The 5 year trend shows increase in stock price at the release of Neverwinter from beta, Mod 2, Mod 3 and Mod 4. However, during the release of Mod 5 (early Nov 2014), the stock price was in decline, and the quarterly report released on Nov 25th confirmed what was already known, an overall profit margin decline for PWE, Inc.
The uptick in price on January 2nd was not related to any release software or improvements, but the CEO buying back about 450k shares outstanding. So, investors jumped at the buy, even though the trend shows a decline in profit margin. The trend in the stock price since January 2nd has been consistently downward.
The delay from March 17th to April 7th effectively pushes the mod 6 release into Fiscal Year 2015's second quarter. A directive from PWE may have been given to subsidiaries to increase profit margin by reducing operating costs for FY 2015 first quarter. What this means practically is firing people to boost profit margins.
Anyway, it is a short term solution to the long term problem of declining profitability. Sorry to all the devs who lost their jobs!
Yup. That article was swimming around here for a while, I was hoping this would mean positive changes for the company and I guess that is yet to be seen long term since I know they ARE actively hiring so they may replace SOME if revenues increase again.
I think its clear if he is willing to invest and now I think owns the company outright (or close to it) so clearly he firmly believes in the company and wants to make it profitable. If that means the game gets sold off, or invested in who knows. I doubt it will turn into a "management" game where they just keep it kicking for several years. But who knows.
As someone who works for 10+ years as a "dev" (not at cryptic but in software field), I'll share something:
Layoffs happen, the reasons are many and not really related to bad performance of certain employees. If an employee is bad, he'll get fired on the spot. Those kind of layoffs happen for strategic reasons, or to cut costs. The former means, Cryptic is focusing on other projects and the fired stuff isn't needed anymore. The later... well it usually means the company is in deep **** and cutting flesh. Both options are bad for Neverwinter.
As for the people who lost this job: This is a dynamic market, people move from one company to another all the time. My career "record" was 2 years at the same place, and I was fired only once. I'm sure they will find a good workplace, and very soon. And maybe some of them even had other jobs lined up already and were jut waiting for an layoff.
Anyway life moves on.
I hope I helped someone get an idea of how thing work in the industry.
Best wishes to the people who'll be looking for new jobs, and for Nevernwiter.
As someone who works for 10+ years as a "dev" (not at cryptic but in software field), I'll share something:
Layoffs happen, the reasons are many and not really related to bad performance of certain employees. If an employee is bad, he'll get fired on the spot. Those kind of layoffs happen for strategic reasons, or to cut costs. The former means, Cryptic is focusing on other projects and the fired stuff isn't needed anymore. The later... well it usually means the company is in deep **** and cutting flesh. Both options are bad for Neverwinter.
As for the people who lost this job: This is a dynamic market, people move from one company to another all the time. My career "record" was 2 years at the same place, and I was fired only once. I'm sure they will find a good workplace, and very soon. And maybe some of them even had other jobs lined up already and were jut waiting for an layoff.
Anyway life moves on.
I hope I helped someone get an idea of how thing work in the industry.
Best wishes to the people who'll be looking for new jobs, and for Nevernwiter.
I think given the nature of the share repurchase from the CEO, while it may have been to boost profitability, I do HIGHLY doubt a massive investment of hundred of millions into PWE to just let parts of the company go stagnant. This is all speculation but it is most definitely attributed to the profits of Cryptic. Now what remains to be seen are what happens next.
Either this game, they will "cut losses" and decide to just maintain it with no real investment and look to something new (currently in development) OR this was a "trim the fat" type of move, cutting costs between modules since 6 is about to release and they will beef up areas where needed.
Even a healthy business goes through ebs and flows of the cycle and both hires and fires people when at first it doesnt make sense.
I do see some openings on the website, which may be for something else and NOT neverwinter, OR as I said before, it could be a timing thing and they will re-hire where needed and I think there is atleast a fair chance this game will continue to get some attention. Im not sure when the license is up for them to use DnD but as long as this remains the newest DnD game on the market there will be a popular audience for it.
A very nice offer and I hope they'll take it. But don't expect too much. I've offered them a similar service when a major security issue came to light at the end of last year -which I won't outline here- and sent the offer to a few people above Customer Service level as well as Support, the CM and a few PWE managers. Only one person bothered to reply.
Bottom line is, company policy dictates they don't accept outside help from their clients on internal matters, no matter how right that person is. I do hope they'll take you up on your offer though. Worst case they learn a different way of doing things, best case it can save the game.
