India Times hires Stephen Glass, makes up news, SOE not eating curry.

[schild]

Seriously.

Not true.

[schild]

Oh, also, Merry Christmas SOE?

Yeesh.

I'm going to go curl up in a corner.

[MahrinSkel]

This is just...strange.  Where the heck did they get the capital?  According to that article, the entire Indian online gaming market is worth around $500K a year.  And what the heck do they think they are buying, besides a revenue stream that isn't pitiful?

The math is bad, anyway, development isn't SOE's biggest expense by a long ways, that would be Customer Service, followed by bandwidth.  Of course, moving CS to India will be a forgone conclusion with this deal, so there goes that one.  Profits should go up quite a bit, at least temprarily.  Still, moving the development to India....

This is going to be interesting.

--Dave

[Furiously]

So, why is Sony selling is my question? What are they about to buy? NCsoft? Blizzard from Activision?

[schild]

Remember, this is Sony Pictures. Odds are, they were tired of owning a company and will just license out from here on.

SCEA has pretty much... nothing to do with SOE.

[heartless_]

Tin foil hat, must find now.   

[Soukyan]

Perhaps this is why Hartsman bailed when he did.

[schild]

Perhaps this is why Hartsman bailed when he did.

Not likely.

[SpaceDrake]

So I made a hurf blurf post in MMO about this without checking News, but everything in News is supposed to appear on the frontpage, yeah? Even with a browser refresh, this bit of news isn't appearing on the frontpage yet.

Just sayin'. Also this is a weird as hell development and I'm surprised to see any part of Sony getting out of the MMO business. We all knew that NGE and Vanguard had become fiascos, but I didn't think that EQ and EQ2 had become unprofitable enough to warrant a sale of the entire company and all the rights.

[schild]

Yea, the script isn't running. Apologies. Will to get fixed.

[schild]

Play this while reading the story. It makes things... easier on the brain.

[schild]

Now the music is funnier.

[RJO]

Smed calls false:
http://www.eq2flames.com/general-gameplay/17217-may-explain-few-things.html#post382432

[schild]

Already updated.

[schild]

I found a picture of the reporter from India Times.



the likeness is uncanny:

[Furiously]

Story makes a lot more sense now.

[Tale]

"SOE being sold to Indian company" fires are raging all through the intertubes. Smed needs a bigger megaphone than eq2flames.

[Raging Turtle]

Is it odd that I think 300 million to buy SOE sounded like far too little? 

[Viin]

Play this while reading the story. It makes things... easier on the brain.

This is totally awesome, how did you find it? Just this makes the thread worthwhile!

Which leads me directly to this!

WoW Dance!

[Trippy]

"SOE being sold to Indian company" fires are raging all through the intertubes. Smed needs a bigger megaphone than eq2flames.

They issued a press release:

http://news.yahoo.com/s/nm/20071223/wr_nm/sony_zapak_acquisition_dc

[CharlieMopps]

So SOE issued a press release stating that SONY isn't selling them? Wouldn't it make more sense for SONY to say that SOE isn't for sale? I mean, really... Smed would be the last to know wouldn't he? The CEO would be the first to go after the sale and it would make sense that he'd have no idea it was coming.

Full disclosure: I would squeal with glee if Smed got canned. Even if it meant I'd have to learn Hindi to log into EQ.

[Prospero]

The CEO has to know if the company is up on the auction block, the C*Os generally are the ones who sell the thing. At least this is the experience of my dad, other industries may very. Plus, it's not a bad thing for the execs, they get a golden parachute in most cases.

[Venkman]

This whole thing smelled almost immediately, due to the price. Think about it for a second. $300mil for all of SOE? That'd be the lowball of the century.

Now, if they're just talking about the new-ish SOE studio in India, that makes some sense. But then the price would be sorta high unless it came with rights to other SOE brands.

[IainC]

This whole thing smelled almost immediately, due to the price. Think about it for a second. $300mil for all of SOE? That'd be the lowball of the century.

Now, if they're just talking about the new-ish SOE studio in India, that makes some sense. But then the price would be sorta high unless it came with rights to other SOE brands.

