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Behind the Scenes of the Paragon Studios Shutdown

April 10, 2013 Article Start Page 1 of 3 Next
 

Long before THQ collapsed and Disney's shutdown of Warren Spector's Junction Point Studios, game developers were shocked by NCsoft's apparent sudden shutdown of City of Heroes developer Paragon Studios.

To outsiders, the Aug. 31 closure seemingly came out of nowhere, affecting 80 employees -- many of whom were just as surprised as the rest of the gaming world. But had history zigged instead of zagged, Paragon could still be around today. In fact, say Paragon veterans, up until the last minute, it looked like the company was facing a much different fate.

Paragon management -- including general manager/co-founder Brian Clayton, director of product development Destin Bales, and director of business and marketing Ross Borden -- actively negotiated with NCsoft to buy back the studio, which would have resulted in both the employees retaining their jobs and keeping City of Heroes alive for its core, but dedicated, fan base.

The deal looked like it would go through -- but at the last minute, roadblocks arose that scuttled the negotiations, sealing the studio's fate.

"It was very much a surprise," says Matt Miller, former lead designer at Paragon, who had been brought in on the buyout plan. "We all were really working as if things were going to work out. ... It was business as usual right up until the last day."

NCsoft, in a statement, said the decision to close Paragon and shut down City of Heroes was not an easy one, but ultimately, the company felt the action was best for its customers.

"We looked to sell the franchise multiple times, however, we were unsuccessful in finding a suitable partner that we thought would support City of Heroes' fans in a manner they were accustomed to for years to come," the company said. "Closing a studio and sunsetting a beloved franchise is never an easy thing to do for the publisher, the developer or the fans. This was not an easy decision to make. We truly thank our fans for their years of support and we hope they understand the difficult position we were in when making the final decision."

The sad saga of Paragon actually starts a couple of months before the doors were closed. Clayton, Bales, and Borden were told things were not looking good for the studio. NCsoft management was planning some changes and they were ordered to begin planning for the end of City of Heroes.

Paragon, which started as NCsoft NorCal, was given caretaker duties for the game when the publisher bought the property from creator Cryptic Studios. Though the game launched in 2004, it still had an active community, which Paragon supported with regular updates -- and even move the game to a free-to-play model in 2011. (Miller says the game was more profitable as free-to-play than it was in the pay-to-play model.)

The developers, arguably, loved the game more than the fans -- and that passion led them to look for alternatives to a shutdown.

"Those guys ... really loved what the studio was doing and they really felt that the game still had legs," says Miller. "So they actively sought another publisher to purchase Paragon Studios from NCsoft. ... Suffice it to say that eventually the talks broke down. The buyer wasn't going to buy and NCsoft wasn't looking to sell. So, plan B, which I always thought was a great plan from the beginning was the management buyout."


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Comments


Alan Boody
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"Miller says the game was more profitable as free-to-play than it was in the pay-to-play model." - Miller

I think that this is a useless statement since it doesn't provide enough information. Are they comparing this to what the game was at at that moment or are they comparing it to when City of Heroes was at its peak? I'm assuming that they mean compared to what their profits were at the time of the free-to-play switch or just before it.

Tony Vazquez
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As administrator of the Titan Network and one of the people heavily involved in the player-run efforts to save City of Heroes, I want to say a huge "Thank you!" to Gamasutra for digging into this topic. I still feel that shuttering City of Heroes was a huge mistake, that the game still had a lot of life--and value--left in it. I'd like to also point out that efforts are still underway even after over four months to get the IP and/or code base transferred to another publisher or studio to relaunch the game. There are also efforts underway to create new superhero-themed MMORPGs, "spiritual successors" to City of Heroes, by trying to capture elements of what made the game fun, but without using the IP of NCsoft. All in all, while the shutdown of City of Heroes was a huge blow to our community, we the City of Heroes community are still here, we are still active, and we are still working hard to ensure that the creative energy and hard work of the developers and players is not forever lost.

