CCP CEO Hilmar Pétursson, EVE Online, and the Economy


Hilmar Pétursson, EVE Online, and the Economic Crisis

Amidst the chaos of the global economic downturn, Iceland has been hit particularly hard: the small island nation – home to the headquarters of EVE Online developers CCP – effectively went bankrupt earlier this month. CCP CEO Hilmar Pétursson was quick to reassure EVE fans that the company was going to weather the storm in a post on the official site, saying that the people of Iceland were “sturdy and tenacious by nature.” The country (and company) were “full of tough people, the rest died off centuries ago.”

Pétursson found a few moments to chat with me about how he thought the financial shakeup at home and abroad might affect the future of CCP and EVE Online . While he certainly recognized the gravity of the situation, his views were, as a whole, optimistic: “The service we have to offer is very economically resilient,” said Pétursson. “Paying $15 and playing as much as you want within a given month is a very strong value, especially compared to the price of a movie ticket.” He believes that MMOs will be inversely affected by the economic crisis – people will be more likely to spend time online and in-game than watching TV or going out to the movies – and their own internal data has supported that, with people playing more frequently than they used to. “As long as we keep up our end of the bargain,” he continued, “they’ll be able to continue that.”

Since the launch of EVE , CCP has continued to grow along with the game, swelling from a group of just 35 people to a team of more than 300. With the value of the ISK (the Icelandic krona, not the EVE in-game currency) plummeting against other currencies, I asked Pétursson whether or not the company – whose Iceland-based employees are paid in ISK – could continue to grow. Pétursson acknowledged the problem, with CCP employees suddenly faced with salaries worth a fraction of what they’d previously been in the global sense. Still, said Pétursson, they were “committed to CCP and to EVE . We all understand that it will be difficult in the short-term, since the situation in Iceland is so volatile.” Still, it was something that the company was in a position to weather, and though they understood that the days immediately to come might be rocky, prospects for the long run were good.

Nor was it just the native Icelanders who were “sturdy and tenacious,” he elaborated. The members of the CCP team who had uprooted themselves and moved to Iceland shared that same core resiliency, Pétursson believed. Even though the other CCP offices around the world hadn’t been hit quite as hard as the headquarters in Reykjavik, the company culture had survived.

While the global nature of the company made it more resilient against the fall of the ISK, it also meant that the company would not likely see as much benefit from having much of its revenue in foreign currency – which has practically tripled in value against the krona. Yes, the company’s costs in Iceland were mostly in ISK, but with offices around the world, they had expenses in many other currencies as well for server upgrades and the like. Still, Pétursson explained, he viewed the company’s global status – and the diversified, multifaceted nature of its employees – as something that made it more suited to tackle economic issues.

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In some ways, Pétursson actually believes that what CCP does – managing the hundred-thousands-strong world of EVE – was another leg up on dealing with the financial crisis. While the economic downturn hadn’t yet affected the in-game markets (and probably wouldn’t ever) since the two were entirely decoupled from one another, an economy was an economy. In having to manage their own micro-economy in EVE , CCP employees had a “key sense of what’s going on in the world” as the financial system struggled to adjust. In fact, Pétursson said that they’d seen various analogies between the situation in Iceland and situations that they’d seen in the game – and that they had PhD-holding economists on the team who could see clear parallels between the real world and the virtual world of EVE as far as the economy was concerned.

It was clear that Pétursson was confident that CCP and EVE would weather the storm, and that the economic crash would result in few subscribers calling it quits. However, while their data showed existing subscribers playing more often, I asked Pétursson whether or not he believed that EVE could actually gain subscribers: could the game end up growing during the downturn, or would it just not shrink? Pétursson does think that the game will gain subscribers – provided that CCP does what it’s supposed to do. “Our challenge is to explain the value of EVE to people who haven’t heard about it, to people who don’t know about it,” he answered. “It’s not the easiest game to explain, but we’re getting better at it.”

“We stand a good chance at getting more people to play the game,” continued Pétursson, since more people are “looking for an escape to life as it stands today.” After all, “during an economic downturn, entertainment rises.” Though he hated to draw the parallel, he pointed to the Great Depression, where hard times resulted in the growth of Hollywood.

Though the days ahead would likely be rough for the CCP family, the short-term was their focus right now, said Pétursson when asked about how the crisis might affect the development of the new expansion Quantum Rise (as well as long-term initiatives like walking around in stations). “The natural tendency for all companies is to focus on their core business when the economy is weakening,” he explained, and they were no exception. “CCP is laser-focused on the short-term and mid-term development processes.”

This focus on the short-term naturally meant that long-term projects and ideas would be reduced in priority, which Pétursson noted was simply common sense in a situation like this; it was a move that any smart company would implement to stand strong during an economic downturn. With a chuckle, though, he said that the benefit was that EVE would only get “more awesome,” and that people “will be surprised what we release in the upcoming months – but you have to come to Fanfest!” (Incidentally, we will be going to Fanfest in Reykjavik from November 6 – November 8, so keep an eye out for coverage!)

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