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The NCsoft quarterly report is now available, and as usual it makes for compelling reading. Net sales are down, expenses up: overall, it's not been a good quarter for the company, but there are positive elements.

A look at the specific games tells an interesting story. Guild Wars shows a sharp drop in online sales, plunging by 46%, which may simply be due to anticipation of Guild Wars II.

Online sales of Lineage and Lineage II, the major earners outside Europe and the US, are slightly down, presumably due to age-related falloff, while online sales of Tabula Rasa and CoX are up, the former jumping by 7%. Though online sales earnings from Tabula Rasa are still the lowest of the named games, bringing in only 2,007 million Won as compared to the 5,743 and 5,096 of CoX and Guild Wars respectively, players will be glad to know they have shown an increase.

Ever since Linage II began allowing server transfers there has been a shift in server populations that was leaving some communities worried. This has prompted NCsoft to announce the merging of a few servers on July 8th to bolster their overall population and ease the growing fears some players were beginning to have about the future of their digital homelands.

Population is of course an important issue for any MMO and server merges can sometimes be seen as a bad thing by onlookers. However, NCsoft is assuring everyone that this choice was made purely to maintain healthy communities, something that is arguably one of the most important aspects to an online game.

We're also happy to see that NCsoft is covering all their bases and has made an official forum post covering all the important topics about the server merges. If your concerns aren't met by the current forum post don't worry too much. NCsoft has vowed to answer any concerns or inquiries regarding the merges over the coming weeks.

[via WarCry]

MMOs are fun. Our hope is that you feel that way, otherwise you wouldn't be reading the site. That said, they can get a little same-y. You play the same game for long enough - hours and hours of time - and you want something a little different. The Lineage 2 update Hellbound just recently dropped onto the live servers, and yesterday the game celebrated its fourth anniversary. In honor of these events (and to shake things up a bit) the folks at NCsoft sent over a dev diary all about the additions to the Transformation system.

Essentially, players who want to play the game at a bit of a different angle will have the opportunity to do so. The Kamael update introduced this system, which allows players to collect forms reshape their characters for a limited amount of time. Hellbound added new high level transformations to the game, including some extremely rare transforms you'll need to raid to obtain. Among others, this new category includes the ability to transform into some of those same monsters you'll be raiding against - like Ranku or Kenchi. For full details on the system and its newest additions, read on below the cut.

Our friends at NCsoft have informed us that the next Lineage II expansion, titled Hellbound, is on the way. This will be the final chapter of the First Throne, and will continue on from the last expansion The Kamael which was released a few months ago. Headlining the features for Hellbound is a raise of the level cap to 85, as well as new high-end content culminating in a raid boss, Beleth (pictured).

We were invited to check out Cartoon Network's upcoming kid-focused MMO FusionFall, and while clearly still in development, it shows a lot of potential. Developed in part by Korea's Grigon Entertainment, makers of Seal Online, QRing, and Gambledon, this is a title with a great deal of pedigree under the hood. Among the notable names on this project are Sam Lewis, former systems and content designer for Star Wars Galaxies; Robert Knopf, recently of Ultima Online; and Richard Weil, the community relations manager for many MMOs, including City of Heroes/Villains, Lineage I and II, Tabula Rasa, and Auto Assault.

With so many experienced and creative people behind it, FusionFall definitely stands to make a splash in the 8 - 14 year old demographic that Cartoon Network is shooting for. This isn't to say they don't have a few challenges ahead of them, however. We'll explore this, and show you the trailer, after the break.

Lineage
[Worldwide]: 1,049,763 subscriptions (down 93,936 from Q3)
[North America]: 6,414 subscriptions (down 585 from Q3)

Lineage 2
[Worldwide]: 926,570 subscriptions (down 4,693 from Q3)
[North America & Europe]: 79,986 subscriptions (up 943 from Q3)

City of Heroes/Villains
[North America & Europe]: 136,250 (-3,063 subs from Q3)

Guild Wars
[North America & Europe]: 4,878,000 boxes sold (+378,000 from Q3)

Subscriptions continue to decline, but the impact isn't very noticeable unless you look at the loss over a greater period. Over a million subscriptions have been lost since the Lineage franchise peaked. No exact subscription numbers are given for Tabula Rasa, but an educated guess is discernable with the available projections given by NCsoft's CFO Lee Jae-ho. Tabula Rasa's given projection stands at 16 million for 2008. Its subscription fee is the standard $15 a month, added up for the year that amounts to $180. 180 into the projected 16 million and you get 88 thousand users.

NCsoft's corporate monkeys released their sales numbers yesterday, showing off a solid net profit of $48.4 million, an increase of over 18% last year. Something has to be said for NCsoft's execs like new President Chris Chung, as the company was able to post a strong increase in profit, even as global sales dipped 3% since last year to $355.1 million. Sales for the crucial fourth quarter were up however, jumping 11% to $95.9 million on strong sales from the Lineage series and the launch of Tabula Rasa in November.

Korea continued to be NCsoft's dominant market, accounting for 59% of global sales, as compared to the 17% attributed to North America. This, of course, would account for the fact the relative success of the various franchises. Lineage and Lineage II, which are still wildly popular in Korea, ran sales of $34.2 million and $36.4 million, despite their age. Tabula Rasa, a title ostensibly aimed at the North American market with it's sci-fi and shooter fascinations, saw relatively meager sales of $5.4 million since it launched in November. This is further proof that the Asian market is simply too big to ignore. Companies looking to break Blizzard's grasp on the market may do well to look abroad.