I am still in semi-frequent contact with some of the former members of Paragon Studios, and I am really happy to see that so many have moved to other companies where they are continuing the careers that they love. These were top-notch people in the industry, people who were deeply devoted to City of Heroes and who worked on the game with a passion that's rare even in an industry notable for how passionate people are about their products. NCsoft's loss has become the immense gain of many other companies, and I wish them the very best and look forward to seeing the products of other projects they are now working on.

As for NCsoft, I am still baffled at their decisions. Many years ago they broke into the Western gaming market in a huge way and gained a lot of loyal supporters in the process. As a community, we supported NCsoft through their break-up with Cryptic Studios, and I know many City of Heroes players who helped publicize Lineage, Guild Wars, and Aion. Many were very excited about the launch of Guild Wars 2, but when the closure of City of Heroes and Paragon Studios was announced a mere three days after it was launched, it irrevocably tarnished the game's reputation with a lot of loyal gamers who felt kicked to the curb. The worst part of this situation is that other fine development studios such as ArenaNet (developer of the Guild Wars franchise) and Carbine (developer of the upcoming Wildstar game) are paying a negative publicity price for NCsoft's actions.

NCsoft has also changed its story over time. Initially, NCsoft told players that "continued support of the franchise no longer fits within our long term goals for the company." Later, after an anonymous source within Paragon Studios talked to MMORPG.com about the success of the game at the time of the shutdown, NCsoft said, "[Paragon Studios] was unprofitable before the shutdown," and of the conversion to a free-to-play business model, "it wasn't enough to support the studio's needs." I've talked to multiple people within the former Paragon Studios who have indicated that the game was still very profitable and, as Matt Miller indicated in this article, that the conversion to an alternate business model was very successful.

Nevertheless, if NCsoft wanted to disassociate itself with City of Heroes and Paragon Studios, we have never questioned that decision. We have consistently only asked that NCsoft to do what it can to be a part of transferring the game into the hands of a publisher of studio that could continue the game. This would have been a win-win-win scenario: NCsoft wins positive public relations as a company that takes care of its customers even when it no longer feels a game or studio is in its long term goals, 80 passionate employees of Paragon Studios wouldn't have had to lose their jobs and see the product of their immense creative energies simply wink out as the servers shut down, and the loyal fans of City of Heroes who have poured millions of cumulative hours into the game would still get to enjoy the product of their fandom. On October 2, NCsoft released a statement claiming that it had "exhausted all options including the selling of the studio and the rights to the City of Heroes intellectual property," yet as recently as PAX East on March 23 in a panel on the future of online games, Jack Emmert, CEO of Cryptic Studios and the first Lead Designer of City of Heroes, said, "I'll tell you what Jeremy [Gaffney, Executive Producer at Carbine], just tell anybody at NCsoft, pick up the phone, I'm there," saying that if NCsoft wants to talk about City of Heroes, just give him a call. I just don't understand how NCsoft can honestly claim that it has exhausted all options when the option to sell the game to Brian Clayton and other interested buyers has always been and continues to remain within its grasp.

Ultimately, I am still hopeful that NCsoft will come around and eventually salvage what is left of its reputation by letting the IP and code base for City of Heroes go, and I really appreciate Chris Morris and Gamasutra for understanding that there is still a lot to this story that continues to impact a loyal community of players and the gaming industry as a whole.

References
----------------------------------------
City of Heroes Developer Shuts Down
http://www.ign.com/articles/2012/08/31/city-of-heroes-developer-s
huts-down

NCsoft's Response to City of HeroesŪ Player and Fan Suggestions
http://us.ncsoft.com/en/news/response-to-city-of-heroes-player-an
d-fan-suggestions.php

City of Heroes General Article: Profitable or Not?
http://www.mmorpg.com/gamelist.cfm/game/3/feature/7015/City-of-He
roes-Profitable-or-Not.html

MMORPG.com's Future of Online Games Panel - PAX East 2013
http://www.youtube.com/watch?v=3aI5CRaQvEg&t=34m20s

Maria Jayne
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"We looked to sell the franchise multiple times, however, we were unsuccessful in finding a suitable partner that we thought would support City of Heroes' fans in a manner they were accustomed to for years to come."

