Letter Never Sent Tell me when to go.

It was announced last week that the US branch of NCSoft laid off 20% of its workforce. Following the rule in the game industry, most of the cuts hit the Customer Support staff who exist in perpetual precariousness having neither the skills nor the job responsibilities valued by the industry. In the game industry, customer support is regarded at best as a necessary expense to supplement the end product and retain subscriptions. The view is often that Customer Service rarely creates direct value commensurate with its expense. Also, if you have two failing products, you are not going to require as much support to support them.

The layoff was a necessity given NCSoft America’s failure to follow the success of 2004’s Lineage 2 (Produced by NCSoft Korea) and City of Heroes (Produced by Cryptic Studios) with a high quality product. City of Villains did not capitalize on the success of its predecessor as it failed to create a sense of a true upgrade, which is what most people expect from a sequel. Auto Assault, on the other hand, was just a bad idea. With Auto Assault, the concept and the execution were weak throughout the project. Auto Assault was just a weak idea with a bad end result. The major mistake represented by Auto Assault is that its creators did not get the MMORPG genre. MMORPG’s are games that require the player to feel like they’re “inside” the game universe. Since the game requires you to remain in the vehicle 90% of the time played from a third-person point of view, it does not create this feeling of immersion.

It is my opinion that the problem with NCSoft is one of leadership. Not bad leadership, but tepid leadership resulting from confusing arrangements with the Korean parent other structural problems like a casual local heirarchy and relationships with contracted studios. Leadership is a difficult thing to improve, but I have a few suggestions:

1. Separate the business from the creative. NCSoft excels at distribution, marketing, PR, QA, and support. In the business of selling and supporting games, they do very well. With a few caveats they have the business side down pat, which is a testament to the solid leadership of Robert Garriott, their current CEO. On the other hand, they are lackluster when it comes to the creative, strategic thinking required to be a successful game company. Possibly owing to the age of their leadership and the Korean business culture which seeps in from the parent company, NCSoft tends to be too conservative and risk-averse. This hobbles them in two respects. One, they have trouble seeing and taking on big ideas (Guild Wars is the main exception to this since it possesses a truly novel business model wherein the player need not subscribe to the game. ). They spend a lot of time trying to do what (for the most part) has been done, making improvements incrementally. Two, the fact they are risk-averse makes them unwilling or unable to cut projects that are clearly of low quality such as Auto Assault. They continue to pour money into projects they know have little chance of success because they cannot accept the reality of a bad decision. This hurts the brand and the bottom line since it creates doubt in the mind of the consumer. This unwillingness to reverse bad decisions also injures the morale of the company. It shakes the faith of the various teams who work closely on projects because they know that if a project starts to go downhill no one will be there to handle the crisis until it’s too late. I would suggest replacing whoever is in charge of product development and splitting them off from the more tactical corporate structure. It might even help to combine operations for Asia and US/Europe into one unit with NCSoft America responsible for Western creative initiatives.
2. Move NCSoft Austin to Silicon Valley. NCSoft should consider a move for a few reasons. For one thing, Austin is not a hub for game development. In Austin, NCSoft is worlds away from its partners and competitors on the West Coast. Silicon Valley is a hot bed for the software and video game industry. Relocating there will allow NCSoft to tap into the energy and resources of the area and will help them to stay abreast of developments in the larger game industry. The West Coast is where most of the key players are located and they feed off each other. Unfortunately, Austin will continue to be a frontier outpost and, as such, a footnote in the game industry. Another reason to move to Silicon Valley is to facilitate better ties with the Korean parent company. It’s still far enough away to maintain some independence, but close enough to make travel and cooperation easier.
3. Get long-term and long-term focus. NCSoft really has to focus on the long-term success of the company by taking on large, measurable goals which are communicated throughout the company. I think too many times they get caught up in the milestone mindset of only focusing on the next goal, which is 6-12 months out. There needs to be real discussion on the long-term strategy of the company. Are they going to try to produce the next World of Warcraft? Or, will they focus on smaller titles or console games? They have to spend more time planning the direction of the company or they’ll spend most of their time trying to keep up with the competition. Plan the direction and the goals, then put the different pieces together. One thing I would like to see is a more cohesive brand. For example, when you play a Blizzard game you know who you’re dealing with. Everything they do supports their overall approach and is easily identifiable. NCSoft should take the same approach and work harder to support a larger strategy.

NCSoft has taken an important step in making the unpleasant decision to reduce staff, however let’s hope they apply the same difficult decision-making to the rest of their business, starting with some soul searching at the top.