Tencent has Invested in Grinding Gear Games
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I bought shares in tencent after hearing this. Now it's your turn to help make me rich like I've supported ya'll for the last 5 years. Thanks!
Last edited by bendgamer on May 23, 2018, 1:47:08 AM
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Hi All,
First post here...lots of bad information so I wanted to try and explain some basics for people.. 1) All sales made by GGG form their Revenue line. For simplicity (and not knowing if they do anything unusual) all sales in a month are reflected in that month. 2) All costs incurred by GGG in a month will go into their expenses (this includes salaries, freelancers, utilities, depreciation etc) 3) Revenue - expenses in a month = profit. Profit at the end of the month gets rolled into retained earnings. *** Because GGG was a privately owned company, when Tencent purchased those shares money would have passed directly to the shareholders who held those shares. This means from a structural sense Tencent now holds a large share of the company (but not outright ownership). Reasons Chris might not have sold are impossible to ascertain..I won't try and guess them. *** From here, share splits begin to matter as this is how profit is extracted (in this case by the remaining share owners - Chris included). Dividends are issued at the discretion of the board of directors. How this occurs is at the discretion of the board - it would most likely be annually. *** This arrangement could have a variety of additional components that could occur that we can't guess (Tencent could charge GGG monthly invoices for managerial help, a way to extract cash out of the organisation, and most definitely have a representative on the board now. If the retained earnings don't grow, they would most likely be concerned as they would have less opportunties for cash from dividends later. However they also might inject additional cash into the business to allow for growth (I'd highly expect this to occur in China to develop new revenue streams for GGG). Chris is also highly likely to be contractually incentivised (earnout contract) to continue to grow the Revenue of the business. *** So in summary, yes, if purchase something from GGG that money is ultimately going to end up with Tencent. If you have a problem with their ethical conduct, then definitely boycott PoE, but know that ultimately GGG would pay the price and be shut down as an entity not worth continuing due to lack of profitability. Source: very familiar with stuff like this. Cheers, Sev Last edited by SeverothDB on May 23, 2018, 1:47:35 AM
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Definitely agreeing with Ashriel, SilentOppressor, and most of the others in the thread: This is disappointing, disgusting, and shameful. Dirty money and probably the start of a downhill slide for the company: And that would have been true if this had been ANY amount of investment from a company like Tencent. But a majority stake? Inexcusable. Going to start a convo with my play-group and see who all wants to drop the game permanently because of this.
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I'm not sure how to feel about this, but I have one major concern, and it's not Tencent itself....
I'm actually worried that so many people are going to refrain from buying any more supporter packs until they see "how it's going to turn out". The problem is, if no one is buying supporter packs (or significantly less), then you KNOW how it's going to turn out. Investment company or not, the game will go downhill without regular support. So, I'm going to continue business as usual unless I see any in-game issues. I'm going to continue to purchase packs as I normally would to support GGG. Because whether or not Tencent gets paid for it, GGG will become able to continue as normal as well. If we stop business as usual, they have to stop business as usual. |
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" GGG should have made that calculation before they sold to a very bad Chinese company that does evil things. Me, my sister and my dad have decided to stop all support of GGG and will be looking for a new game - or maybe go back to Diablo 2 and Torchlight II. We were happy spending money on an independent company. Not interested in, nor will we help Tencent oppress the people of China. Last edited by MarioSonicLuigi on May 23, 2018, 3:20:41 AM
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" None of those games can replace Path of Exile and you know it.... | |
" We don't have much choice. Not gonna waste time on a game that might be doomed to follow in the footsteps of other games that got bought out by rotten companies like Tencent. Cutting our losses now seems best. We're withdrawing our support, and there are lots of people who are apparently doing the same based on what we are seeing here and on reddit. This may force Tencent to do what Tencent does to games, which creates a big loop of "mess with the game", "drive ppl away", "mess with the game more", etc, that eventually leads to a shut-down or massive revamp of a great formula." Both me and my dad have watched it happen over and over again. There is no sense in throwing good money after bad. We can't always control what evil companies get our money, but in this case we can. You fight the battles when you can. Money for GGG = sure! Money for Tencent = Never. Bestiary was my first and last supporter pack. Sorta wish my sister and I had seen this before we bought all the stash tabs though. My dad has thousands of dollars invested on his account, he's REALLY upset over this. Last edited by MarioSonicLuigi on May 23, 2018, 3:32:35 AM
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" This is not how shares work. GGG is still on company level the same it was before. All your payments goes to GGG and only the profits are distributed (after investing). Tencents influence is on the board and they can have major influence there, but as a shareholder, their intend is most likely not to run their investment into the ground. There might be worries regarding Tencent trying to "milk" GGG by reducing development and increasing profits. But this is not the direction it seems to be going for now, Chris is intending to hire new stuff - typically a good sign. " The majority will first pay their rent, their servers, their wages, future investments, etc. The rest is going to Tencent 80%. To be honest, I don't think GGG made much of a profit before. " No, if I wanted to cash in, I sold 100%. Why should I still be invested in something i don't believe in? Those 20% are still a large amount of money, it would hurt to lose that. On the other hand, 20% is still a big enough share to make you rich. Alternative theory: Either GGG as a company is not as solid as we want it to be, or the owners realized that they do not have the funds available to grow GGG to where they want it to be. We also do not know what is part of the contract. Some parts of it might be good old investor money: give me x% of the shares and I will invest $LARGE AMOUNT in GGG. |
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" Honestly, I can't blame you for feeling that way; I have similar reservations myself. But that right there is a self-fulfilling prophecy. Like you said, that will force Tencent to mess with the game and drive people away. If business were to continue as normal, they probably wouldn't be motivated to mess with the game - that's exactly what they expected when they invested. However, if profits decline sharply, they will be forced to intervene.... Last edited by Crystal_Bearer on May 23, 2018, 4:08:50 AM
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" Also: this. Last edited by Crystal_Bearer on May 23, 2018, 4:30:12 AM
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