Digital Extremes, Sumpo Food Holdings Ltd Shares in partnership/Ownership, and the Future of Warframe.

[Falconer777]

1 час назад, (PS4)Darekai сказал:

 

...........

Open discussion for questions and other facts:

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To Players

• What do you think of the Company being owned by a Chinese conglomerate? Did you knew about it?
• How long do you think Warframe will continue to operate? Do you see yourself playing warframe 2 years from now?
• Most Gamers cycle in and out of Warframe^[2] syncronized with the development cycle of new updates. what other games do you play when you get bored of warframe?
• Its been 5 years and we haven't used the light , neutral, and dark mechanic, the moon vs the sun vs the ying-yang in a meaningful way. so far it Changes only how events are perceived, but not necessarily the truth behind the matter. Given, that its my interpretation that the New war is the last chapter of Warframe, how do you think it will impact the finally?

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............

First of all, thank you for such an interesting post.

• I think this is a common practice in business. Although I would prefer that DE remain a completely independent campaign. I knew this before, it's public information)
• I think he will work another three years. Maybe more. I do not know, maybe everything depends on the direction in which the game will develop.
• I'm playing Diablo 3 right now. I am tired of the monotony of the content in the Warframe, and waiting for the update of "Fortune", etc.
• Yes, I think this choice will have some influence in the end.

 

[Volinus7]

59 minutes ago, peterc3 said:

The head of Leyou was working at Perfect World and then left it. Where does it say Leyou was set up by Perfect World - note that isn't the same entity as Perfect World Entertainment, a subsidiary of Perfect World.

It's a common strategy, buying a failing company to use previous red numbers as tax discounts then rebrand it for future uses. 

PWE already tagged along during the deal albeit in a small amount but Xu's interview is pretty self explanatory. 

[_Urakaze_]

game won't end if DE doesn't create MR30

Time passes, games eventually die, but nothing can stop you from enjoying them while they last

[ryamadeus]

I read all of the post and sure it's interesting and all but I just can't get past the fact that you actually tried to write badly. You lost every bit of seriousness. Not even gonna try to discuss any of the points you made because I really dislike pretentiousness. I'm sorry.

 

[(PSN)Darekai]

9 minutes ago, ryamadeus said:

I read all of the post and sure it's interesting and all but I just can't get past the fact that you actually tried to write badly. You lost every bit of seriousness. Not even gonna try to discuss any of the points you made because I really dislike pretentiousness. I'm sorry.

 

sorry you feel that way, but thank you for your feed back ^_^.

Never the less if you later feel inclined to look at the questions later, feel free to come back.

P.S. i looked the definition of pretentiousness and it states: 

an exaggerated sense of one's importance that shows itself in the making of excessive or unjustified claims; arrogance

 It would be greatly beneficial for me if you could point out  which claims are excessive or unjustified, or at which point i was being arrogant, or conceited. i dont believe i talked about myself in the post or boasted myself as having more knowledge than anyone else, but i could be wrong.

so if you have the time, point those items out, and ill be sure to clarify and not come across pretentious. thanks in advance

Edited August 11, 2018 by (PS4)Darekai

[(PSN)Darekai]

33 minutes ago, _Urakaze_ said:

game won't end if DE doesn't create MR30

Time passes, games eventually die, but nothing can stop you from enjoying them while they last

indeed my friend indeed.

[rastaban75]

I just wanted to mention that MR 25 out of 30 is not 83.33% of the way since the affinity/rank progression is not linear.

There is plenty food for thought in this topic🤔

[German]

Okay so if I understand correctly DE doesn't own itself but is owned by other companies. So DE isn't independent anymore then? Also do we know if the shareholders have a word in development? I remember talks about that back then but never really followed it.

Sorry I just woke up.

[peterc3]

10 hours ago, Volinus7 said:

PWE already tagged along during the deal albeit in a small amount but Xu's interview is pretty self explanatory. 

