fallout from the Incarna-era CCP? Ie, WoD finally getting the coffin nails hammered in?

    If that's the case then I can't say I'm terribly worried about it with regards to CCPs financial health. Those poor employees that end up on the losing end of this though, they have my sympathy.

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    1. The grunt level guys sure do have my sympathy. The higher ups not so much. They had a decent sized budget and 5 years and couldn't even get the basics of what the game was going to be done. They had their chance, now they need to be closed before they waste even more money

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  8. Feels like CCP is coming back to its core and rebasing its expectations on some of its non-Eve projects or even completely writing them off. Eve online is a fantastically profitable and cash generative franchise, perhaps struggles to grow at time - I suspect CCP have been looking for places to deploy that cash but so far no luck.

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    1. They could always hire a big group of Devs and set them to work on sorting out the horrid mess the code is in. Hire 100 people for a year or two to do nothing but fix code/update code/ migrate code.

      Currently it takes CCP an age to do something because the code is a mess. Imagine if it were fixed, ohhhhhhh yeaaaaaaaa.

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    2. Code can be fixed but I have a feeling it being a mess is more about how intricate the system is rather than being messy as per bad programming practices.

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    3. Um.... no. As is true with most things in life, "Hire 100 people for a year" is much more complex than you appear to think. Leaving aside the problem of "where are you going to get that many competent programmers?", you run into training costs and "where are they going to do their integration testing?"

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  9. They should take the assets and code that was previously invested, open a crowd funding stream for R&D, and fund Incarna and a pc version of Dust. I'd still love to see this vision fully realized, and I would think others would as well.

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  10. I think people aren't thinking big enough here. Did CCP really valued the code for POSes, or WoD or Incarna at 20 millions? That seems like a bit much (but maybe I'm wrong).

    If I was to speculate, I would say that this 20 million is something bigger. Something "guts and bones". What would that be? Well... perhaps were are stepping away from single threading, thus enabling multi-cores? That would require a lot of coding, and would be pretty big news...

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    1. That would be a big thing. But, as long as the old code is in use, it's still generating revenue. So it can't be removed from the books.

      Though accounting catching up to removed legacy code does make sense. Possibly lots of little bits of code, not one big one.

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    2. Some napkin maths:

      If you look at the balance sheet you can see that CCP capitalizes about 2/3 of its R&D expenses, 20m in writeoffs means 30m in dev wages.

      The average CCP employee costs the company $93k/year, so $20m in capitalized code means ~322 man years worth of work.

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  11. I do think this means that WoD has gone from being released at 2025 to being never released. So, I shall rub Soothing Sensations Olive Oil (only available at certain resorts) on me, sit on the inflatable captain's chair and mourn for the loss of the two bonus maps.

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  12. Yeah, this all seems related to World of Darkness and dumping all of the assets they've worked years on.

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    1. hilarious. so a company can put speculative future profit on the books as current actual profit? lol. ah, RL. hehe

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    2. its not profit its an asset. They spent 20mil developing this asset thats why its on the assets side. They didnt lose 20mil in profit they lost 20mil by stopping the use of this code(the code is valued as an asset worth 21.5mil USD).........IMO not WoD and i seriously doubt its about dust this has to do with legacy code on tranquility. thats why jester knows whats going on. Why would he even have a clue about it if it had to do with WoD or DUST? idk maybe CCP just tells the CSM/CPM about all their future projects not just ones having to do with the game they are elected to represent. I mean honestly would an accountant value future code that's not producing any profit for the company at 20mil? just seems to me that to be worth 20mil code would have to be proven profitable in someway.

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    3. Accounting time for MinorFreak. A core principle of accounting is matching revenue and costs. There are a lot of rules designed to do it, and capitalizing development costs is one of them. Mechanically, all that happens is you spend cash this period but you don't show an expense on your income statement until a future period (hopefully the one with revenue).

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    4. I'm no accounting expert, but I'm not sure they can dump EVE legacy code as an asset when they are still using that legacy code.

      Or, maybe it's a bunch of internal dev tools they no longer use or have been redeveloping.