Thats unfortunate. I doubt it will happen as well, but its worth a try
Oh and I forgot to add to my recent post- given the investment into the console space, I am HOPING that this means more development for Neverwinter. I think the PC version is almost like a BETA test for Console version seeing as Neverwinter would be one of the first MMOs for Console.
Its also got a fantastic combat system that plays well there too, So I strongly suspect that we will see changes first, then as they fine tune it, it will hit console.
Again, who knows, its all speculation for all I know module 7 could be done already and they are just rolling things out as they make revisions to plans.
I forget the term for it, but I think Cryptic uses more of a "push" model where there is little development in the works until they announce a new module then its an all out dash to get the most content completed as fast as possible. They probably rotate devs to other games in the meantime and maintain with a skeleton crew for small updates until another module then a big rush again. (there is a more technical term for it).
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ironzerg79Member, Neverwinter Moderator, NW M9 PlaytestPosts: 4,942Arc User
The 5 year trend shows increase in stock price at the release of Neverwinter from beta, Mod 2, Mod 3 and Mod 4. However, during the release of Mod 5 (early Nov 2014), the stock price was in decline, and the quarterly report released on Nov 25th confirmed what was already known, an overall profit margin decline for PWE, Inc.
Just throwing this out there, but there's all kinds of reason for declines in profits. If you actually read the report that link is from, here's the recommendation:
RECOMMENDATION
We rate PERFECT WORLD CO LTD (PWRD) a BUY. This is driven by several positive factors, which we believe
should have a greater impact than any weaknesses, and should give investors a better performance
opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its
robust revenue growth, largely solid financial position with reasonable debt levels by most measures,
reasonable valuation levels, expanding profit margins and notable return on equity. We feel these strengths
outweigh the fact that the company has had sub par growth in net income.
The reason Revenue was up but profits were down was because PWE was making significant investments in R&D, marketing and launching new products during Q3 and Q4 of last year, which is an investment, not an expense. The hope (and as shown by the recommendation in the report you linked but didn't read) is that PWE will see significant returns on those investments in 2015.
So it's very possible that these layoffs are part of a bigger restructuring at PWE as it continues to grow. It's not uncommon for companies to eliminate positions in one place, while adding positions in others.4
If its a money thing, buy some Zen. If every player pulled out a credit card and spent 10$ on the game, it would make quite a nice chunk of money. I plan too one of these days. I wouldn't mind paying $7.99 for Mod 6 considering how much people raved about it.
The problem is, as many of us have been saying, is that the $10 purchases don't do much to advance your character, even if done every single payday. It is the hundreds of dollars at a time that will advance your character significantly. This is a serious problem indicating faulty underlying business model. That large of a layoff indicates systemic fail more than incompetence on an individual level.
Hate to hear that people were laid off. I wish them the best of luck in their lives and careers. That said, from a purely objective standpoint as a player, this is no surprise. I have been saying for several months that this game and business are failing and exactly why they are failing. This latest news is only further indication. It sucks. I like this game and really wish things were the way they need to be for us as players and more importantly, for those devs to have kept their jobs.
ironzerg79Member, Neverwinter Moderator, NW M9 PlaytestPosts: 4,942Arc User
edited March 2015
Facts first. Revenue is up. Profits are down. That's because they spent more money than they took in. Spending money isn't a bad thing, particularly when the analysts are saying the PWE has a very strong and healthy balance sheet, which means they can invest (spend) money without necessarily having to make a profit.
Second, they "start firing people left, right and center"...that's crazy hyperbole there. In total 14% of people from Cryptic lost their jobs, and only half of that was dedicated to Neverwinter. Not 24%.
As far as that "being a lot of manpower", that's totally subjective.
And then you start diving deep into conspiracy theory territory with that last bit. I know it's not as exciting as you want, but sometimes the simplest solution is the right one. And to say that "it makes a lot of players very uneasy about the future of the game", I've been hearing that on this forum for two years now...can you at least try to be a little creative with the doomsaying?
Sorry to hear about this...Hopefully they will get hired in another company soon,so that they can continue their career on the field.Cryptic might be a small team,but pretty much everyone we got to know on the forums and on livestreams seemed very nice and passionate about their work.Good luck guys.
Comments
Yup. That article was swimming around here for a while, I was hoping this would mean positive changes for the company and I guess that is yet to be seen long term since I know they ARE actively hiring so they may replace SOME if revenues increase again.