Perfect World Entertainment is a separate entity from Perfect World. PWE is not synonymous with PW. PWE has nothing to do with Leyou or DE.

[IIDMOII]

Wow. Good read op. Thank you.

I wasn't aware of any of that. Here I thought I was being a good Canadian gamer by supporting a local indie studio.

Turns out my money is going into Chinese pockets at the end of the day.

Sketchy af

The parent/holding company doesn't exactly sound like something I'd have faith in. A food company that drops everything and rebrand as tech the moment they encounter any hurdles. 

Doesn't bode well for the game if they decide there's another hurdle.

Edited August 11, 2018 by IIDMOII

[Kazzamo]

There was a big scare about this on the forums when it happened, nothing changed. If anything the game has improved since that time. No predatory micro-transactions or look boxes have appeared since then,

[Vox_Preliator]

Old news at this point.

Their policy is basically "Don't fix what ain't broke" and they've been holding to that just fine so far.

Any fearmongering that this was the beginning of the end is only anything but fearmongering in that any given moment is always the beginning of an end.

[SneakyErvin]

It doesnt really matter how much of the company they've sold off, it all depends what the contracts actually say. Something we have no idea about in the end. 

[(PSN)Darekai]

2 hours ago, SneakyErvin said:

It doesnt really matter how much of the company they've sold off, it all depends what the contracts actually say. Something we have no idea about in the end. 

^_^ We actually do, as part of rules and regulation and local laws, any merger or acquisition must be made public, including the terms.

 

See the bottom of the original post for the Acquisition agreement.

and to answer the question. 97% of control over Digital Extremes is now owned by LTHL.

[(PSN)the-creeperman]

Ok so LTHL is basically in control of DE, which would be a scary thought if I worked there, but my question is how do we know if DE has free reign or does the direction of their development come from higher up? 

[Kai_Shiba]

38 minutes ago, (PS4)the-creeperman said:

Ok so LTHL is basically in control of DE, which would be a scary thought if I worked there, but my question is how do we know if DE has free reign or does the direction of their development come from higher up? 

DE themselves have stated, even via contract, that they have 100% control of development. Nothing really changes. Bottomline of the entire thing is it ended up being a way of funding DE as well as having Warframe overseas for that audience since they can't play our warframe, they have Star armor. That's pretty much it. They have no control over DE in that regard, though they do have all control over it on their version Star Armor and from what I've seen is how the payment/platinum and store is handled overseas as well as some gameplay/story changes.

The whole leyou thing was done to death in the past and a lot of explained on how it worked. Mostly people didn't read the contract or even bothered to click it and started to create theories or even spammed DOOM threads like the game is gonna die or change in the future or pretty much blame every single change to the whole funding.

TL;DR: There's nothing to worry about

[tychondus]

The moment Warframe turns into a overly grindy game; like Chinese MMOs. That's when i pull the plug on DE and Warframe. As of right now, the balance is good. There is grind, but its not as punishing as those Chinese games. The question is how long will it be before their Chinese overlord demand DE make Warframe even more profitable on a yearly basis. This can only lead to one route. Make grinding so horrible that, players are psychologically inclined to buy plats to get what they want. I have no doubt there will be plenty of warframes in the works both concept and in development. And as past experience has shown. Each new warframe that is to be released, is getting harder and harder to obtain. Its only a matter of time before the greedy Chinese corporate machine (in forever pursuit of profits) clashes with the current warframe community. When this happens I wouldn't be surprised in DE loses players in NA, EU and Oceania and in return gain more players in Asia.

Edited August 12, 2018 by tychondus

[(PSN)Onder6099]

Oi, what we have got here, another meaningless meeting of businessmen from Wall Street, peppered with little bit racial prejudice? Gentlemen, you should rather go and play the game then e-peen, about who know the best how DE and WF business model works, here. Because how long and how the WF will look like depends on players not on businessmen.

Edited August 12, 2018 by (PS4)Onder6099

[_xci_]

Since DE is still have 100% control in development, let's not assume the worst.