So instead of selling it to someone who probably could sustain it for a while longer, they just shut it down entirely, not supporting any fans at all.....

They talk like it's a zoo and the fans are the animals, with no free will of their own. PR bullshit at its finest.

Rob Graeber
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Yeah I'm really confused by this too. Why would they rather shutdown the mmo and studio, rather than sell it off at any price? Am I missing something here?

Doug Poston
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IMHO: As a CoH player from the beta to the end, as much as I hated seeing the game shut down, I'd rather it have a quick noble death than a long drawn-out one with some publisher trying to milk every last drops of cash from the users while giving crappy support.

Joe E
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Because keeping an MMO alive implies significant operating costs, from servers to customer service to payments processing, etc. These are almost always handled by the publisher. What they're saying here, is nobody wanted to foot that bill to keep the game alive. The developers couldn't even push a patch out by themselves, but somehow they were going to take the wheel and keep running as if nothing had happened? Trust me, handing the reins of an MMO to someone else is a *huge* organizational effort, even if you're the original developer (which they were not)

Robert Ayres
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At PAX Jack Emmert, creator of CoH and CEO of Cryptic Studios said publicly he's interested in CoH and for NCsoft to call him. There are studios out there who want to buy CoH, why is NCsoft so adamant it stay dead? What kind of message should this send to all players of only online games, especially NCsoft games?

Ardney Carter
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The message is clear: Pirate servers got your back.

Guy Cole
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Still the saddest and most un-understandable shutdown in living memory. LEGO's closing LU was similarly ridiculous, but at least they gave a 'good' reason (which was, nevertheless, bullshit). NCSoft have a lot to answer for.

Mike Brafford
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It appears what the gaming community needs to do is to apply pressure on these gaming publishers to work to actively sell these properties that many people have spent literally thousands of dollars playing in many cases years.

It seems very odd that a buyer could not be found that would have been in the long term interests of the players that was far better than closure.

NCSoft has now closed 5 MMO's and this one was closed without any cause being given even to those trying to make a deal to save it. In view of a conversation at Pax East - MMO's should not die. If possible they should be kept going at least on a maintenance mode where you maybe no longer actively develop the games but if they can pay the costs for server and network traffic - what is the harm?

Jack Young
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Then why is Ultima Online, EVE Online and Everquest still running? Those games have dedicated following but "can't compete with todays games".

A really good MMORPG that is cared for and well loved can be like a tree. Live long, grow large, maybe bear fruit then die out for multiple reasons. Drought, disease, infestation or direct removal. COH, someone got tired of its fruit and wanted to plant a different tree.

Michael Wenk
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Look, all things end. They start, they run for awhile, then they end. It sucks, but its life. What bugs me about CoH fans is that they don't seem to understand that fact. Yes, it sucks, but go off and find something else to play. If it pisses you off so much, find something not NCSoft related to play. There's plenty out there.

If you can't accept the fact that everything ends, I truly wonder why you're playing these kind of games.

Kevin Alexander
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Firefly was so awesome...

Mike Brafford
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Did you ever play City of Heroes?

If not you wouldn't understand something vital - many are not fans of MMO's they are fans of City of Heroes. It had multiple listings in the Guiness Book of Records. It had the best costume creator in the business, the mission creator (AE), 8+ YEARS of content, it was the number one Super Hero MMO in spite of the likes of Champions Online or DCUO.

Mostly it had an incredible community of people who were heroes to EACH OTHER. It was without doubt the best game I have ever played and I am a 53 year old player dating back to Elite on a Commodore 128 on a tape drive. So you are saying I should just be happy to walk away from a game that was making a profit, had players like Mercedes Lackey, Jim Butcher, Neil Gaiman and the famous/infamous Rick Astley?

John Trauger
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Yeah all things end. Some are pushed.

As someone who went through Sierra On-Line's shutdown frenzy in 1999, I have great sympathy for Paragon's developers. We were profitable, we were working on new games with great expectation attached (A Lord of the Rings MMO, Babylon 5). The only sense I could ever make of the decision was someone in upper management didn't want money.

Same thing here with NC soft.