I dunno, I'm no economist but what does SOE actually own? EQ, EQII and SWG AFAIK. The other stuff (Vanguard etc) is just publishing deals not owned per se. 300m to get someone else to take on SWG sounds like a bargain, EQII is doing well but how much does EQ contribute to the bottom line?

I know that Smed is denying it up, down and sideways and I believe him but the price doesn't seem far off to me - depending on whether they're just talking about the Station platform or the whole development shebang.

edit - I splel bad

[Strazos]

SoE bought-out VG, also MxO (lol).

They have some other things as well.

[Dash]

Play this while reading the story. It makes things... easier on the brain.

I love those guys.  No idea what they're saying of course, but they just seem so jolly and it's a catchy tune.   

Anyway yeah hopefully this is not true.  I'm guessing by Smeds denial that it's not.

[MahrinSkel]

Is it odd that I think 300 million to buy SOE sounded like far too little? 

It seemed odd to me too (after I finished with the above post).  Never mind Club Penguin being worth $700M, and the nearly equally excessive valuation EA put on BioWare considering it doesn't actually have any MMO's yet, SOE strictly on revenue valuation should have been in the billions.

--Dave

[UnSub]

Is it odd that I think 300 million to buy SOE sounded like far too little? 

It seemed odd to me too (after I finished with the above post).  Never mind Club Penguin being worth $700M, and the nearly equally excessive valuation EA put on BioWare considering it doesn't actually have any MMO's yet, SOE strictly on revenue valuation should have been in the billions.

--Dave

Agreed. $300m is way too low for all of SOE, including the IPs they own, the things they have in development, any technologies / patents they may own (they might, I'm just guessing), the deals they have with other companies, etc etc.

Also, I couldn't get the original article to load up.

[slog]

I don't see how any of you could have the slightest idea about 300 million being too high or too low.  Are people reviewing SOE's financials or just talking out their asses?

[MahrinSkel]

Their actual revenues are buried in Sony Pictures and not reported seperately, but you can calculate a rough range from the available numbers.  $150M is probably a bit high, but probably not much under $100M at the low end (Just as an example, EQ1 and EQ2 are probably earning $50-60M a year between them even now).

--Dave

[Tale]

I don't see how any of you could have the slightest idea about 300 million being too high or too low.  Are people reviewing SOE's financials or just talking out their asses?

Explained below by a member of my guild who has professional experience:

I don't know if that site is meant to be reputible or not, but they are stupid. They say SoE has a revenue of 150M and the selling price is 300M. When you talk about the value of companies, you generally talk about their "earnings multiple" or price to earnings ratio (PE).

price / revenue = PE and they're saying the PE of SoE is 2 hahaha. Listed companies are good value if their PE is 10 to 15, which means SoE would be valued at more like 1.5 to 2 billion, not 300M.

If it's a private company, an acceptable PE for a buyer would probably be considered lower, but still not 2.

[SnakeCharmer]

Only possible way it could happen at 300 million is if that's the initial 'down payment' of sorts, and Zapak has to pay 'income performance' payments (for lack of a better word(s)) after the sale, similar to the Club Penguin deal.  I think that was the one that sold for 350 mil and if it met certain goals after the sale, another 350 mil or some such would be due.

[Cheddar]

Only possible way it could happen at 300 million is if that's the initial 'down payment' of sorts, and Zapak has to pay 'income performance' payments (for lack of a better word(s)) after the sale, similar to the Club Penguin deal.  I think that was the one that sold for 350 mil and if it met certain goals after the sale, another 350 mil or some such would be due.

Did you just defend a ghost sale concerning a business section of one of the largest corporations around? 

[SnakeCharmer]

Nah, just tossing it out there as an option.

I don't care either way, as it won't affect me in any way whatsoever.

[UnSub]

Follow the trail of assumptions:

India is typically used by US tech companies to outsource various tasks.

SOE does a lot of things, from development of software to supporting said development for third parties to customer service to server management to a whole heap of other things I can't think of right now.

SOE could very feasibly outsource its customer service function to India. That could well be worth paying some other company to do for them. $300 million seems a little high for just that, so there may be more going on without SOE head office to ever leave wherever the heck it is currently based.

Of course, if SOE already outsources its CS, the above is completely wrong, but it was fun while it lasted.