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  13. Well there are some cool things about imparment and naming things outdated. So my take is this is a veriation on several concepts. My gut reaction is tax's, followed by showing stakeholders (yes that includes us eve players) that a company is well run, run well enough to recognize a money and pit and having the guts to pull the plug. WOD/Dust I don't know. But this does show that futur resources will be availible for working projects (weather that is WOD/ Valkrie or perhaps a revamp of EVE who knows). I am leaning twords a shift to valkrie, along with either Brain in a box, or new code for eve. So I hate financicals they say alot without trying to say anything specific. prospectus plus the financials would be where I would start.

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  14. hands up how many shareholders are in the audience?

    *crickets*

    for game which espouses HTFU - I surrounded by hand wringing whingers who need a daily cause to cry over. and to all the tossers that would rather have game without so called bears or any other variant of supposed non-conformance to YOUR play preference. this storm in a tea cup is why you get told that every sub is precious.

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  15. The 21mil is not Incarna related. That would be a ludicrous amount to spend on walking in stations pre-riots.

    It is either DUST 514 or WoD related. Given that EvE's player representatives have been made privy to this, the obvious choice is DUST 514 as this has an impact on EvE. DUST is not making money and is just barely covering running costs, so the development cost that has been written off. Implied in this is that the code base will never make CCP money. Make of that what you will.

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    1. Read my post below, they spent 5 years developing it, first as Ambulation which was scrapped, then as Incarna, whose ingame content may be scrapped too (the CQs haven't been updated since Crucible). And those 21 million are a mix of development + potential revenue.

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    2. I sincerely hope you are wrong. Whoever thought it wise to spend so much on such folly should be sacked if they haven't left already.

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    3. Well, they did make new player spawning into the CQ random recently to see how many people stuck with it, or showed any interest in it.

      If the numbers come back and say, hangar view FTW, then they could very well be writing down Incarna. That would be sad, because my opinion of the CQ has nothing to do with my opinion of EVE avatar gameplay.

      It wouldn't surprise me if development was $21M over 5 years, honestly. Their development practices were terrible by their own admission, and they lost the plot and threw money at virtual high fashion and all kinds of strange other things.

      All that said, it /also/ wouldn't surprise me if this is CCP adjusting DUST514 down from "it'll be a hit out of the gate!" to "we're in for a long slog." Heck, it might even be both.

      I'm not sure about WoD. It seems like a black box to me.

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  16. Well...

    They still talked about WoD back in January.
    DUST is already done and they can keep throwing the bad money behind the good money for it...
    This leaves us with Incarna legacy code and assets i.e. existing avatar content.

    Could it be worth 20 million USD in development and future revenue? Maybe. They worked on it for 5 years, if we account Ambulation + Incarna development cycles.

    So to me it sounds as if the CQ and ingame avatar content were about to become officially dead.

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  17. given that you have included Valkyrie as a label and not in the text is an interesting observation. freudian or NDA workaround?

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    1. I almost tagged the post just "CCP" and nothing else. That's actually somewhat more accurate, but some people only read the posts tagged "EVE Online". Once I added that, I had to add everything.

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  18. Uh-oh. this looks very much like a maneuver used to clean the slate before a buyout...

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    1. If they were to get bought out I bet 1B on EA. They have been hiring old EA guys as fast as Riot have been trying to hire CCP Devs.

      And Hilmars love of Microtransactions is only riveld by EAs

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    2. I would kind of doubt the bought out ideas really. CCP seems to proud of being an independent developer to just easily sell out to EA.

      I mean CCP could always just try to go public first and if that fails, go ahead and sell out to EA.

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    3. dunno about independent. that icelandic billionaire owns it pretty much lock, stock & barrel. I think he went kinda bankrupt and russian interests stepped in.

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  19. Hmm, I think WoD is burried. CCP realized that it would be cheaper, to buy the last 2 fans of vampyre-settings a balloon and an Edward-lunchbox from a yard sale.

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    1. Your comment is funny. The fact is WoD has a fan base, this is bigger than vampires and Twilight and you thinking this is about the Twilight-tards getting a game is funny. WoD hasn't even been released yet, Dust has. They are falling on their face with Dust, you can't say WoD was a bad economic choice if they have yet to release it. Plus the fans of WoD RPG are still burning strong for this game, myself included.

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  20. Oh, Dust. That much a failure on consoles?
    So we get it now on PC, sounds fine to me, very fine indeed, I am looking forward to play and pay it.

