So, dear readers, I've been away from this blog since the end of EVE Vegas. In fact, I've been offline from EVE Online for a month. The reason: I had surgery immediately following that great event, and I took a break from my usual pastimes to recover.
For those curious about the personal details, I had developed a case of rhinophyma, common with people like me who are afflicted with rosacea. The only cure for this is to cauterize all the skin off one's nose and let it re-grow. As you might imagine, playing EVE Online and writing about it were not high on my priority list after getting a bloody wound burned into the middle of my face. However, in retrospect, I probably should have tried to write something, as I'm sure whatever I produced while under the effect of powerful narcotics would have made for some hysterical and entertaining reading.
I now have a slightly smaller nose after this re-sculpting, and the skin has grown back quite well, though it will be at least a couple more weeks until I'm fully fit for human observation again. For now, I have to keep it slathered in antibiotic ointment, which makes my snout look shiny and wet, like a dog. This amuses my ever-charming bride to no end.
But enough about my personal travails. A lot has happened to EVE Online in the last month. So much, in fact, that I've been perplexed about selecting a specific topic to comment upon. That is, until today.
CCP Games up for sale?
Today, Bloomberg reported that CCP is "exploring strategic options, including a sale of the business after receiving interest from potential bidders". The company's management team and outside investors are now actively evaluating whether or not to proceed with a transaction.
This news does not surprise me. Over the last couple of years, CCP's management team, led by Hilmar Veigar Pétursson, have made several decisive decisions to clean up the financial structure of the company, including writing off the entire $21.4 million World of Darkness project, improving operational efficiency (including, sadly, laying off some employees) and securing new outside funding. The result as been a much stronger balance sheet and earnings picture, which has been further enhanced by the success of new virtual reality (VR) games, EVE: Valkyrie and Gunjack.
In addition, the successful introduction of a "free to play" Alpha clone option in EVE Online has shown that CCP's flagship product still has a lot of life in it, and remains a solid base for company operations going forward.
In summary, CCP's business performance has never been better, which means there will never be a better time to cash in. And having worked with capital investment firms in my own career, I know the kind of pressure they can exert to move forward with transactions, so they can reap the desired rewards. CCP has at least three such firms, so poor Hilmar must be getting pushed hard on all sides to move forward with a sale.
Let's talk numbers
Don't feel too badly for Hilmar. The Bloomberg post also says "A sale of CCP could value the business at as much as 900 million euros ($955 million)".
That warrants repeating for emphasis: $955 million - almost a billion dollars.
As Captain John Rourke says in Clear Skies, "HOW much?"
With that kind of valuation, deciding not to sell would only make sense if Hilmar and his outside investors believed that they could earn significantly more in the future. But that is extremely speculative, and I don't think they will take the risk. Most likely, the company will be sold, and very, very soon.
If I were them, I'd take the money and run. And who can blame them?
Welcoming our new masters
Who might actually pay this kind of money for CCP Games? The Bloomberg article does not speculate on this point, and rightly so. Certainly the usual suspects come to mind: Sony, Electronic Arts, Microsoft, among others - but there could be a number of other players who might see snatching up CCP as a strategic move, especially if they place a premium value on the potential of VR entertainment, in which CCP has demonstrated leadership.
What new ownership might mean for EVE Online will depend entirely on the culture of the acquiring company. In my professional career, I've been involved in a couple dozen merger and acquisition integration projects, and I can tell you that about half of them go well - and the other half go badly wrong.
In my limited experience, how well an acquired firm performs after their company is purchased depends a lot on the degree of alignment of organizational cultures, as defined by how the respective firms make decisions. If one firm is a top-down, command and control culture, and the other is an individualistic, entrepreneurial culture, there is going to be a clash, which usually results in a lot of good people leaving, by choice or by force.
It's too early to predict how this will affect EVE Online, certainly. But given the size of the numbers that are at stake here, big changes for CCP - and potentially for our beloved game - are coming very soon indeed.
Fly safe! o7