Posted in General

Sony’s shattered crystal ball

The more this Sony/SOE thing stretches out, the more I’m just absolutely fascinated and boondoggled.  I’m certainly not dancing on SOE’s grave or delighting in the frustration and uncertainty of its players — after all, how would any of us feel if our MMO suddenly got shut down for an extended period of time and its future became uncertain due to a fallout of customer trust?  As I’ve said before, most of us operate under the illusion that our online games will persist indefinitely, that they’ll always be there.  Suddenly, SOE folks are confronted with their games’ mortality, and real or imaginary, it’s got to be unsettling.

And while I certainly sympathize, as a blogger, journalist and generally curious amateur historian, I’m really curious how this will all play out.  To my memory, we’ve just never seen a situation like this in the MMO industry, ever.  Sure, we’ve seen individual games crash or studios spiral downhill, but never like this and never as widespread as this.

So the future is up in the air, and the blogosphere is thick with speculation.  I’ve noted that some of the more level-headed bloggers are expressing strong doubt that SOE can even pull out of this at all, and even if it does, it will be hobbled.  To quote Tipa:

“But I worry. I worry about SOE and their games. SOE just recently had some pretty massive layoffs. After a strong start, their latest MMO, DC Universe Online, tanked on the PC. That can’t be good with such an expensive IP. Now that game is looking at a month and a half of nobody being able to play it. PC players have already abandoned it, and PS3 players will be playing some other game. So, DCUO is likely dead now. Vanguard’s handful of players can’t be expected to stick around, so that game is dead. SWG only had until SWTOR came out to live, anyway; ironically, pre-NGE SWG might have been different enough from SWTOR to co-exist. Anyway, SWG – dead.”

Honestly?  Your guess is as good as mine.  I think any crystal ball that tries to predict what happens next is going to shatter from the numerous possibilities that are out there, such as:

  • SOE comes back online, business as usual, SOE is merely out a month or so of subscription fees but the players are loyal enough to stick around.
  • SOE bounces back better than before, thanks to all of the free publicity this generated and the hunger to play on the part of the fans who’ve been forced into fasting the past couple weeks.
  • SOE kills some of its titles, merges servers with others.
  • SOE lays off more staff to recoup costs.
  • SOE becomes a much smaller operation whose AAA days are long past, and perhaps refocuses in a different direction.
  • SOE is forced to put PlanetSide Next and EverQuest Next on indefinite hold or cancel them outright, just like with The Agency
  • SOE throws all its chips into the PS Next/EQ Next basket and all but abandons its underperforming titles
  • SOE moves to grow and expand its most recent successes, Free Realms and Clone Wars Adventures, at the exclusion of all else
  • SOE sells some or all of its MMOs to other studios
  • This is the death knell for SOE, and they will close up shop eventually because of it

Again, no personal ill will toward the company or its players.  I’d really hate to see this come to a bad end, if nothing else than it would upset a lot of players who love these worlds, people depend on these games for their livelihoods, and I never am happy when a studio folds.  It’s certainly not a good year for this all to happen in terms of the strength of SOE’s competition, but stranger things have happened than a studio coming back from a bad hit like this to regain its former glory and then some.

What say you?  What’s the most likely outcome?

26 thoughts on “Sony’s shattered crystal ball

  1. SOE kills some of its titles, merges servers with others.

    That’s my vote. I don’t really play any of their games, but I wouldn’t abandon a game I liked just because of something like this.

    In spite of this, we know that SOE has been operating on a tight budget or they wouldn’t have laid off all those people and shut down something they have been developing for 4 or 5 years.

    So they are going to take a hit, but I don’t think it will be fatal.

  2. There’s no reason for SOE to close up shop on any of its original IP’s – I assume they own the Vanguard IP. MXO only went down because of licensing fees, the number of subscribers needed to keep a server running in an “as is” state is pretty low.

    That said, this situation will not help the already bad-sounding case of DCUO, and it would not surprise me to see server merges and staff cuts on any or all of the titles.