Craig Bamford
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All things die. We can still ask why things are killed.

Michael Wenk
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@Mike Brafford Yes I did play CoH. I also played City of Villians. And I played SWG, Earth and Beyond, Motor City Online, and many others that are DOA right now. Perspective tells me that it is entertainment, and I will find other entertainment.

Sorry, I've been burned on so many MMOs that have ended, and other single player games that were killed in the cradle or delayed so long that I have simply stopped caring. I do care that people lost their jobs over this. It sucks. However, its probably better to get canned from a company like NCSoft than to lose your job from an indie/startup where you don't get anything. I bet the folks at 38 Studios would have preferred getting fired from a company that actually pays its bills and severance pay.

As much as people seem to hate them, NCSoft is not a stupid company. They had to have data, admittedly likely projections that CoH wasn't going to perform as they needed it to.

And I am not saying you should be happy. But I do wonder why make such a stink about it. Does it do any good? I doubt it. Does it make you happy to make a stink about it? I can't see how it would. Do something that makes you happy, and since games seemed to make you happy, I'd suggest playing something else....

Shawn Heidingsfelder
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What made CoH different from most MMOs was the huge number of players within the game that had never played an MMO before trying it. I was one of them, and reading through the forums you'd find many others who loved the game for reasons other than the gameplay or dated graphics. There were hundreds of families playing together on multiple accounts and a sizable group of older (35 and up) players that gave the game the community feel it was famous for. These kind of customers are more loyal than the average gamer because they are more invested in the world they chose to call a second home. When the game shut down, there was and is still is no game like CoH to "get over it" by playing. The way the game was taken from all of us only adds to the frustration and the loyal community wants to be treated with respect by being given straight answers. So far that has not happened as the excuses from NCSoft continue to change due to their increasing PR problems.

Jeremy Reaban
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Thanks for breaking my heart again. I rather loved that game.

Daniel McDeavitt
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me too.
only MMO i played actively.

Mike Engle
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Definitely one of the greatest MMORPGs of all time, and tragic to see it end. I'm sure the team members will find good homes at other companies, as everyone in the industry knows they're rock stars.

George Purdy
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The original Battlestar Galactica ran from 1978-79 and got very high ratings, but was cancelled anyway. Why? Because people will be watching something anyway. The audience moves on, and the publishers have a lot of new games to promote to what they believe is essentially the same general audience.

City of Heroes saw a diminishing user base from the release of World of Warcraft forward. The original developers went on to make Champions, a very similar game but based on the popular tabletop RPG. Sony had released DC Universe Online, another superhero MMORPG with very well established intellectual property. Marvel failed to get their product completed. I was a fan of City of Heroes, but after years of development in 3D game engine technology, it was looking quite dated even with several enhancements added. It would have taken a complete overhaul of the game on the scale of something like Black Mesa to resurrect it. As much as I'd love to see that, I don't think they NCsoft wanted to compete with Champions and DC Universe Online, especially after both were forced to switch to the free-to-play model, which is surely less lucrative than the subscriber model.

NCsoft has released quite a few MMOGs with varying levels of success. To them City of Heroes had to be looking like an unnecessary commitment of larger resources to a smaller game. Rather than scaling down support, they probably figured the remaining players would switch to other games, possible in other genres.

Honestly after seeing what Gearbox has done with Borderlands, I think comic book superhero games will have to adopt this cel shader style (and make it look better than Champions version) to attract new players. The market may be saturated for this genre now, so it might be a while.

Jack Young
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What this tells me is follow the money.

1. Check the projected tax situation for the company along with health coverage.

2. What new projects does NCsoft got coming that could be direct competitors to COH?

3. What is the new NCsoft policies that conflict with the continued op of COH?

4. Who are the egos involved and what is needed to sate pride?

I miss Star Wars Galaxies as a game length player but I knew there was trouble to come with The Old Republic. SWG had a small but devoted following even at its end. The NGE did devastate the population but once development got past that period it was a fun game. SWG was killed so there would be no competitors to TOR. Look how that worked out for LucasArts.