[(PSN)robotwars7]

as long as the Chinese don't get full creative Control Warframe is fine. the Chinese help keep the game moving, but it's still the Canadians that decide how the game is run. that's the way it is, and the way it should stay. we don't need to don the tinfoil hats just yet, and I'm sure the Chinese don't want to risk changing something that's making them so much money.

[(PSN)Silverback73]

On 2018-08-10 at 9:59 PM, (PS4)Darekai said:

This post has been begun out of curiosity for the opinion of both players, and Developers.

Keep it civil.

I'll Reiterate a few facts about the subject to lay the groundwork for people to understand the status quo and then open the discussion:

On Q3 of 2014, Digital Extremes [DE] Sold the majority of its shares to a 3rd party, "Multi Dynamic Games Group Inc." [MDGG], which in turn is a subsidiary of

parent company "Sumpo Food Holdings Ltd" [SFH].  Another 3% was sold to another Company called "Perfect World" [PW], now called Perfect Online [PO] for right to develop games in the Chinese Market.

The remainder is distributed by two ltd ontario branches, and 6.2% retained for an employee trust

Majority Implies greater than 50% or more (E.g. 50.000000001% is majority), in this case it hovers around 58%. Effectivelly making [DE] a Subsidiary of [MDGG] and [SFH] as a parent company.

[MDGG] is an investment experiment of parent Company [SFH], [MDGG] dedicates to the gaming industry, whilst the parent company, [SFH], is dedicated to the Food processing....indu..stry... Mostly processed meat from, and feed for, Poultry and Swine, amongst other food processing, distribution, etc. 

A Subsidiary in short terms, and avoiding international overlap of definitions and commerce laws and regulations on its implementation, is basically:

"a company that is owned or controlled by another company, which is called the parent company, or holding company."

A Holding's Company is a "special" Kind of Company that simply, holds other companies. 

• TL,DR: [DE] Shares where purchased as a diversification of assets exercise by Holding's Co. : [MDGG] a.k.a: [SFH].

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There are Many types of shares, one of them is "sales" Shares, otherwise known as "Class B" Special Shares, which as the name implies, The sharing of Sales (profit/Dividends etc). Another is called the Common shares, these Shares are an indication of "ownership of the company". The Above News reflects, both types of shares.......................

58% of Sales AND 58% of the Company is effectively owned by [MDGG] a.k.a [SFH], the other 39% is owned by Digital Extremes, and more directly by Mr. James Schmalz, CEO of Digital Extremes.

The Purchase was made for Roughly ~73 Million Dollars in Q3 of 2014, and effective Q1 of 2015.

What people may or may not know is that, shortly there after [SFH] "Sumpo Food Holding's co." Droped in its entirety all their assets and businesses for poultry and food, citing, the decay in the economy and food safety, and was reborn solely as a technology company.....now called "LEYOU TECHNOLOGIES HOLDINGS LIMITED" [LTHL]

Shortly thereafter, like less than 30 days, the Acquisition of Digital extremes was made full circle. By the end of Q4 2015, [LTHL] purchased the remaining 39% of Both, Sale and common stock from Digital Extremes for an additional 46.8 Million, Totaling roughly 120 Million, giving [LTHL] effectivelly control over 97% of both the company as an entity, and 97% of the Sales, and revenue.

The Vendors for these transactions was the Ceo and associated ceo family members in its entirety. I presume this was used to cover the closure of any existing liabilities , loans and debt that the company had with other outside investors, but i presume a summable ammount of that remained.

This types of cascading sales and acquisitions are done to comply with the law and prevent hostile take overs and mitigate any negative impact it may have on the vendors and buyers.

so a sale may happen slowly in chunks for this purpose, and of course taxes and legal jargon and ( knock yourself out and insert slew of inumerables in here people).

 

And thus Digital Extremes, and thus in term, Warframe became a Chinese company and property.

