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Saturday, 20 February 2021

What investors think about Eve Online with Pearl Abyss

Nosy Gamer did a good review on the Pearl Abyss Q4 results which came out on 16 February - so i want redo that review here.

What i want to do is talk about what the financial markets think specifically of Eve Online.

Many of the brokers that write about Pearl Abyss lump all of CCPs products into one line - which makes it harder to see what Eve Online is doing vs the other CCP products (such as Eve Echoes, launching into China etc).

Technically, the revenue expectations for Eve Online were reduced but this reflects the weakening US Dollar rather than anything else.  Eve Online is reported in Korean Won in the Pearl Abyss numbers so we need to remember the currency changes.

For those that do split out Eve Online, the expectations are that Eve Online had a better than expected 2020 (lockdowns helped all games) and then for a gentle decline in revenues over the next few years.

To put this in context, most investors are expecting existing games to see a decline in revenues when we come out of the lockdowns.  The question is how much of a decline.  However, once we have the initial decline, most investors are then expecting existing games to start growing again.

For Eve Online though investors are not expecting a noticeable pull back in 2021 but merely a gentle decline in 2021 and 2022.

This fits in with the narrative investors have about Eve Online - it is a very loyal player base though not really growing.  So merely seeing gentle attrition over time.

Otherwise, Eve Online is barely mentioned when investors talk about Pearl Abyss.  To me, this looks like everyone is assuming that peak revenues have been achieved and the aim is to hold onto these revenues or at least only allow a gentle decline.

It seems that the value in CCP to Pearl Abyss is the new product launches (Eve Echoes Global, Eve Online into China) and more access to the western market rather than growing the current Eve Online.

Other items of note

The Pearl Abyss presentations do mention that 80% of the player base of Eve Online originated from cohorts prior to 2018.  i.e. of the players around at the end of 2017, 80% of them are still around today and therefore the rest of the players today have joined in 2018-2020.

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