I think its clear if he is willing to invest and now I think owns the company outright (or close to it) so clearly he firmly believes in the company and wants to make it profitable. If that means the game gets sold off, or invested in who knows. I doubt it will turn into a "management" game where they just keep it kicking for several years. But who knows.
Layoffs happen, the reasons are many and not really related to bad performance of certain employees. If an employee is bad, he'll get fired on the spot. Those kind of layoffs happen for strategic reasons, or to cut costs. The former means, Cryptic is focusing on other projects and the fired stuff isn't needed anymore. The later... well it usually means the company is in deep **** and cutting flesh. Both options are bad for Neverwinter.
As for the people who lost this job: This is a dynamic market, people move from one company to another all the time. My career "record" was 2 years at the same place, and I was fired only once. I'm sure they will find a good workplace, and very soon. And maybe some of them even had other jobs lined up already and were jut waiting for an layoff.
Anyway life moves on.
I hope I helped someone get an idea of how thing work in the industry.
Best wishes to the people who'll be looking for new jobs, and for Nevernwiter.
I think given the nature of the share repurchase from the CEO, while it may have been to boost profitability, I do HIGHLY doubt a massive investment of hundred of millions into PWE to just let parts of the company go stagnant. This is all speculation but it is most definitely attributed to the profits of Cryptic. Now what remains to be seen are what happens next.
Either this game, they will "cut losses" and decide to just maintain it with no real investment and look to something new (currently in development) OR this was a "trim the fat" type of move, cutting costs between modules since 6 is about to release and they will beef up areas where needed.
Even a healthy business goes through ebs and flows of the cycle and both hires and fires people when at first it doesnt make sense.
I do see some openings on the website, which may be for something else and NOT neverwinter, OR as I said before, it could be a timing thing and they will re-hire where needed and I think there is atleast a fair chance this game will continue to get some attention. Im not sure when the license is up for them to use DnD but as long as this remains the newest DnD game on the market there will be a popular audience for it.
Thats unfortunate. I doubt it will happen as well, but its worth a try
Oh and I forgot to add to my recent post- given the investment into the console space, I am HOPING that this means more development for Neverwinter. I think the PC version is almost like a BETA test for Console version seeing as Neverwinter would be one of the first MMOs for Console.
Its also got a fantastic combat system that plays well there too, So I strongly suspect that we will see changes first, then as they fine tune it, it will hit console.
Again, who knows, its all speculation for all I know module 7 could be done already and they are just rolling things out as they make revisions to plans.
I forget the term for it, but I think Cryptic uses more of a "push" model where there is little development in the works until they announce a new module then its an all out dash to get the most content completed as fast as possible. They probably rotate devs to other games in the meantime and maintain with a skeleton crew for small updates until another module then a big rush again. (there is a more technical term for it).
Just throwing this out there, but there's all kinds of reason for declines in profits. If you actually read the report that link is from, here's the recommendation:
The reason Revenue was up but profits were down was because PWE was making significant investments in R&D, marketing and launching new products during Q3 and Q4 of last year, which is an investment, not an expense. The hope (and as shown by the recommendation in the report you linked but didn't read) is that PWE will see significant returns on those investments in 2015.
So it's very possible that these layoffs are part of a bigger restructuring at PWE as it continues to grow. It's not uncommon for companies to eliminate positions in one place, while adding positions in others.4
UNAUDITED FINANCIAL RESULTS
I suppose it COULD be, but, with those numbers, I don't see it as being LIKELY. :cool:
(btw, before I get moderated for this.. it's google-able, not hard to find, AND obviously, a matter of public record)
The problem is, as many of us have been saying, is that the $10 purchases don't do much to advance your character, even if done every single payday. It is the hundreds of dollars at a time that will advance your character significantly. This is a serious problem indicating faulty underlying business model. That large of a layoff indicates systemic fail more than incompetence on an individual level.
Second, they "start firing people left, right and center"...that's crazy hyperbole there. In total 14% of people from Cryptic lost their jobs, and only half of that was dedicated to Neverwinter. Not 24%.
As far as that "being a lot of manpower", that's totally subjective.
And then you start diving deep into conspiracy theory territory with that last bit. I know it's not as exciting as you want, but sometimes the simplest solution is the right one. And to say that "it makes a lot of players very uneasy about the future of the game", I've been hearing that on this forum for two years now...can you at least try to be a little creative with the doomsaying?
Also, thanks OP for posting the news.
Hey guys,
This thread has gotten a little out of hand, so I'll need to close it.
Some things to note:
- Module 6 is still coming on April 7th.
- Any further "Doom" Posts/Threads will be closed/removed.
Thank you!