TL,DR: [DE] Basically sold 97% of its profit per year, every year and 97% of the company's control, in order to gain investment capital.....................................

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I will reiterate, this is not news, this happened back in Q3 of 2014 and ended by 2015, roughly 3 years ago.

It is very common practice, both by parent companies looking to gain footing on a market that they previously don't have development in,and as a normal tactic by Developing Companies looking for Cash and stability to make their company grow, its a win-win^[1] relationship where developers get immediate money to work with, and investors get dividends and payback as well as penetration to a market that is not easily accessible due to their position.Its also a very common practice by Holding Companies as well.

The topic of discussion is that these relationships can last years, but they are never ever permanent. these relationships are formed when there is a mutual benefit amongts parties. one this reward deviates, and goals start to separate, the relationship terminates. in majority of the cases by the party that has the most control.

For the purpose of discussion we will ignore the 3rd company [PO] wich owns 3% of [DE] Shares and rights for development in china.
Again i repeat, this is not news, this is 3 year old information, but it does provide good background information for the discussion, that is, if this post doesn't suddenly disappear i guess.

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Discussion Starts Here

On any normal partnership, when the relationship no longer works, assets (property), money, and intellectual property are divided amongst the parties involved, like divorces...i guess children are the intellectual property in this analogy....dont think too hard on it.

But this is the special case of a holding's company. These companies can acquire and drop a lot of cash liquidity for struggling companies, by taking on these financial pressures, the smaller company can strive. But because these companies are so far removed, their primary motivation is, cashflow, revenue, revenue growth, and most importantly, Market share (the amount of people buying your stuff instead of other people's stuff). Not, art, nor enjoyment, but profit. Full circle... a Holding's company is Nef Anyo.

when a company hits a creative wall, and  their product becomes repetitive, or old, or boring, the company has only one choice, re-invent yourself or die. Warframe saw some of this in its early years, lack of investors  and incomplete product ideas and so forth, but they kept trying. the Struggle was the path for warframe to be born.

 

Warframe continues to evolve and re-invent itself and do new things, but its not as free as it was in 2013.

its 2018, MR is 25 out of 30, that roughly translates 83% in 5 years. to at most  to 1.2 more years... 2020?

as a general rule for  of product and demand, most tangible and intangible products follow a growth path similar to an arc Tangent function like the one below:

where it takes a while for the product to start selling consistently, then the growth phase, then it starts to plateau. at this point its considered a "Mature product", meaning no new customer volume is expected, only decline.  for way of life products, like for example oxygen tanks, people will keep buying, because they want to stay alive. for all other products, they get replaced, or substituted by newer ones. computers, cars, clothing.....games...

Warframe is at roughly at its 80% stage.  for those that have played warframe since its inception, we can see the light at the end of the current tunnel.the final chapters of the story are currently taking form, and the players are getting ready to approach their reward, their glory after winning the old war becoming the new war.....the ..last war...

the end of the war.

its inevitable that the game is hinting at resolution.

 

As for Digital extremes, i presume they must be working on other future projects and directions or collaborations with other titles ..of course......right?

As of the writing of this post, there is only one other product, currently in development and in collaboration with human head studios called "Survived by":

Here is  picture of the teaser currently displayed on Digital Extremes website, the website for the game and the youtube video for it.

DE Website teaser:

https://www.survivedby.com/

Youtube Video

An Isometric 2d Platformer MMO where knights charge into battles, and if they die... their kin, their successors, their bloodline continues their fight for glory. currently in closed beta, very retro nostalgia...except for one tiny problem... a little game called ...Rogue Legacy..

in 2013  a game called rogue legacy launched, since then it has been distributed to pc, ps3, ps4 and xbox. and the premise is simple....

