Paragon Studios was unprofitable – City of Heroes had to close say NCSoft

City of Heroes

There’s has been somewhat of a mystery surrounding the Paragon Studios and their popular superhero MMO City of Heroes which closed down last November. Was it profitable? Did it really need to shut down? Did NCSoft look for a buyer? According to an anonymous source speaking to MMORPG, the game was profitable, even when it moved to the free to play model.

Commenting on the source’s figures, NCsoft’s Director of Corporate Communications, Lincoln Davis, disagreed with the source stating :

” The studio was unprofitable before the shutdown. Both NCSOFT and Paragon Studios were incredibly proud of the transition of City of Heroes to a Free to Play business model, but unfortunately it wasn’t enough to support the studio’s needs. We made the difficult decision to close Paragon Studios and sunset City of Heroes because the franchise no longer aligned with the long term profitability goals for the company.”

There was never any real comment from NCSoft with regards to selling the game on but it appears they were looking for a buyer. NCSoft’s Davis added:

 “While we looked to sell the franchise multiple times, we were unsuccessful in finding a suitable partner that we thought would support City of Heroes’ fans in a manner they were accustomed to for years to come. Closing a studio and sun setting a beloved franchise is never an easy thing to do for the publisher, the developer or the fans. This was not an easy decision to make.

Reading between the lines, with an ever more competitive MMO market, NCSoft decided to pull the plug before the game started to lose money as players moved on to other newer titles.

CoH fans will have to keep their eyes on Heroes and Villains and the Phoenix Project which are the two community driven projects to create a new superhero MMO.

Source:  MMORPG

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  • The Quinch

    First, I very much appreciate the anonymous employee coming forward with this information. Most of it had been uncovered previously, but it’s still encouraging to have it confirmed. But far more importantly, I’d like to thank NCsoft’s Director of Corporate Communications, Lincoln Davis, for taking the time to step forward and provide open, straightforward reasons for CoH’s closure that have been debunked for months.

    Allow me to address them individually.

    “The operating cost, annual revenue figures and other financial information shared by this anonymous source are simply wrong.”

    While I’m not privy to Paragon’s operating costs, the revenue figures are corroborated by NCsoft’s own quarterly revenue reports – so either the claim is not wrong, or NCsoft had been falsifying their own financials regarding the game – take your pick.

    “The studio was unprofitable before the shutdown.”

    Interestingly enough, in each of its previous closures, NCsoft had openly cited lack of income and interest as the primary cause for the shutdown. CoH was written off with an uninformative “realignment of company focus and publishing support”. There are two possibilities at play;

    1} Was CoH as a game unprofitable? A glance at the revenue reports, as well as the game’s own population numbers disproves that theory – income-wise, the game had the equivalent of sixty thousand subscribers, a solid population by any standard.

    2} Was CoH as a game profitable, but the studio’s side project ran it in the red? If that was the case, then the problem could have been solved by simply axing the said project and the associated costs, rather than eliminating the entire revenue stream.

    “While we looked to sell the franchise multiple times, we were unsuccessful in finding a suitable partner that we thought would support City of Heroes’ fans in a manner they were accustomed to for years to come.”

    To begin with, what NCsoft neglected to mention was the fact that in the months leading up to the shutdown, Paragon Studios had been negotiating with NCsoft to buy the studio out. So if the game’s own developers weren’t considered to be fitting custodians, I would very much like to hear who would. A clear list of requirements for the prospective buyers would only help all parties involved, if what mr. Davis says about NCsoft’s wish to find a suitable partner still holds.

  • Lackey

    Ask yourself this, because you never step wrong when you “follow the money.”

    Who stands to gain, and who stands to lose, by lying?

    On the one hand, we have former Paragoners, who have always been honest with us, and who have always listened to us. Most of whom finally have found new jobs, and thus have nothing to gain or lose by telling us the truth as long as their identity is protected. And who would not need their identity protected if what they had to say corroborated and was in lockstep with NCsoft’s claims the game and Paragon Studios were losing money. They stand to gain NOTHING by lying. If they are actually proved to be lying, they lose their reputations.

    On the other hand, we have NCSoft, which has a history of outright lying, betrayal, and simple deceit that has gone on from the time they entered the US marketplace. Killing five MMOs, including Dungeon Runners and Auto Assault which both tried to buy themselves out and were shot down, and Tabula Rasa, in the process of which they created a fake “farewell letter” supposedly from Richard Garriott, while the man was in outer space. They stand to gain EVERYTHING by lying, as long as a few more people believe them. And if it is proved they are lying, they lose nothing, as their reputation in the West is already shot and bleeding out.

    I know who I trust.

    • the former creators of CoH are worse btw, they don’t only ly, they love to use excuses to save face while ignoring the real problem.
      NCsoft is for now still better of, they are not perfect but they have a reputation of publishing games that changes the view of games.

      i don’t know how much you despise NCsoft and honestly, i see no reason to but till this day they are not as bad as you might think they are.
      no company is perfect, not even the most respectful ones but i rather look at it from 2 ways then bland hating a company unless they really deserve it. (like crypshit)

      • rj

        “… they love to use excuses to save face while ignoring the real problem?”

        And you say this based on what? I can see from your previous postings that you’re almost always (and by almost always, I mean – never a negative comment for them…) a fan of NCSoft, and have hatred for all things not done by NCSoft.

        Not sure how Cryptic got pulled into things but … sure… under Cryptic’s tenure at CoH I never had an issue, and I found them to be actually very much in contact with the fan base and communicated with us directly. Often times they’d say things which, NCSoft wasn’t a fan of … in fact I really wish NCSoft hadn’t deleted the City of Heroes forums – because you could actually see where they had been very much in touch with the fans.
        This, is of course, completely contrary to NCSoft which – ignored them, and have lied repeatedly. And, btw, I’m sure the statements made about Paragon and CoH’s costs… will be of interest to investors. Because the numbers the NCSoft rep here is giving… don’t match up with those they just issued in their reports to investors.
        So … when it comes to lying… I’m going to hand that over to NCSoft.

        Your statements are based out of either being a troll who hasn’t checked into the facts – or you’re a paid wonk for NCSoft, because no one has ever accused Paragon Studio – – ever — of making excuses to save face.
        NCSoft has a reputation with games alright but it’s not as being a game changer, unless by game change you mean ‘game killer’. That’s pretty much NCSoft’s big contribution to gaming. CoH wasn’t actually NCSoft’s brain child – and neither was Guild Wars. Both of those came from studios that NCSoft bought. NCSoft’s reputation is to find an upcoming title, buy into it – buy it, and then kill it. Don’t doubt me – just look up their history it’s right there – look it up yourself.

    • ThatGuy

      I remember this, Richard sued them for what 24 million for what they did. The moment he went to space they immediately went to shutting down TR. After they promised a large upcoming patch to the game, and then they offered all subscribers a 30 day sub to any of there other games as a sorry for shutting down TR.

      Reminds me what EA did to Earth and Beyond MMO, where someone mentioned it to closely coincided with the fact EA needed more servers for there XBox upcoming titles for online play. But not sure how true that is, other than rumors really.