We Never Learn: Another Example

Over at Joystiq we find that EA is setting the bar for success (and failure) for Star Wars: The Grand Ol’ Republic:

Sterne Agee analyst Arvind Bhatia recently visited EA to check in on the progress of the company’s upcoming, cutscene-driven MMO, Star Wars: The Old Republic. He reported that “earnings are somewhat depressed” due to the development costs for the game, but EA management is hopeful that they’ll recoup this cash when the title brings in over two million subscribers. He added that, at the very least, the game needs over one million players in order for EA to break even.

Wow.  I seem to be saying that a lot about MMO news today.  Wow.

So, as with Warhammer Online, EA has drawn a public line in the sand.

Success is not possible without more than “One Meeel-yon Subscribers!”

1 million times $15 a month times 11 months (assuming you get a month free with the box) plus box sales (call it $40 a box, though $60 wouldn’t surprise me) plus, I am sure, some sort of cash shop.  Gross sales ought to be over $200 million if they get that million and keep them for a year.

Of course, you then have the retailers part of the box sales and ongoing operational costs.  Plus George Lucas is going to have his hand out waiting for his cut, and there is a man who gets paid no matter what.

I wonder how much they’ve spent on the game?  I wonder how soon they want to get their money back?

So everybody will be watching the box sales and EA’s quarterly report to see if The Old Republic is a success or a failure.

Not that it won’t be a success.  It ought to be.  But making public the metrics that determine success is always a risk.  900,000 players will automatically be a “FAIL” now.

And, as a final thought, is anybody else disturbed by the phrase “upcoming, cutscene-driven MMO?”  That certainly isn’t selling the game to me.

14 thoughts on “We Never Learn: Another Example

  1. Armagon

    I’d be much more interested in the amount of people for whom this “cutscene-driven MMO?” would be totally uninteresting if it wasn’t set in the Star Wars Universe.

    Like I gladly skipped STO – for the universe AND the studio, I’m probably grabbing SW:TOR and giving it a one month chance.

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  3. UFTimmy

    I thought the same thing when I saw the cut-scene part. Ugh.

    I want to play. I don’t want to watch.

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  4. SynCaine

    I saw the post at Massively and thought the exact same thing. 1.5m subs and all anyone is going to be saying is “man SW:TOR is such a failure”. Dumb, especially because (IMO) WAR had a better sounding foundation than SW:TOR does (RvR vs Cutscenes?)

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  5. Rob

    Why was I under the impression that SWTOR was a free-to-play? If thats the case, then I could easily see them with one million players, but this says one million subscribers. While I am facepalming at this, I do think that if ANY IP could pull this off it would be Star Wars. And BioWare are no slouches when it comes to quality game developers. I have never seen them do an MMO … but they do seem to have a good team over there.

    All of that said, the cynic in me is sure this will disappoint EA.

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  6. Sleepysam

    Debate the goal all you want, but don’t they have a duty to their investors to disclose at least some level of information regarding their expectations?

    That said, it will be hard to resist not at least checking this one out – is there any way we can just play the trailer?

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  7. Wilhelm2451 Post author

    @Sleepysam – Admittedly, it is a double edged sword. As a public company they do have a responsibility to accurately represent their financial situation. But they also have a fiduciary responsibility to not make statements that will harm the company now or in the future.

    They are not under any requirement to say “we need X subscriptions for success” and the harm it will do the game and the company should they fail to make that number should be weighed carefully before making such a statement.

    This is, of course, all independent of whether they can actually pull in the subscriptions base they will need. I’m just rolling my eyes about them mentioning a number a good year in advance of the release.

    @Rob – There were some odd statements about the business model at some point in the past. I’ll have to go look at Massively to see what it was.

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  8. Sleepysam

    “All of this has happened before, all of this will happen again…”

    This post reminds of the BSG theme.

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  9. Spectre

    I don’t know why you guys are surprised by the cut-scene comment. Ever since it was announced, Bioware has been touting how their defining feature is the 4th pillar of story. They have also constantly been saying that SWtOR was basically KotOR 3, 4 and 5 all rolled into one game. Everything about what I have seen and heard screams that this MMO will be very story and cut scene driven.

    Just to back that point up with one last thing, I went to PAX 2009 in Seattle last year and attended the SWtOR demo they did. One of the sequences they showed was of two players doing a quest on a ship. When they got to the end of the quest, they were presented with a cut scene where you talk to the ships captain, alternating who gets to talk between players, and the decision(s) you make determine how the rest of the quest plays out. I really thought it looked cool and I look forward to seeing how else they utilize it.

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  10. Wilhelm2451 Post author

    @Spectre – I’m not so much surprised by the idea of story and cut scenes as that EA let an analyst walk out of there calling the game “cut-scene driven.”

    My lack of respect for industry analysts is huge, so I have trouble picturing any analyst using a term like that unless it had been spoon fed to him. But that makes no sense. Story is what will keep people, but some mention of action is required to get us there in the first place.

    Cut-scene driven sounds like a space movie, like Final Fantasy goes to the stars. Good for some I suppose, but is it Star Wars?

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  11. Bhagpuss

    I’m so glad I have no emotional investment in Star Wars because this looks like a terrible direction for MMOs to lurch towards.

    I think Dragon Age cured me of any lingering loyalty I might have to BioWare so I am happy to wait until well after launch when I can see what this weird hybrid actually plays like before I commit any time or money.

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  13. Tesh

    There’s also the notion that relying on subscribers to make financial goals is asking for WoW to eat your lunch. Inertia is huge in the sub model, and that’s firmly in Blizzard’s territory. Not to mention that they didn’t bother noting how long those players would need to be subbed for.

    Financial goals based on box sales are more easily quantified, and if your business model is based on them, you don’t have to trust to inertia. I’m going to be very curious to see how Guild Wars 2 pans out in the old “we made a profit” game.

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