Background
Funcom reported in a stock notice the 6th of July 
that the company intended to update the market on The 
Secret World today. This update is based on current 
sales, press and gamer feedback and early indicators 
of subscription levels following the free 30 days 
game-time included in the game client.

Development since launch
Following the launch of The Secret World on the 3rd 
of July 2012, Funcom's share price has decreased 
significantly. The company attributes this mostly to 
the aggregate review score, the "Metascore", for the 
game at MetaCritic (www.metacritic.com) together with 
other public sources for tracking the performance of 
games.

While there are very positive reviews, there are as 
well mixed or average reviews from various press 
outlets, giving an aggregated score for The Secret 
World of 72 out of 100, which is to be considered 
low, and not in line with the positive feedback 
received during the beta phases from both press and 
players. Funcom is of course disappointed with 
achieving such a Metascore. A game like The Secret 
World, which is not based on a well-known brand, is 
normally dependent on positive press reviews to 
achieve successful initial sales, in addition - but 
not limited - to other factors like word of mouth.

Scenarios for The Secret World for the first 12 
months following launch
Funcom has on several occasions presented two 
financial scenarios for the first 12 months following 
launch of the game; please refer to page 17 in the 1Q 
2012 presentation *). Funcom does not consider it 
likely that either of them will be met. 

To improve sales going forward, Funcom is currently 
enhancing distribution by launching the game on the 
Steam platform as well as focusing on key areas for 
improvement of the game and on-going activities on 
content updates, sales initiatives and communication. 
The effect of all these initiatives together with 
other factors impacting sales are difficult to 
predict, but based on the available early data, one 
scenario is that sales for the first 12 months 
following launch will be less than half of what was 
presented in the "Conan-like" scenario. It should be 
noted that the sales amount in the "Conan-like" 
scenario is significantly higher than for the 
game "Age of Conan", due to the assumption of better 
retention implemented in the scenario. Also it should 
be noted that the company has significantly lower 
operational cost for The Secret World than what was 
the case for Age of Conan. 
As less initial sales than expected is considered an 
indicator of impairment, the company is currently 
evaluating the need for recognizing an impairment 
loss for the game in the profit and loss statement.

Retention
Funcom is pleased to see that gamer satisfaction is 
high, with user score of 8.4 out of 10 and higher on 
www.metacritic.com and other sites like mmorpg.com. 
This is in line with the beta surveys and beta 
players' feedback that the company received prior to 
launch. The company considers this a positive 
indicator of high customer satisfaction, and a solid 
foundation to build on the positive and engaged 
community Funcom has established with The Secret 
World. 

First indication of churn is more positive than for 
Age of Conan, and the in-game store is performing as 
expected. The add-on packs are performing better than 
expected. Also higher than expected sales are going 
directly through the online download stores like EA's 
Origin and Funcom's own storefront, generating more 
profitable sales for the company.

A possible scenario going forward is that the game 
will sell less than both of the two above mentioned 
scenarios the first 12 months following launch, but 
with high customer satisfaction, it will generate a 
more stable subscriber base than the game Age of 
Conan. Over time, this will enable Funcom to retain 
more customers and generate higher revenue.

Immediate cost-adjustment initiatives
Funcom is currently implementing several cost-
adjustment initiatives due to the expected lower 
initial revenues from The Secret World to secure 
future positive cash flows.

Next update
The next update of The Secret World will be given in 
the 2Q 2012 report to be published 28th August.


Badhoevedorp, The Netherlands, 10th August, 2012
Funcom N.V.

This information is subject of the disclosure 
requirements acc. to §5-12 of vphl (Norwegian 
Securities Trading Act)


*) Funcom 1Q 2012 presentation:
http://www.newsweb.no/newsweb/search.do?
messageId=306223