  3. I agree. This is not a situation that would lead me to leave a title if I liked it. I generally like SOE games. EQ2 has a ton of solid content. I may cancel a credit card over the breach, but there is not enough details over what caused the breach to ruin trust. I actually like the idea that they took services offline until they feel comfortable that the holes in their security are plugged.

    I think with time we will see this happen more frequently. Wasn’t NCSoft hacked a while back, and WoW accounts are hijacked all of the time.

    SOE will lose some less dedicated customers and a lot of revenue due to the free time they are offering players. Hopefully, they can float the losses. I am looking forward to EQ Next.

  4. SOE may pin their hopes on something like Planetside 2 and developing it for both PC and console. But they have been making bad decisions for a long time now. Their track record is not very good. They had EQ a long time ago, but that time is long past.

  5. Between all the possibilities, I think what is most likely to happen is this extended downtime kills their weaker (less popular) offerings off. So basically EQ2 and Free Realms survive (er… at least I think those are their games doing the best), or whatever the 2 or 3 strongest games are, and the rest get culled by the time a year passes.

  6. I would point out that until I started muckracking about the idea that SOE can shutter it’s operations… there was NO ONE even whispering this possibility.

    Now there is that “non zero” chance that SOE ends being discussed in the bloggosphere.

    So here is my take… and I have a bit of knowledge about this. The key is the server/data center independence of the Playstation platform vs the online properties. Arcane I know but if you know what I’m getting at you know my point. Suffice it to say that the Sony mothership was given a big bill by the Security/Admin personnel who have now a ball park idea of what it will take to get SOE back.

    The number was BIG as in high enough it had to go to the CEO to get authorized. [ball park? 100 million]

    This caused the English/American CEO of a Japanese conglomerate to pause….. Hmmm do I really want to throw good money after bad?

    Playstation platform stuff MUST be salvaged and protected. SOE is a distant second. If it is possible to technologically jettison SOE from Playstation… it will be done and ALL titles in SOE basically die… sorry.

    SOE’s best hope is that the backend systems (CC, account management, etc) are so entwined that SOE gets fixed if Playstation gets fixed so SOE continuing is “free”.

    I don’t put good odds on this happening given the “we did’nt say 1 month really statements.”

    So SOE is toast is my vote

  7. As I mused in Twitter earlier, my real hope is that the EQ/EQ2 devs leave to form a new company focused on making a new technology version of EQ; the kind of game I assume EQ Next is intended to be, but without any compromises to put it on the PS3 as well. I have a PS3, but I couldn’t care less if SOE put another MMO on the thing.

  8. Considering how everyone is always predicting doom and gloom and the death of MMOs [War/AoC etc] and yet it NEVER happens, tells me this is no different. There’s no historical evidence that a month of downtime every killed an online game….so i think it is going to be somewhere between these 2:

    [quote]
    SOE comes back online, business as usual, SOE is merely out a month or so of subscription fees but the players are loyal enough to stick around.
    SOE bounces back better than before, thanks to all of the free publicity this generated and the hunger to play on the part of the fans who’ve been forced into fasting the past couple weeks.
    [/quote]

  9. SOE will continue to benefit from having a long-term, dedicated player base for some of its titles. Plus lots of zombie accounts that are bascially free revenue.

    But for its new titles like DCUO this is a major hit. And it is a big hit for their future releases like PlanetSide 2.

    Also, Vanguard will probably remain active, but I believe that SOE announced that there is currently zero development on that title currently.

    SOE has kind of been the old standard that a lot of MMO players look to out of nostalgia or potential. Being down for so long is a massive kick to SOE’s reputation and the trust that players have in it.

  10. How is hard down no network activity no games being played NOT GLOOM AND DOOM Silvertemplar???

    Seriously if you were to map out the worst that could happen… would this NOT be it?

    I know we have all the people saying this game or this game is toast… BUT ALL titles are down right now. ALL, no blinky on the outbound traffic light, the data center has gone dark all that.

