Funcom CFO resigns as full-year losses hit $33.8 million
Executive exits as Age of Conan creator suffers $23 million fourth-quarter shortfall.
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One look at Funcom's year-end fiscal results, and it would be easy to think a raging barbarian had taken a barbed club to the Norwegian game company's profit genie. In reporting its earnings results today, Funcom revealed revenues of $39.9 million for the full year, thanks to sales of its massively multiplayer online role-playing game Age of Conan, which launched in May. However, Funcom also saw earnings after taxes dip to losses of $33.8 million in 2008, from a $2.16 million gain in 2007.
At primary fault for Funcom's plunging income was a $22.8 million impairment charge that the game maker suffered during its fourth fiscal quarter. In Funcom's words, the bulk of the charge was "to reflect the impairment of intangible assets, mainly on the Age of Conan asset to reflect lower level of revenues than anticipated at the time of capitalization."
During the October-December period, Funcom said revenues amounted to $8.66 million, though the aforementioned charge pushed its earnings after taxes to a loss of $30.8 million. Despite the disappointing results, the publisher said it remains in a secure cash position, with $39.3 million in the bank through December 31.
Along with announcing its dubious earnings today, Funcom said that it would be parting ways with its current chief financial officer, Olav Sandnes. The executive, who signed on with Funcom in 2006, will remain in his position until the company appoints a new CFO. According to Funcom, Sandnes plans to "take up a new position in a different industry."
Looking to the future, Funcom remains optimistic in light of its uneven 2008 performance, thanks to a heartening stabilization in Age of Conan's player base. While Funcom did not provide an update on Age of Conan's subscription levels (which stood at 415,000 as of August), it did say that the MMOG's player base has stabilized in 2009. The game maker also noted that average subscription periods have improved in the New Year, with player activity also on the rise.
Funcom notes, however, that Age of Conan's prospects for future growth remain "relatively uncertain," despite continued investment in the game. Excluding customer service, 120 people are currently at work on the MMOG, and Funcom has a number of in-game enhancements slated to be rolled out throughout the course of 2009. In a bid to lure in new players, the company also revealed plans to introduce a free trial period in the coming months. No mention was made of the status of the Xbox 360 version of the game.
In January, Funcom announced plans to consolidate Age of Conan's user base, slashing its total server count from 49 to 18. The MMOG also saw the departure of game director Gaute Godager, who resigned from his position after expressing irreconcilable "dissatisfaction" over portions of the game.