The Pearl Abyss purchase of CCP has not been a stellar success for either company, to the point that I wrote a post a couple of years back wondering who would have been a better parent company for the Icelandic developer.
Well, seven years down the road it seems like we’re going to get to find out how the other options might line up.
The new addition to the logo page back in 2018
It was announced in the South Korean press today that Pearl Abyss is seeking to sell off its Icelandic subsidiary. Pearl Abyss has had its own financial issues, but according to translations of the press coverage, CCP has been dragging their parent company down.
The problem is, as always with CCP, that their main title, EVE Online, can be run profitably but that the company goes into deficit spending trying to develop new titles… which inevitably fail.
They have been working on, and failing at, first person shoots for more than 15 years.
How is started…
They invested in VR hype and lost on that deal, closing down EVE Valkyrie and its other VR titles.
They spent resources on EVE Galaxy Conquest, a mobile title, the quickly sank into the sea of such titles… at a time when they couldn’t even support a simple mobile app for their main game. RIP EVE Portal.
Then there is EVE Frontier, which is being subsidized by crypto giants Andreesen Horowitz, but which has stripped resources from EVE Online, most notably experienced developers, in order to create a blockchain based title that will no doubt collapse from the realities of crypto… the reality is that it is all a scam… and be just another failure on the books.
Back in 2018 the investors in CCP were keen to get out from under the company and sold it to Pearl Abyss as part of a deal that could have been worth as much as $425 million… if CCP had made certain revenue goals… which they unsurprisingly failed to do because their lack of business acumen is something of legend… so the final cost to Pearl Abyss was considerably less than the top number that is always bandied about. (The final number was $225 million.)
Anyway, it turns out that combining two companies that can’t ship another successful product isn’t a pathway to success. So Pearl Abyss appears ready to unload CCP. The likely candidates seem to be Tencent or NetEase, both of whom have the support of the Chinese government and deep enough pockets to make acquisitions even as western publishers continue to slash staff and moan about the cost of making video games.
Whoever purchases CCP, should a deal be made, will no doubt start off by assuring customers that things won’t change… and then will take a chainsaw to the company until it is small enough to be profitable while still being able to support its one profitable title. Whether Hilmar’s vanity projects… or Hilmar himself… remain after any acquisition remains to be seen.
More on this as it develops. Pearl Abyss might deny the whole thing tomorrow, or we might have a suitor announced.
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