    How is it that people can compare what is happening right now with any rumor of games not playing?… THEY ARE NOT UP AND RUNNING RIGHT NOW

    No Gloom and Doom indeed… Gee if this is not SOE Armageddon what IS? the data center gets swallowed in an earthquake? All the admins get abducted by Jawas?

  11. Here’s another thing….

    What if it was SOE that was the genesis of the data breach in the first place???

    What if SOE is blamed for “infecting” Playstation Network? [just speculating btw… really]

    So what if SOE’s continued operation is perceived to be a threat to Playstation… would that not put paid on SOE’s futre?

    Just thinking here.

  12. I think what worries me is that there is, rightly or wrongly, a widespread perception among players of this genre that we input “work” or “grind” in return for later triumph. So if a game’s future is uncertain it suddenly becomes a VERY bad time investment. You risk inputting the work without receiving the payoff.

    How loyal SOE’s existing playerbase will be I’m uncertain about, it depends how sweet the deal is that they get offered as compensation. If they give me 3 months EQ2X Gold membership and a dragon mount, why wouldn’t I go play it? It’s not really a point of decision until the 3 months free is up.

    But I really do think their newbie fawcet has been shut down completely. If someone had never tried a SOE game why would you buy DCUO or EQ2 next month when they’re back up if it means grinding in a non-fun state and hoping you get your endgame payoff before the game collapses.

    Of course they could turn this around by throwing money at it – a TV advertising campaign, hiring extra live team devs etc. That’s what I’d do if I were in charge. Unfortunately I’m not and I don’t think it’s even remotely likely.

  13. @stabs
    “widespread perception among players of this genre that we input “work” or “grind” in return for later triumph. So if a game’s future is uncertain it suddenly becomes a VERY bad time investment. ”

    This is a very good point.

    Prior to reading blogs I would have said that grind time investment in a game drives loyalty only moderately compared to “game fun”, and “game friends”.

    SOE – SWG, EQ etc and the loyalty to these has somewhat changed my impression.

    Subjectively my experience is that I said goodbye to wow due to fun issues (sure I was sad about friends etc) but I personally play games to maximize fun.

    I myself don’t delay fun in a legacy game for the possibility of having fun “right now” in a new game.
    I jump to new fun quickly.

    Is this a rare thing jumping games and not looking at past time investment?

  14. My guess is we’ve seen the last non-free MMORPG on the PC side in DCUO from Sony. Subscriptions are why CC# are kept, if at all. From now on, it will be microtransaction-laden Free to Play like Free Realms and Clone Wars. These only require CC# at the time of ‘cash’ purchase, and do not have to be held on the system.
    Almost all future paid MMOs will be PS3 Only, which they will tout as having the ‘best security in the industry’ after their experiences with the PSN hack.

  15. There are multiple aspects of the potential doom & gloom scenarios:

    1. How likely are players to return if the online games are down for N weeks?

    2. Which online game services are worth keeping depending on the costs it will incur to get them back online?

    For #1 I think it mainly depends how many may have been on the fence of leaving and/or do not have much invested time in characters or in-game friends. If you have in-game friends and really like the game(s), I do not think one month downtime will be a big deal.

    But if there is a large bill to get all online games/services up and running they may consider dropping them if they are barely making a profit and if any badwill from such a decision is negliable in the big picture.

  16. I think all the doom and gloom is pretty premature. The EQ and EQII community in particular are still sizable, and those games offer features that most other MMOs don’t (particularly EQII’s housing and assorted bells and whistles).

    I also chuckled a bit at the requisite death-by-TOR predictions for SWG. People forget that many of those playing SWG aren’t SW fans (and therefore don’t give two craps about TOR). They’re virtual world fans. SWG has zero in common with TOR or really any other MMO not named Second Life. In short, it will remain viable until a comparable virtual world game happens along.

  17. Subscriptions are why CC# are kept, if at all. From now on, it will be microtransaction-laden Free to Play like Free Realms and Clone Wars. These only require CC# at the time of ‘cash’ purchase, and do not have to be held on the system.

    Really? How many people do you think don’t use that ‘Save my info’ button, and enter their numbers every time they buy everything?