I played COH but was not as devoted as I was invested in SWG through most of their lives. I miss both games for very much the same reasons. I loved their worlds and stories. I miss their communities and complexities. But mostly, there is no other MMO like these two IPs. Every AAA MMO to release since World of Warcraft is a content grinder. I miss the living breathing world that sandbox type games provide. There is a developer philosophy that most companies are adhering to of "Don't make a second job!" for the player. For many folks that's so true to keep a game valuable in the eye of "I win". Investment is lower for the company while watching short term gains rise then quickly fall. There's is no long term invested interest anymore. I feel COH got new managers, or managers with new ideas, that just didn't meet those new "crappy" goals.

Christopher Thigpen
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swgemu.com will fix those SWG blues. PRE-NGE (thankfully)

Richard Aronson
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If CoH was more profitable as F2P, then why was it shut down, or could find no buyer, or even have an employee buyout? Chances are strong that 1) CoH was unprofitable and less unprofitable as F2P, but still not profitable. In an industry where so many games lose money, and having a large established community is valuable in and of itself (for market research if nothing else) it makes no sense to shut down a product that is profitable. I hate when companies are clearly lying to us.

Weston Wedding
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You can still be profitable but not have enough of a margin to make it worth it, too. So just stating that something is profitable or even "more profitable" just doesn't say much.

Steve Badley
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Ya ... emulators work. I still play Earth & Beyond thanks to the E&B emulator team, and annually contribute to their continued development efforts by donating what equates to $10 a month. The game is old and outdated ... too simplistic ... too this ... too that ... but it retains its immersive gameplay magic, which is why I still pay to play it.

If the F2P model was indeed working, then they may be able to independently develop a similarly functioning title. Especially since they already have the customer base to make it work. Perhaps bootstrapping (DDC can cut disti costs) or maybe looking to their loyal customer base for kickstart crowd funding can resurrect it?

jin choung
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"I'm not exactly sure where the sticking points were, but in the logistics of business there's always some sticking point somewhere [on which] people just aren't willing to budge and I think that's where we ended up. There were one or two points where neither side could budge."

wtf? i don't understand this statement.

how is it a negotiation? one side has NO LEVERAGE! the alternative is shutting down!

they were faced with what might have been a "bad deal" but the alternative is "death". and they chose "death"?

what sense does that make????

"beggars can't be choosers" is evidently a foreign concept for execs???

i cannot even conceive... CONCEIVE... of a scenario where this was better than handing things over to NCsoft under whatever terms they chose short of chaining everyone to a slave ship and making them row.

the only thing i can think of was that paragon execs were being greedy and they torched the entire thing so that there would be no survivors.

Michael Joseph
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In an ideal world if a company wont stand behind it's software, it should open it up.

It's wrong to prevent people from continuing to use software they've invested in. This is the type of situation that the "software as a service" mentality yields. It's also something open source software is immune to. Indeed it is one of the principles behind using and developing OSS.

Customers should remember and punish software companies that literally pull the plug on service software this way by writing them letters telling them they are boycotting all of their software. It's the principle of the thing. And its rather extraordinary that companies can even get away with this.

Davo Copeland
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A year late, but: you can't Ask them to host that bandwidth for free.
Now, if we could pay for it, I'd happily do it with no other updates, but....

Davo Copeland
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Here's a comment a year late:

We didn't want "outer space/extra dimensional" boards... We simply wanted an increased level cap.
Why NCSoft didn't respond to our thousands of requests is a mystery. I played since Issue 2, and didnt understand why the company ignored its players.
I (we) bitched a little about nerfing toons (like every MMO), but put up with it until they added alt. universes INSTEAD OF RAISING THE LEVEL CAP!!
I (we) even heard rumors of a paid expansion: City of Legends, which i personally would have paid for (I had *about* 20 level 50 toons). NCSoft (IMHO) made a lot of strategic mistakes, not the least of which was letting the majority of their hardcore players stall at the top and become 1. Inactive or 2. Aloof Altoholics.
The simple solution was the easiest: Add another city/ sections of the city that were 51+. (Why fix what ain't broken?!)


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