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  21. So Jester, as a betting man, what is your over/under on when CCP will be making an announcement?

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    1. I am not Jester, but I would say they will make the announcement too late.

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  22. Could it possibly be related to walking in stations and deciding to totally junk the ideas and work they did so far?

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  23. I think it is a combination of writing of "old code" and investing in a new FIFTH project, Jon Lander (CCP Unifex) is working on, and we will hear about crest and mobile development around fanfest. You got to know how the hoger echelon ccp management thinks, they like these little moments in the spotlights and press, aka peer group status.

    "The Company completed a reorganization in 2013, which results in a greater focus and an increased independence of each of our FIVE main projects"

    Source: http://www.ccpgames.com/media/47894/ccp_hf_financial_statements_december_31_2013.pdf

    Regards, a Freelancer

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    Replies
    1. Ah the old code that got written of in the books is probably called: Dogma.

      http://www.youtube.com/watch?v=UcEUB6h4Br0#t=3m53s

      As a part of the brain in the box project since 2012, it had to be totally redone.
      For skills to be applied to your ship and character, the current process is very inefficient, that causes very high load on the servers when large amount of capsuleers are in a system or even duke it out.

      Regards, a Freelancer

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  24. Well the statement says in 2012 amortization of 11 million was due to EVE online only, then in 2013 amortization of 46.8 million was due to EVE online and Dust.

    So I imagine that dust is gonna go bye bye.

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    1. It doesn't mean they are closing Dust, its just Dust isn't worth as much as they thought it was.

      Think of it like this. I spend 5 years buying $4M worth of cars each year (think dev costs) After 5 years I say I own $20M in cars. So I have an asset of $20M. Thing is I am crap at looking after cars and have left them out in the rain with the tops down. Once I realise this I know I no longer own $20M worth of cars to I write off some or all of their value from my assets.

      CCP still have the Dust code or whatever and the can still use it. It just means the code ain't worth as much as they thought.

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    2. Yeah I just feel bad that the company isn't paying out a dividend this year, probably based on how bad DUST did. Means CCP employees aren't gonna get a bonus this year, if they are holding stock.

      Maybe next year they will get a small bonus from DUST though.

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    3. Ah, I read more and the stock options for employees don't give them the rights to dividend payments and voting.

      Suppose the normal investors and CEO will be annoyed by DUST's losses.

      Also, CCP has a derivative agreement with the people that gave them a loan, for those people to buy stock instead of holding the corporate bond they purchased. Suppose not too many of them are gonna give that derivative agreement a go this year at least.

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    4. CCP paid a dividend in none of the years we have financials for (i.e. ever sicne 2008).

      Their goal is still to grow the company, not to let it stagnate.

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  25. That amortization explanation comes from the bottom of page 23 of the report.

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  26. Looks like they're essentially saying: 'no, DUST 514 is not making money and we don't expect it to make money in a financially sensible future".

    That doesn't means that they're pulling the plug of DUST, though. Just that they can't say with a straight face that it's gonna make any money.

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  27. A former CCP employee wrote into Giantbomb's podcast last week and said WoD was being canned. Interesting to see it being validated in these financials.

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    Replies
    1. Jester knows what it is but can't tell us (nda) so it probably is eve related

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    2. Were that true then one could assume CCP would have already said such and not make reference to DayZ and RUST... how do they benefit from keeping it a secret and why would they have a place holder for something to be held at FanFest 2014?

      Honestly if you can give me a reason I'd be more likely to believe WoDO is in fact Dead. Vaporwar. Nail in the Coffin. Black Curtain... so on and so forth.

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    3. canned not rethought for a Zday clone? hmmmm...that would make more sense actually, especially if they don't bother to announce anything. (like another recent commentor said, "why post bad news?"

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  28. Furthermore, why would Jester write that they better make an announcement soon if it was just to scrap something? "I was thinking of letting my subscription lapse but now that WoD is cancelled I'm definitely sticking around!!" That is nonsense. Something big, guts and bones, is coming, replacing something old that isn't working well.

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    1. If a company is going to take a large financial hit in a report such as this, they announce why. It's as simple as that. And usually the announcement comes long before the financial report.

