CCP drops into red, losing $21m in FY 2013
R&D expense spike thought to be written-off costs of World of Darkness
CCP Has recorded a loss of over $21 million for financial year 2013, a considerable drop from a profit of $4.6 million the previous year. Revenues for the company rose to $76.7 million from $56.3 million.
The predominant, if not only, factor in the sudden profit dip is a massively increased R&D budget, which shot up from $16.5 million in FY 2012 to $56.5 million in FY 2013. Whilst some of those costs are likely to relate to the development of Eve Universe properties Valkyrie, Online and Dust, a significant portion is thought to be attributable to the cancellation of World of Darkness, the Vampire MMO which ceased development earlier this week, resulting in the loss of 56 jobs.
A note in CCP's full financial presentation seems to support the theory that a large factor in this $40 million increase in R&D costs was the removal of asset value previously attributed to World of Darkness.
"During the year the company assessed its capitalized development assets and determined that a portion of those assets would likely not have future economic benefits," a statement accompanying the report explains. "IAS 38 requires that such assets should be derecognized and removed from the balance sheet. The expense related to the derecognized assets are presented as part of research and development expense in the statement of comprehensive income."
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