Eternity PoE II: Deadfire Sales Analysis Thread

[J_C]

Sales figures might be available on November 15, though Fig's last fiscal year ended September 30, so the annual report might come out before that.

Dividends on Fig Game Shares – Pillars of Eternity II will be declared every six months, as of every May 15 and November 15, and paid thereafter, in all events after such time (if ever) as Pillars of Eternity II is successfully developed and published and Pillars of Eternity II sales receipts begin to be received.

And things aren't looking good for Fig:

As of March 31, 2018, we had an accumulated deficit of $9.1 million since our inception, of which approximately $3.8 million were game development expenses. As further disclosed below, on September 30, 2016, we and our Parent jointly entered into a loan and security agreement (the “Loan and Security Agreement”) with Silicon Valley Bank, under which we and our Parent, individually and collectively, can borrow up to an aggregate of $1.0 million, all or substantially all of which is intended to be used in support of our business. As of March 31, 2018, borrowings of $450,000 are outstanding under the Loan and Security Agreement. Principal repayments by the Parent to SVB of $25,000 per month for 30 months, plus monthly payments of accrued interest at a rate of 2% above the prime rate commenced April 1, 2017.

For the fiscal year ending September 30, 2018, we expect our revenue to increase as we release more video games that we have licensed for publication, including higher budget games, such as Pillars of Eternity II. Similarly, we expect costs to increase in the year ending September 30, 2018, as we support the release of additional video games and ramp up our operations. We intend to continue licensing video games and publishing them in the year ending September 30, 2018, including releasing the games we have already licensed for publication. We have incurred substantial losses since our inception and we expect to continue to incur operating losses in the future. We do not expect our revenue from the sales of our games together with our cash on hand and net proceeds from sales and issuances of Fig Game Shares to be sufficient to fund our operations for a period of at least one year from the date the financial statements are issued and we will need additional financing, including from our Parent, to continue our operations during that period.

Going Concern

Our ability to continue as a going concern depends upon our ability to successfully accomplish the plans embodied in our business model and eventually secure other sources of financing and attain profitable operations. To date, we have had minimal revenue and significant losses. Accordingly, we have depended on our Parent and sales of Fig Game Shares to fund our operations and there is a risk that we and our Parent may be unable to obtain the financing, on acceptable terms or at all, necessary to continue our operations. As such, there is substantial doubt regarding our ability to continue as a going concern for a period of one year from the date our condensed consolidated financial statements are issued. The accompanying condensed consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern. These condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amounts and classification of liabilities that might result from this uncertainty.

And nothing of value will be lost (if Fig goes bust). Kickstarter is a perfectly viable platform if someone needs to run a crowdfunding campaign.

 

[Russia is over. The end.]

I wonder what kind of deal did PoE2 have with Fig.

I know fig demands 50% of the game's net revenue from small titles. Can't be the case here, though.

Looks like they were expecting something. Makes it interesting for poe2's profit calculations. Most people just assume that money was free, but it wasn't.

 

[Slavegal]

Most people just assume that money was free, but it wasn't.

In Feargus little personal scheme it was. My company gives a loan to my company! Which outsources to my company!
Turtles all the way up.

 

[Mustawd]

Wtf are you guys even talking about?

Bester, you have the worst grasp of anything financial related I’ve seen on this site.

Most people just assume that money was free, but it wasn't.

What does this even mean?

 

[fantadomat]

What happened with "Double Fine Productions",did they just died out?

 

[Lacrymas]

The 20 people who actually liked that KS abortion/farce they shat out can't support them alone.

 

[BEvers]

What happened with "Double Fine Productions",did they just died out?

https://www.fig.co/campaigns/psychonauts-2

 

[fantadomat]

What happened with "Double Fine Productions",did they just died out?

https://www.fig.co/campaigns/psychonauts-2

God,people are really gullible.

 

[Lacrymas]

Wait. The campaign is from 2 years ago? This is the first time I hear of this. Are they actually going to make it?

 

[fantadomat]

Are they actually going to make it?

Judging by their track record......sure,as much as they made station 9 and broken age .

 

[Fairfax]

Sales figures might be available on November 15, though Fig's last fiscal year ended September 30, so the annual report might come out before that.

Where are those from for Fig?

What do you mean? The things I quoted or the dividends?

I wonder what kind of deal did PoE2 have with Fig.

I know fig demands 50% of the game's net revenue from small titles. Can't be the case here, though.

Looks like they were expecting something. Makes it interesting for poe2's profit calculations. Most people just assume that money was free, but it wasn't.

DRIL and Fig will divide the gross receipts, with Fig’s revenue share being equal to the “Calculated Rate” multiplied by the “Gross Receipts”, each as defined below:

The “Calculated Rate” will equal the quotient of the Fig Funds divided by $14,000,000 until the Fig Share cumulatively reaches an amount equal to 1.13 times the Fig Funds, and the quotient of the Fig Funds divided by $28,000,000 thereafter, provided that if at any time the monthly amount of the Fig Share falls to less than $1,000 for three (3) consecutive months, then at the end of such 3-month period the accrual of the Fig Share shall be suspended. Thereafter, if at any time the monthly amount of the Fig Share that would have accrued, had accrual not been suspended, equals or exceeds $1,000 for three (3) consecutive months, then at the end of such 3-month period the Fig Share shall again accrue. No Fig Share shall be due to Fig in respect of any period during which accrual is suspended.