      Look at GM with their recalls this past week as an example. They announced the recalls, then mentioned that they were going to take a 300 million USD or so to pay for them. LATER, we'll see that hit reflected in their books.

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    2. CCP is a private company, so they think differently. They likely informed their investors ahead of time, but they are under no obligation to inform the public. And CCP is likely afraid what a big announcement such as "We're canning DUST!" might have on EVE's bottom line. Plus, if it is DUST related, they've recently been running contests and such, trying to bleed every last penny from their current customers.

      GM, on the other hand, is a publicly traded company. It only makes sense to announce ahead of time, so that there's no financial shock and big dip in share prices.

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    3. Lest remember that CCP as a company feels an urge to continuously reinvent the wheel, preferably without any curved lines in it... so there's the Right Way, the Wrong Way, and the CCP Way to doing things.

      Also, IIRC, Hilmar is a software developer with no formal studies in business administration. BScs in CEO roles are not uncommon, but they often set up companies for a exciting ride...

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    4. Hilmar definitely wants to be remembered as a visionary. Although his visionary ideas are somewhat lame. Sending a model of a pod up into the stratosphere. A monument with an outdated "time capsule." Bringing actual visionaries to Fanfest. And he has a lot of pie in the sky ideas about EVE becoming a true economic force in the world.

      He's talked about how silly our own economy is (people buying white iPads when they already own perfectly functional black iPads), yet at the same time trying to sell virtual ship paint jobs to his own customers.

      Sometimes I think Hilmar may be mildly bipolar, because he jumps from idea to idea far more quickly than those ideas can be properly realized.

      Delete
    5. Wow.

      Just... wow.

      Then again, if anyone was going hand out bipolar diagnosis...

      Delete
  29. He's talking about Dust. I'm not even sure how this is not disclosure.
    I hope WoD is cancelled or they haven't learned anything from Dust.

    Dust was in competition with long running FPS games. The main reason you would play it over the others was Eve, but they made it very difficult for an Eve person to play with a friend or even help them.
    Why would they repeat that with WoD. Valkyrie may be able to sell because of the Occulus, but WoD is going to need something more than being a Dayz/Rust competitor. What would make me, an eve player, or my friends want to play Dust or WoD over CoD or Dayz/Rust. I'm really hoping CCP already understands this.

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    1. He's specifically quoting publicly-released information, and then linking to PREVIOUS publicly-released information on the exact same topic. It might be a bit fuzzy, but he's not over the NDA line.

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    2. Honestly if you/your friends have never had an interest in World of Darkness VtM then you/your friends will not. And like EVE, WoD will not be for everyone and I believe most WoD fans would rather it that way. The simple fact CCP had said WoD will have Perma-Death could easily be a segue for other mmo-players to try it out... yes even possibly EVE players who love PvP and those who like to see how they help shape the world.

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    3. They are investing actual money in "vampire simulator" and mmo perma death...
      The draw of vampires comes from wanting to live forever, which doesn't matter in a video game. Perma death is great for hardcore people, but it's just frustrating for the rest of us. If WoD is just for people who already play it, it won't be hard to figure out what to charge for it. 20Mil / 22k likes on facebook would give $910 per person. FB likes isn't a great metric but even if 22k is 10% of the players that's $91, and that's assuming they only spend the same amount of effort as they did on Dust.

      Delete
    4. A) Its not really a Vamp sim.. might wanna take the time to look into the lore of the game before posting. And perhaps even look into the shear number of fans/VtM groups that are still active outside the WoDO community.
      B) Lets say you're correct about the "but even if 22k is 10%" that would suggest WoD would start with 220,000 subs. How many subs did EVE "start" off with?

      As to the perma-death, if you knew more about the lore and some statements made by CCP, you would see its not something that will happen often. I believe there was more to it but I refuse to search that info down. Say the game itself goes for $59.99 USD and the sub is 14.99 a month. Just from the starting sub, your looking at roughly $13,200,000 USD before sub fee.

      Either way I think its worth it. But I'm biased due to being a fan.

      Delete
  30. What I find hilarious is that the outcry over Incarna backfired. To me, walking in stations was the first step in expanding Eve toward walking elsewhere, including planets, and then fighting on planets. I think some eve players or new players would have enjoyed exploring planets and fighting on them. I don't think "Planet Interaction" was what anyone was hoping for.