    While some people obviously love the chance to scream “DOOOOOOOOOM!” from the rooftops, I think it’s a long way from being set.

    First, the cost is going to be the cost, and anyone who thinks this is going to cost $100 million is just freaking nuts. Sorry, Angry, but you haven’t got a single clue about ANYTHING IT-related if you think that’s the cost. To put it in perspective, I worked on a government software project with insane bill rates, on a 30-person team for six years and the project capped out about $80 million. So your $100 million estimate is something like 200 man-years worth of effort at double the reasonable cost.

    But let’s say that it does cost the stupid number of $100 million. What then? That money is spent, and it’s not going to be unspent. The various titles aren’t going to be any less profitable tomorrow than they were yesterday. Anyone who thinks that Vanguard or SWG players are going to abandon the games because of this – after everything else – fundamentally misunderstands the MMO player so badly it defies description. Are surprised any more that players go back to WoW after a month or two experimenting in a new MMO? Why do they do that? What makes anyone think players will be less likely to come back after an enforced break than a new game break?

    So far, no active CC numbers have been revealed as stolen. That puts a serious limit on the liability, and makes all the pie-in-the-sky cost estimates (like the $24 billion stupidity) and pops them. Most of the data revelation costs will hit the PSN side – remember that SOE is less than 25% of the overall breach. The MMO community is focused on SOE because it’s what affects them, and because it’s full of rabid trolls like Angry who are absolutely salivating at the idea of SOE going down… But the problem is for Sony, not for SOE, and the obsession over what this will do to EQ or Vanguard is sorely missing the point.

  18. My daughter played Free Realms with friends from school. They’ve already moved on and likely won’t be back. Make of that what you will.

    @silvertemplar “There’s no historical evidence that a month of downtime every killed an online game”

    Has any online game even come close to a month of downtime? Even a week? There’s simply no prior case that compares.

    Also remember that that SOE has lost TWO months of revenue at this point. One for being offline and another for providing a free month to all affected players.

    That’s 1/6 of their income for the year. Meanwhile their expenses are essentially the same. Staff and rent has to be paid, debt has to be serviced etc.

    No business survives that kind of loss intact.

    Though how SOE management will handle it is anyone’s guess.

    Mike.

  19. @buhallin

    In your estimate you’re making the error of assuming that the only costs to Sony of this breach are IT related costs.

    Firstly Sony is going to have to fork out for credit monitoring for many of those players. Even assuming only half the affected players take up the offer, at $20 per affected player we *already* hit a cost of $1 billion.

    And that’s before the lawyers get involved.

    Secondly the credit card companies are going to stick Sony with the bill for replacing cards even if Sony says no card information was stolen, after all we only have their word for it. Again you’re looking at another $1 billion plus down the tube.

    And again ignoring the lawyers fees.

    The $24 billion is obviously the worse case scenario and includes a lot of soft cost and opportunity cost. But a reasonable low estimate is in the $1 billion range.

  20. Firstly Sony is going to have to fork out for credit monitoring for many of those players. Even assuming only half the affected players take up the offer, at $20 per affected player we *already* hit a cost of $1 billion.
    You’re missing several things here. First, everyone here is focusing on SOE, but 75% of the leaked info come from the PSN side of the house, not SOE. The idea that Sony would drop the hammer for the full weight of the breach on SOE is just silly.

    But more importantly, your number is way, WAY high – YOU may pay $20, but Sony won’t. Cringely puts the number at a total of about $10 million, so you’re only off by a factor of about 100. Call it “two orders of magnitude” though – it’s the same thing, but the smaller number doesn’t sound as bad to the uninformed spewing off over this.

    As for the card replacement, yes, we only have Sony’s word for it. But I’m relatively certain that the major banks will have slightly more substantial info. They also won’t do it unless they can confirm the card numbers were actually stolen. Nobody had to issue new cards after the Epsilon breach, because it didn’t involve credit card information. Until it does, most likely by specific card numbers showing up for sale or being used, nobody’s going to do anything about it.

