Calling All Cars: The End of APB

That’s that then: APB has gone offline. Links to the official site are now dead.

Sure, some companies may have been talking to Real Time World’s administration about picking up APB (300, with a shortlist of 6), but most of them would have been poking around to see what they could pick up cheap. Before I started this article I was sure that rumours would start to circulate about someone coming to APB’s rescuse and, sure enough, the tweet that just came through names Epic Games as a possible saviour. I’m guessing: no. Or at least not APB as it was – more likely they (or any other buyer) want some of the ‘pieces’ left by APB’s / RTW’s rapid exit. The bits of the engine used to build and operate APB are more valuable than the game itself… unless some company wants to make a rapid entry into the MMO space. And given that 300 interested parties got involved but no-one managed to pick up APB before shutdown, I think that’s unlikely.

Ex-RTW developer Luke Halliwell (he was their Technical Manager) has posted up three articles (at this point) indicating why he believes APB failed and RTW collapsed. It’s interesting reading - the first piece is here – and is pretty open in where the various faults lay. (And no, he doesn’t blame the community managers over the incredibly siloed approach APB was taking to internal roles.) I’ve seen some comments that APB would have succeeded if it had been a better game, but I don’t think so – RTW had already set itself for a horrible fall whem APB launched. And it all comes down to one thing: money.

Mo’ Money, Mo’ Problems

Mo money x 3

... anyone else find that movie extremely dull?

RTW made two critical failures when it came to money:

  1. Spending that vast majority of their invested capital before APB launched; and
  2. Not talking about money.

Of the around $100m dollars invested in RTW, the bulk of that went into APB. Basically RTW worked out a way to spend all the money they were being given and away it went, into a rapidly growing business and other titles. On the surface, this seems insane, but as Halliwell indicates being given all this money likely made RTW feel a bit invincible (read: complacent). After all, $100m? That’s enough money to make any dream come true!

So (much in the same way single-player titles budget) RTW spent pretty much all the money they had before APB launched, in ways both planned and unplanned. Here’s where the critical failure point appears: APB had to be an immediate success for RTW to stay afloat. The salaries of 300 people were a big thing to cover, so APB couldn’t be a slow mover (such as selling only 130k copies or so). There was no Plan B. It’s why it took less than two months after APB launched for RTW to go into administration and only 80 days for APB to go into the history books as they shortest lived MMO ever.

Here’s the thing: even if APB had sold twice as many boxes, there still would have been problems. Investors want a decent return on their money, often in the order of 3x – 5x the invested amount. Although RTW’s Dave Jones said that APB would be financially viable at 100k to 200k players – and that’s the range they achieved –  that’s not a range pays the bills and pays back investors. RTW would have found itself squeezed by investor demands pretty quickly even it had achieved a better launch… and with no money in the bank to help reassure them the company was still viable, spending all the dollars up front put APB into a very precarious position.

Money burning

Maybe that money-fuelled furnace in RTW's lobby wasn't the best idea either.

The second point is related, because it is about how the money got spent: Haliwell reports that money conversations were extremely limited. Finance didn’t want to release figures, different sections did the work arounds to get what they wanted and perhaps no-one actually had a clear view of how RTW was travelling until too late. Reports of the RTW internal culture being extremely siloed didn’t help, but not being able to have conversations around money / cost control directly led to that $100m investment disappearing.

The critical issue here is that without cost controls, APB could have easily have never launched – RTW could have just run out of money. This happened in a way that appears relatively independent to the quality of APB – it could have had the best launch ever, but RTW would have just kept burning money until things collapsed.

So, basically working to spend all the money before launch and not having adequate cost controls in place set RTW up in a very tight space with little room to move, regardless of APB’s final release. Sure, if APB had been some sort of industry-redefining success none of these issues would have mattered, but that’s not something you’d want to depend on. I’ve already covered my opinion on APB’s revenue model but the two issues above are more important than revenue: APB could have launched with a better-developed revenue and still fallen over when no-one checked how the money was going out the door or how much was left over for next month’s pay cheques.

Of course there are other factors that assisted in RTW’s downfall, but the speed at which it occurred is due to the studio running out of money – money that had been spent too quickly and without much checking about where it was going.

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3 thoughts on “Calling All Cars: The End of APB

  1. I believe that Dave meant 100-200k regular, paying subscribers when he quoted those figures, rather than total sales in that region. In other words, RTW underperformed by close to a 10 to 1 ratio on their supposed worst-case benchmark.

    • I’m sure you are right, but I’ll admit to missing any kind of box sales targets for APB. That said, CEOs need to be careful about the player figures they throw around – “we need 100k – 200k players and we’ll be doing okay” is a lot different to “we need to sell 1m boxes and then have a 10% – 20% retention rate and then we’ll be doing okay”.

      But, as I think I indicated, a player base of 100k to 200k would probably make the game sustainable, but wouldn’t be making back the money APB’s investors would expect to get.

  2. Pingback: Great MMO Company Collapses of Our Time – RealTime Worlds | Vicarious Existence

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