A  2d Platformer  where knights charge into battles, and if they die... their kin, their successors, their bloodline continues their fight for glory. currently has been released for over 5 years now, very retro nostalgia.. except its not massive multiplayer.. and not isometric..so its...different... im sure there are licencing discussions atm, if there arent, o boi....

this brings me to the parent holding company,

 a lot of foreign game companies tend to focus on either 1 quality game, or, the mass production of volumes of different titles with small development overhead, sometimes rebranded modules with different skins. capture the market with volume, not quality. which is why the apple store and android stores are  plagued with copies upon copies upon copies of platformers and other things that seem to be the same, but different in some insignificant way, but significant enough not to be in legal jeopardy.....for most...i think..

looking at the pattern of [LTHL] over the past 2 years indicates they are of the latter category. shock and awe grab our loot, and disappear into the next game.

I believe this brand does not align with warframe, or with the original digital extremes, i may be wrong....god, i hope im wrong....

but i also hope i am... right.. because that will be the only way Digital extremes could survive within its parent company.

the worst thing that can happen is that, the growth becomes stagnant enough, and the holding company liquidates or sells off Digital extremes to the highest bidder for more groffit, or in the case of liquidation for asset recovery.

---

Open discussion for questions and other facts:

To [DE] Developers:

• Are there any other titles currently not mentioned currently in development or in colaboration? and if so what category would they fall in? B,A, AA, AAA?

• The Sale and acquisition basically guaranteed that the company would continue to operate for the next five years since 2013, in hind sight. In Hindsight,was it worth it? would the same deal be struck again knowing what you know now?
• Out of the 120 Million US dollars that the Acquisition was worth, how much of it was re-distributed to the employees and how much of ti stayed at the CEO level?
• Is there any current litigation between [DE], Human Head Studios, and Cellar Door Games?
• What does Warframe look like after Mastery Rank 30?
• It is clear, to me, that the Arching story for the New war, is the closing chapter of the lotus: Daughter is sent to murder, her identity is conflicted and she rebels against her true nature, only to be swayed back to what she was made for, a tool for destruction. we as players have seen this unfold, conflicted pawns in a story that unfolded before us, and its our final duty to put an end to her suffering and misery. "Absolute power corrupts absolutely","You Either Die A Hero, Or You Live Long Enough To See Yourself Become The Villain". Warframe is a playwright greek tragedy, and the catharsis of this story, is when we the players free Natah from her suffering pain, i cant write this in any other way that doesnt have too much spoilers. any thoughts? your more than welcomed to message me privately if the need arise.

To Players

• What do you think of the Company being owned by a Chinese conglomerate? Did you knew about it?
• How long do you think Warframe will continue to operate? Do you see yourself playing warframe 2 years from now?
• Most Gamers cycle in and out of Warframe^[2] syncronized with the development cycle of new updates. what other games do you play when you get bored of warframe?
• Its been 5 years and we haven't used the light , neutral, and dark mechanic, the moon vs the sun vs the ying-yang in a meaningful way. so far it Changes only how events are perceived, but not necessarily the truth behind the matter. Given, that its my interpretation that the New war is the last chapter of Warframe, how do you think it will impact the finally?

---

In Closing:

Im not quite sure who will read this post, how long will it survive, or if it will be moved and or burried, or even worse, deleted. this post is only posted here, for developers and true players alike. its an honest query with some data, and my limited opinion. I declare that warframe is one of my favorite pastimes for the last 5 years, and here is me hoping that the next year and a half are as interesting as the previous five. My Mindset is that all things have an end, eventually, and there is nothing wrong with that.

For those willing to reply, please keep a good decorum, honesty and respect. all opinions are welcomed as long as they are constructive or inqusitive

Once again thank you for your dedication.I'll Continue to support the developers in any endeavor they are currently pursuing or in the future.

