Eve Online possesses one of the most passionate and hardcore fan-bases in gaming, but developer CCP unfortunately still suffered from significant issues in the past fiscal year. The developer is reporting losses in the region of $21 million, which are related to the recent layoffs and cancellations at the CCP Atlanta studio.
News broke Monday that 56 CCP Atlanta employees would be losing their jobs and the studio's vampire MMO project World of Darkness was being cancelled.
CCP had reported a profit of $4.6 million the previous year, meaning any operating loss would have been a step backwards, let alone one so significant. Revenues actually rose for CCP from $56.3 million to $76.7 million, but they could not offset more significant expenses.
A sharp rise in R&D investment is the culprit for the highly increased spending: it shot from $16.5 million in FY 2012 to $56.5 million in FY 2013. This can be attributed to multiple aspects of the company such as Eve Universe properties, but most is expected to have been caused by the cancellation of World of Darkness.
A segment of CCP's financial report supports this theory, explaining that the removal of the asset value of World of Darkness would show up as increased R&D cost:
"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. 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."
Source: Games Industry