    Instead of letting people who want something besides what Eve offers play with people in Eve, CCP said, "OK we'll just make a different game and interaction will be limited."

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    1. ehmmm...Aural (sp?) microtransactions were the apparent heart and soul of walking around in stations. They'd hired a huge staff in anticipation of the greed™
      I'd rather chuck the baby out with the bathwater than deal with some yahoo CEO thinking the Far East's pay to win formula was going to win win win in western mmogs.

      Besides, there's no way i'm walking around a station when corporate BPO lockdowns are bugged to hell and beyond, Skill history is only a couple dozen entries long, Duel popups in starter systems, the list could go bloody on and on.

      Oh, yes you say, things would trickle down once Hilmar is wading drunk through iskies and eve would get 'fixed'
      lololol

      Delete
    2. Point was, they did it anyway, only now we have nothing to show for it, and we're paying for the failure anyway.

      Microtransactions failed to provide return on investment for Dust, big surprise. If the side project had been incorporated into Eve, we still would've had 20 million worth of extra stuff in Eve even after finding that out. More stuff could've meant more players, and at least CCP would've had something to add to later.

      Delete
    3. Gah, people are so stupid. CCP didn't lose 20mil in cash. They wrote off an investment that they valued at 20mil (and paid taxes on that value while it was on thier books). They don't expect to make money on that investment and so are now writing it off.

      Additionally, where do you get off suggesting that DUST has failed on microtransactions. While CCP, like most gaming companies, doesn't often publish thier income on particular product lines I will tell you for a FACT that DUST is making CCP money.

      Is the amount of money DUST is making CCP more than the amount they've invested? Probably not yet but that would be a true statement for most games (especially F2P games) 1 year post launch.

      Don't get me wrong - DUST is a mess. But it's certainly not a mess bringing in no money. DUST is making CCP money. And for this reason it is NOT the 20mil write off.

      That would be code base for World of Darkness.

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  31. WoD was put into permanent "on hold" a long time ago, pending finding someone to invest in it (no luck thus far). So, WoD really has nothing to do with it.

    DUST, while losing money (yes, there is a revenue stream from micro-transactions; no, it isn't sufficient to offset ongoing development, maintenance and support costs), also has nothing to do with it.

    This is just creative accounting. By taking certain "unprofitable" assets off the books as an expense, CCP was able to offset their revenue, which reduces their tax burden, which in turn preserves their much-needed cash.

    CCP might be profitable on the books, but they always have cash problems.

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  32. That's a possibility. Didn't they say they were trying to develop tools used in world/scene rendering that could replace the older EVE toolkits? Might not be an accurate memory.

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  33. Personally I think the fact that it was research and development code indicates that it's definitely not Dust 514.

    Maybe Incarna related as even if the code for multi avatar environments exists, the fact that its not been used means they can't derive income from it.

    The de-recognised asset could even represent something been taken back to the drawing board.

    Also given that it is research and development it could be related to something that had not been announced. R&D is where they develop stuff to give them a competitive edge. Most of what happens would be under an NDA.

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  34. EVE-Online is going to be closed.

    So long and thanks for the fish!






    But before the world ends:
    Can I have your stuff? :-)

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  35. Actually I think it is CARBON they are writing off. Not the whole engine mind you, just the forecasted 3rd party licences that never came to be.

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  36. Or... they made a profit, but they want to claim a loss for tax purposes, so they bundle up some sacrificial code-lambs to make sure the 2013 "net" shows up as red ink.

    There may have been no press release because this isn't "news", just crafty bookkeeping.

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  37. My tip is they are dumping a whole bunch of PS3 development not yet released as they are going to drop PS3 much, much sooner than they planned.

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  38. My bet goes on... DUST:

    PC/PS4 port getting scrapped.

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  39. Im gonna go out on a limb here and say dust and wod combined are not currently worth 20mil. I also think its funny that eve players are saying wod can't make money cuz its niche. Im sorry $4mil a year profit is nothing to sneeze at. WoD will easily have a larger audience than eve. That ip has been making money for a very long time. Longer than eve. As far as im concerned ccp should ONLY make niche mmos.

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