MMO Business Report: Raph Koster Forms a New MMO Studio and Game Companies Avoid Paying Tax

This was a pretty exciting week for the MMO industry with the announcement of Raph Koster’s new MMO studio and Tencent investing in Funcom. We also have news about the revenue for Pokemon Masters and a report that shows 4 major game companies are using a UK tax policy meant to boost local developers to dodge paying millions in taxes. All of that and more in this week’s MMO Business Report.


Tencent Becomes Funcom’s Biggest Shareholder

Funcom Are Expanding With 40 New Jobs To Fill

Perhaps the biggest surprise this week was the announcement that Tencent had invested in Funcom and become its biggest shareholder. The Chinese company now owns a 29% share in Funcom. This is on top of owning or partially owning these others; Grinding Gear Games, Riot Games, Epic Games, Activision Blizzard, Ubisoft, Paradox Interactive, Frontier, and Supercell. As part of the agreement Tencent acquired all the shares that had belonged to the Norway based KGJ Capital AS.

“We are very pleased to see Tencent come in as the largest shareholder of Funcom,” says Funcom CEO Rui Casais. “Tencent has a reputation for being a responsible long-term investor, and for its renowned operational capabilities in online games.The insight, experience, and knowledge that Tencent will bring is of great value to us and we look forward to working closely with them as we continue to develop great games and build a successful future for Funcom.”

Funcom recently announced it had acquired exclusive rights to develop and publish games based on the Dune IP over the next 6 years. They’re already working on an open world sandbox game set in the Dune universe and they’re working closely with Legendary Entertainment who are releasing a new Dune movie next year.


Source: Press Release


Fortnite Revenue Down Significantly in the US

According to US market tracking firm Edison Trends Fortnite’s US revenue in July was down 52% year on year. That’s a 75% drop from its peak in December 2018. The firm also had a look at what consumers are spending their money on. In Apex Legends and Fortnite the answer was overwhelmingly virtual currency. Apex Coins accounted for 96% of spending on Apex Legends while V-bucks accounted for 83% of the money spend on Fortnite. For PUBG and Call of Duty it was the game itself that accounted for the majority of money brought in. For PUBG the game accounted for 94% of the game’s revenue with G-coins accounting for 4% and Packs accounting for 3%. Black Ops 4 was a slightly different story. The game accounted for 69% of revenue, 19% from CoD Points, 4% from Passes, and 8% from other add-on content.

Finally, the firm tracked loyalty by looking at how many people purchased something in game in June then did it again in July. Apex Legends performed the best with 62% of spenders buying something in June and July. PUBG was at the bottom of the 4 games they were studying at 38%.


Source: Edison Trends


Raph Koster Launches a New Studio with $2.7 Million in Funding

MMO icon Raph Koster has announced that he is launching a new studio, Playable Worlds with a starting fund of $2.7 million. The investment is being led by Bitkraft Esports Ventures with 1UP ventures, and multiple angel investors. The first project won’t have an esports emphasis though. The studio has said that they’re creating “an online world where a broad range of players can find a home, whether their preferred playstyle is exploring, adventuring, socializing, crafting, or player versus player combat.”

“I’m incredibly excited to bring a new world to players,” Koster said. “Technology has caught up to the visions we always had of alternate worlds where entire societies can form. It’s time for that dream to be fulfilled.”

Along with Raph Koster the studio has a lot of other big names from the MMO industry that include the following impressive list:

  • Mat Broome, Studio Art Director – H1Z1, Planetside, DC, and Marvel
  • Brian Crowder, Lead Server Engineer – SOE, EA, Zynga
  • Greg Costikyan, Lead Game Designer – Backflip Studios, Boss Fight Entertainment


Source: Games Industry


4 Major Video Game Companies Avoiding Millions in Taxes in the UK

According to a report from The Guardian, Sony, Sega, WarnerMedia, and Take-Two Interactive have all taken advantage of a UK tax policy that is intended to boost the domestic video games industry. They’ve been using the Video Games Tax Relief to avoid paying tens of millions of pounds in corporation tax.

WarnerMedia has reportedly claimed up to £60 million, Sony £30 million, Sega £20 million, Take-Two Interactive £42 million. Alex Dunnagan, a researcher at TaxWatch UK, said the new findings show the scheme had “become a cash cow for large, tax-dodging multinational corporations who are milking the system to extract hundreds of millions of pounds in subsidies from the British taxpayer. It is clear to me that much of the subsidy is unnecessary, as many of these corporations were producing hugely popular games since long before the introduction of VGTR.”


Source: The Guardian


Pokemon Masters Brings in $33 Million Globally Its First Month

Pokemon Masters has now had the second highest grossing launch month for a Pokemon mobile game, second only to Pokemon Go. Japanese spenders led the pack, accounting for 58% of the first month’s revenue. Meanwhile players in the United States brought in 19% of the spending, $6.3 million. Hong Kong, Taiwan, and France rounded out the top 5 markets for the game. Total spending during the first week averaged at close to $3.5 million a day, but since then it has been declining. Spending now averages $230,000 per day.

The game has been downloaded by nearly 12 million players globally on the App Store and Google Play. This puts its average revenue per download at $2.80. However, the Japanese playerbase spends an average of $12.90 per download, which matches the spending on Pokemon Go for the country. Players from the United States on the other hand are spending $2.33 per download.

The game isn’t taking the world by storm like Pokemon Go did, but it is performing incredibly well and it looks like it will have a long life, at least in Japan.


Source: Sensor Tower

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