● We are not aware of any way to reliably predict the amount of sales, or sales rate, of one game from the amount of sales, or sales rate, of another game. However, we note that Pillars of Eternity, the preceding game in the Pillars of Eternity series, launched in March 2015, had as of December 31, 2016 sold approximately 954,000 units. We caution prospective investors against relying upon the foregoing to assume or otherwise conclude that Pillars of Eternity II will achieve any particular amount of sales, or any particular sales rate.

● We expect the initial retail price of Pillars of Eternity II to be $44.99. The retail price of a game is subject to discounting by the publisher and by distributors (typically with the acquiescence of the publisher). A game that sells well may maintain its initial retail price for a year or more, although games that sell less well are typically discounted faster, in order to spur sales volumes. Were the game sales price in the table above to be discounted by about 50% to $22.50 after unit sales reached 300,000 full priced units, then the Investor Breakeven point based on 85% dividend payments would not be reached until approximately 786,275 were sold.

Note: the game costs $50 and has been discounted already (-34% IIRC).

tl;dr:

Fig takes 16.07% of the revenue (after Valve's cut) until 1.13x Fig Funds ($2,542,500) are returned, which would happen at around 450k copies sold at $50. After that point. they take 8.035%.

 

[Metal Hurlant]

I've never been able to figure out the whole fig stuff. Wasn't there a minimum you had to invest? $1000? And how much does that translate to 'game shares'? Is it $1000 (your share) / $2,250,000 (fig funds) = 0.0004444 %

I have no idea.

 

[Fairfax]

I've never been able to figure out the whole fig stuff. Wasn't there a minimum you had to invest? $1000? And how much does that translate to 'game shares'? Is it $1000 (your share) / $2,250,000 (fig funds) = 0.0004444 %

I have no idea.

$1000 = 1 share. This is how the revenue is split:

 

[Russia is over. The end.]

Wtf are you guys even talking about?

Bester, you have the worst grasp of anything financial related I’ve seen on this site.

Most people just assume that money was free, but it wasn't.

What does this even mean?

It means when you get money from KS, they're free, no strings attached. Free money.

With Fig, you have to pay points on your revenue back. Money not free.

 

[111111111]

Never considered Fig to be viable, ever since it was announced, but I have never tried to keep an eye on its campaigns and it's interesting to see how bad things are.

I talked to people who are knowledgeable in financial matters (People who are AIF certified) and they all said that the fig thing was pretty terrible as an actual investment. Way too risky for relatively low reward.
Also not to sound like a popeamole lover but the things that Fig supports are never really triple AAA games so getting a good return on the investment is actually dubious.

 

[Mustawd]

Most people just assume that money was free, but it wasn't.

Wtf are you guys even talking about?

Bester, you have the worst grasp of anything financial related I’ve seen on this site.

Most people just assume that money was free, but it wasn't.

What does this even mean?

It means when you get money from KS, they're free, no strings attached. Free money.

With Fig, you have to pay points on your revenue back. Money not free.

What makes you think they thought it was free money? There’s literally zero I’ve seen that shows that. You just talk out of your ass like you always do about anything business related bro.

They made a game. By all indications it sold less than the previous game. The end.

 

[Russia is over. The end.]

What makes you think they thought it was free money?

Who they? I meant people like J_C et al who calculate Obsidian's profits here completely out of their ass, without taking into consideration Fig's cut.

 

[Mustawd]

I talked to people who are knowledgeable in financial matters (People who are AIF certified) and they all said that the fig thing was pretty terrible as an actual investment. Way too risky for relatively low reward.

Yes. The concept is called risk adjusted return.

The easy way to understand this is a simple scenario:

A. You play Russian roullette and win $1,000 for not dying.

B. You play Russian roullette and win $1,000,000 for not dying.

In both instances you’ve put up zero expenses. And your returns are very high percentage-wise.

But the return you get in Scenario A, adjusted for the fact that you could likely die is probably an extremely negative bang for your buck, pun intended.

 

[Mustawd]

What makes you think they thought it was free money?

Who they? I meant people like J_C et al who calculate Obsidian's profits here completely out of their ass, without taking into consideration Fig's cut.

Ok. Your sentence structure is confusing.

 

[fantadomat]

What makes you think they thought it was free money?

It is not like any of the long list of scams and failed projects has been sued by kickstarter. There is next to zero accountability with it.

 

[Chris Avellone]

Did the sales figures for PoE2 come out from Fig yet for investors? (I thought I had recalled someone saying November is likely when it would happen.)

 

[AwesomeButton]

IHaveHugeNick

Fairfax

 

[Fairfax]

Nothing so far.

 

[IHaveHugeNick]

[This post has been removed by the moderating team at the request of Cohen, Bernstein& Gluzman representing Obsidian Entertainment Inc.]

 

[AwesomeButton]

Chris Avellone , based on your knowledge of Obsidian, its management, and game production in general, do you see signs of Deadfire not meeting expectations, and what expectations do you imagine had been set for it?