    So no, $1 billion is not a reasonable estimate whether you call it low, high, or the cost of a pink unicorn.

  21. @Buhallin
    “But more importantly, your number is way, WAY high – YOU may pay $20, but Sony won’t. Cringely puts the number at a total of about $10 million, so you’re only off by a factor of about 100.”

    No I believe that NoAstronomer talks with a bit of domain expertise here. Cringely is a great futurist and tech writer but it’s obvious from some of his writing he knows nothing about backend CC processing, fraud, fulfillment etc.

    TJMaxx had a breach like this and the CC banks did not just sue for 10 million. In fact I would be surprised if 10 million just covered the outside security teams Sony has employed on this (they have 3 and counting… and they are top guns that charge top dollar).

    The numbers ARE getting in the 100’s of millions right now… AND no the lawyers have not really filled their class action lawsuits against sony yet. Round figures liability is about 1-2 Billion if Sony settle’s soon.

    As I said SOE may not be ended because it was not profitable. I may be ended because it caused a 2 Billion dollar loss to the Sony mothership.

    This kind of money gets a CEOs attention quickly and they don’t like it when their bonus is impacted.

  22. postscript

    If you have any connection at all to the data security field you’ll recognize that the fact the credit data was encrypted means dick.

  23. That’s funny, Angry. When Cringely said something you thought backed up your point, he was a great source who knew everything and should be taken as authoritative. Heck, I only found the article in question because it was right next to the one you cited, which relied on his knowledge of backend CC processing, fraud, fulfillment, etc.

    This is NOT like the TJMaxx breach – at least not yet. That breach involved the confirmed theft of every credit card number for several months worth of transactions. It also had confirmed abuse of those stolen numbers. None of that applies to the Sony situation, at least from what we know so far.

    @NoAstronomer: I never trust people who claim security knowledge while making blanket statements like that. The usefulness of the encryption will depend entirely on the algorithm used, the strength of the key and the level of key security (and the potential that the key would be compromised through bad practices), the data that was stored and whether it was done in a form which could expose it to a known plaintext attack. Do you know any of that about the Sony DB? I certainly don’t. Broad statements like “the fact the credit data was encrypted means dick” makes you sound like a hobbyist whose closest association with real security is reading Slashdot twice a week.

    I don’t generally trust large companies more than anyone else, but you’re essentially calling Sony a liar, throwing out massively inflated numbers with absolutely no actual facts to back any of it up. At least so far, there’s not a single report of a Sony-compromised card showing up stolen.

    And, finally, one more time: SOE accounts for about 25% of this data loss. PSN was the rest. ANY attempt at analysis that targets SOE for death without taking that into account is nothing but blind, frothing gamer rage.

  24. Late to thread, but just wanted to say that if you look at the SoE forums this weekend, after the games came back up the overwhelming impression is “thank god the servers are back up”.

    Even EQ2Flames is mostly “about ****ing time”.

    People who don’t play EQ1 and EQ2 as their main games probably find it hard to understand, but there just are no equivalent MMOs. Most of the uncommitted boiled off years ago. The people who are left probably have little interest in playing anything else.

    That’s not really great for SoE. It’s why they have been stagnating for so long. They have a a very ungrateful, cantankerous, difficult but incredibly loyal hardcore, which they really *have* to appease, and they find it very difficult to get new blood, partly because that hardcore is so conservative and intransigent.

    The upside is that they will probably lose a lot fewer subscriptions than you’d imagine. The downside is they may still be in a slow spiral of irreversible decline.

  25. As bhagpuss mentions, and as i said earlier , people are not mysteriously going to drop SOE MMOs due to this month of downtime.

    In fact, i receive 45 days gametime on ALL my SOE MMOs that i have ever played with SOE. This is on MMOs i have cancelled years ago, SWG, Vanguard and more recently DCUO .

    Guess what? I might actually go play those games “because i can” instead of trying to kill my account or something.

    SOE will go on as usual, which unfortunately was most likely a “downward spiral” , whether the servers were down or no.

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