Ladies and gentlemen (both of you) and all the rest of you hooligans out there, it is time, once again, to probe into the mind of the all-seeing, all-knowing, all-too-willing-to-make-it-up -as-he-goes-along Swami of MMO arcana in this week's "Ask Massively." In this column, you will not find the words "World of Warcraft" or "Second Life" outside of the confines of this paragraph. By the way, to those of you, and there were many, who asked "Why does Massively talk about Second Life so much when it isn't an MMO?" I have three words for you: Twelve million users. Any game that has so many accounts attached to it, whether or not it fits the standard mold of an MMO, qualifies as "Massive" and I daresay that there is more roleplaying going on in SL than there is in WoW.

Now that we have that out of the way, I promise that there will be no further mention of those games after the jump.

As always, if you would like to have your question answered for all the online world to see, feel free to post a comment at the end of this article, or stop by our tipline and let us know what's on your mind.

Robert Garriott, the soon-to-be former President of NCsoft North America, dropped a "State of the Union" style press release yesterday regarding the massive online gaming company. It's a brief but insightful rundown detailing what they've done with their Intellectual Properties (Tabula Rasa, Guild Wars, City of Heroes, Lineage, Dungeon Runners, etc.) in the past year, and what they intend do with them in the coming year. Garriott also mentioned new projects they're working, like AION: Tower of Eternity, and the recently signed pact with Sony where NCsoft will be producing products for the PlayStation 3. While no details were given on exactly what those products may be, Garriott said the first one should be released by the end of 2008. This new deal includes porting "existing titles in interesting new ways or utilizing new IPs." Hmmm, intriguing.

Of particular interest to me was Robert's comments regarding the City of Heroes property. Back in early November NCsoft acquired the entire IP from Cryptic Studios - lock, stock and two smoking blaster barrels. Like wildfire the CoX forums were consumed by doomsayers and speculators decrying that this was the beginning of the end. Not so. According to Garriott, they loved the property so much they wanted to re-invest in it, and the best way to do that was to buy it. Since then they've created a whole new studio (NCsoft NorCal) and hired the entire CoH development team. If that wasn't enough to give even the most cynical gamer a glimmer of hope, they're currently hiring more people to take CoX to a "whole.. nutha... level."

Last but least... as reported yesterday, Robert Garriott will be leaving his post as President of NCsoft's North American business and moving into a role of global business development and planning. Taking his place will be NCsoft's current vice president of worldwide product development, Chris Chung, who has been with the company for some time. The change will take effect on January 1, 2008.

A Happy New Year indeed! All in all, I'd say the future looks very bright for NCsoft.

To North American and European MMO players, China is more than just a different country; it's a different universe. But it's important to keep an at least one eye on the Chinese market. Gamasutra ran its latest "China Angle" column today. Here's what we learned this time.

The9, the Chinese publisher of World of Warcraft, will be responsible for the Chinese version of EA's FIFA Online 2. The9 already operates the original FIFA Online in the PRC, and EA owns a 15% share in the company, so that's no surprise.

Newer company Giant Interactive -- who are behind the highly profitable Zhengtu Online -- saw a $38.7 million profit in Q3 2007, and all 800 employees of the company were given actual, real-life gold coins in celebration. The company is also actually awarding stocks to some of its customers.

Finally, Korean MMO supercompany NCsoft has selected a new partner company called Shandra to distribute their new title AION. NCsoft opted not to work with their old partner Sina this time. The decision to change may have been influenced by disappointing Chinese numbers for Lineage and Lineage II, two NCsoft titles which were brought to the Chinese market by Sina.

If ever there was an industry prone to cannibalism, it would be the games industry. If gamers aren't playing one game, chances are it's because another game has captured their attention with its siren song. According to data by Xfire and reported by Gamesindustry.biz, hours played by subscribers to its service did not pick in October as expected. July and August are typically slow months for PC games, as many players take the rare opportunity to go outside and many also make the move to college during that period. But instead of rising again as the seasons changed, October numbers actually continued to fall. They've chosen to dub this the "Halo 3 effect," as Microsoft's hit shooter sent shock waves not just through the game industry, but through the larger entertainment business as well, reportedly stunting sales of moving ticket sales through that period as well.

Xfire has a subscriber base over 8 million strong, so while they might not be the perfect indicator of larger trends in the game industry, they're certainly one of the best representative samples available. World of Warcraft continued to dominate the overall numbers, with 332,139 hours played during October, beating out perennial PC favorites Call of Duty 2 and Counterstrike: Source. The rest of the MMO crowd ambled behind, with EVE Online being the second most popular massive game, followed by Lord of the Rings Online, Lineage II, and Star Wars Galaxies.

It makes you wonder what would happen if the rumored Halo MMO comes to fruition.

Lineage II, as mentioned before, has much to recommend it if you're fond of PvP MMO content. One of the things that we thought was pretty cool about Lineage II is the updated version of castle sieges -- and the maneuvering involved in keeping a castle -- brought in from the original Lineage game. Here's a bit more on that from the L2 site:

Numerous privileges are given to the clans who occupy the castle. They impose a tax on the shops around the castle, expand the facilities within the castle, manufacture various items, and offer the Castle Lord a Wyvern to conquer the sky. There are various systems in which the castle-owning clans operate and maintain many public facilities used by other players to make a profit. In this structure, the players and the clan who occupy the castle get win-win results through systems like the manor system. Even the clan that is strongest in force cannot maintain political power without support from other players.

For our second and final Lineage II giveaway of the day, we're offering up a copy of Lineage II, as well as 2 60 day L2 time cards. This gives both new players and experienced players alike the chance to get involved in some good old-fashioned castle warfare in the lands of L2. All you have to do to enter is to leave a comment between now and 8:15 PM Eastern tomorrow (11/15) and be 18+, a U.S. resident, and eligible under the other official rules. For the chance to get some serious PvP on -- or possibly ride a wyvern -- we think a comment is a good trade!