Funcom's CFO Resigns Post

Norwegian developer Funcom took another hit this month with the resignation of its CFO Olav Sandnes and the impairment charge on its slightly increased Age of Conan profits. Sandnes left wishing "Trond Aas and the rest of the organization all the best in realizing the full potential of the Company."

Gamasutra.com reported that the company's revenues increased from $1.2 million to $8.7 million from the same quarter last year, but an ongoing impairment charge of $22.8 million will take a major hit off its bottom line profits.

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Definition:

A specific reduction on a company's balance sheet that adjusts the value of a company's goodwill. Due to accounting rules, a company must monitor and test the value of its goodwill, to determine if it is overvalued. If it is, the company must issue an impairment charge on its balance sheet, to take into account the reduced value of the goodwill.

Age of Conan's value within the company's assets and stocks was bloated and thus a the company takes charge the essentially writes off the supposed value from its bottom line.

More info here: http://www.investopedia.com/articles/analyst/110502.asp

Correction: self-pwn

It's a sad affair to be honest, and will scare funding and venture capitals towards MMO projects regardless of who to blame. The damage is done.

If you recall, before the release and beta, the market expectations for AoC were through the roof. The company attracted tens of millions in investor cash based on future revenues, which now we know is bust.