Sincerelly

A Loyal Tenno,  

References

• Original Agreement Q3 2014 SUMPO FOOD HOLDINGS LIMITED:ACQUISITION OF 58% OF THE ENTIRE ISSUED SHARE CAPITAL OF DIGITAL EXTREMES
• Sumpo foods is now Leyou Tehcnologies Sumpo Food Holdings Limited :CHANGE OF COMPANY NAME AND STOCK SHORT NAME Leyhou Technologies holdings Limited
• Aggregated Agreement 2015 LEYOU TECHNOLOGIES HOLDINGS LIMITED: ACQUISITION OF THE REMAINING 39％ OF THE ISSUED SHARE CAPITAL OF DIGITAL EXTREMES
• Digital Extremes website

1. ^{[1]win-win.......sometimes this depends on the eye of the beholder}
2. ^{[2] Warframe User Cycle Data Extrapolated solely from Stream statistics, Never the less its a known  sinusoidal consumer pattern that is, for the most part, correlated to content update, and degrading factors due to interest, and novelty.}

1.  Beyond China-build, DE still owns “creative rights” to the game, which is the Lynch-pin.

2.  Breaking rules and setting new standards since inception.  “We all lift together.”  We’ve been at 80% for about 3 years...with Steve and company rewriting the book and setting us back to 50% each year at Tennocon for 3 years...

[Evanescent]

Warframe is a duck that lays gold eggs. The reason it gets to lay gold eggs is because it's well cared for and let to run around as it pleases.

I very much doubt any of the parties involved would take a knife to said duck or meddle too much with it.

 

[CupcakesMoo]

Yes.. and? 

Also I doubt you will get to keep this thread. 

[(PSN)Darekai]

On 2018-08-12 at 8:41 AM, (PS4)Silverback73 said:

1.  Beyond China-build, DE still owns “creative rights” to the game, which is the Lynch-pin.

Thanks for the Full post quote Silverback73 ^_^.

Just to clarify your comment, the China-Build is Controlled by Perfect World, [PW], which is a Chinese company. This Is because they purchased 3% of the company, and, specified that they also wanted that licencing control in china as part of their portion of the Deal. I must clarify though that the rest of your comment is not necessarily correct.

[LTHL] is another Chinese holdings company, and DE is completely owned by this company. if you could read a the original post again, there are a few bits in there were it makes it clear that: As a Holdings company, especially one with very little experience on game development to say the least, is only interested in the diversification of their funds.

[DE]  as a subsidiary has "Creative Control", For the same reason, children under 18, have "creative Control of their lives" as long as that control doesn't go beyond their parents desires. just like the next poster expressed in an interesting way.

On 2018-08-12 at 12:04 PM, Evanescent said:

Warframe is a duck that lays gold eggs. The reason it gets to lay gold eggs is because it's well cared for and let to run around as it pleases.

I very much doubt any of the parties involved would take a knife to said duck or meddle too much with it.

the subject of this post was not to reiterate who owns what or when it happened. lets be clear on this:

Warframe is a property of Digital extremes, which in turn is a property of [LTHL].  in a different set of terms

Its now a Chinese Company that has Canadian employees.

The point of this post for lack of a better term is this "In this world of reality, even Golden eggs have a shelf life, and This golden egg called warframe, its Natural shelf life is near its end of life, this is a normal process. the discussion is, how soon will this happen. and what will the future of the company be once this proverbial ticking clock reaches zero.

 

P.S. Holding Companies are notorious for selling holdings when they are no longer profitable, sometimes liquidation sales. (like garage sales of sorts).

Edited August 14, 2018 by (PS4)Darekai
somehow the word subsidiary was deleted. wow almost 8k post nice man

[rune_me]

6 minutes ago, (PS4)Darekai said:

The point of this post for lack of a better term is this "In this world of reality, even Golden eggs have a shelf life, and This golden egg called warframe, its Natural shelf life is near its end of life, this is a normal process. the discussion is, how soon will this happen. and what will the future of the company be once this proverbial ticking clock reaches zero.

So despite your incredible long post and your graphs and what not, this turns out to just be yet another "Warframe is dead" or "When will Warframe die?" post like the dozens and dozens of others? It's been asked a million times before. If you want to know what the community thinks about that, no reason to make a new post, just read one of the 50 or so previous ones from this last year.

Time to bring out the bingo card again, I guess.