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SWTOR Update 1.5 – A New Hope November 16, 2012

Posted by Wilhelm Arcturus in entertainment, Star Wars: The Old Republic.
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…our Free-to-Play option has arrived! For players who want to experience the dynamic world of Star Wars: The Old Republic without committing to a monthly fee, there is a truly viable option to experience all of the incredible content the game has to offer. Free-to-Play players can now play all eight classes up to level 50 without committing to a monthly fee.

We also now have our Cartel Market up and running so players can purchase unique items like the Gamorrean Axe or Cartel Packs that hold fantastic treasures such as the Kowakian Monkey Lizard and the Overlord’s Command Throne, in addition to allowing Free-to-Play folks the opportunity to purchase unlocks for Free-to-Play restrictions .

-From the Producer’s Letter for Game Update 1.5

So there it is, Star Wars: The Old Republic has now joined the rebellion against subscription-only MMOs.  They announced it back in August, but now the plan is in place.  They have turned off the subscription requirements computer and are going to let the economic force of free guide their path.

Free on their main page

This, along with their plan for regular content updates every six weeks (has anybody been tracking that?) is the plan to keep the game afloat.

I obviously have no real insight into the economics of the game, but the number floating around was “500K,” as in “the game needs 500K subscribers to be viable.”  And I find it difficult to believe that this move will give them the cash flow they are looking for.

Of course, I remain dubious of free to play in general, so you have to take what I say on the subject with that in mind.

While I like the idea of not having a subscription running for games I may only play occasionally, what the conversion does to games,  how the economic model forces them to throw some garish new shiny things in your face every other week, does not endear the model to me.  It tends to drive me away.

Anyway, we shall see what the future holds for SWTOR in the free to play galaxy.  Will it be a new hope, or just a false hope?

Certainly, less likely scenarios have come to pass in the Star Wars universe.

Comments»

1. NoAstronomer - November 16, 2012

Nice title.

I expect SWTOR will tick along, maybe pull some financial trick to restructure the debt-load. Who knows maybe one day I’ll even unwrap the copy I got for christmas last year. After all it’s not a *bad* game.

Mike.

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2. pkudude99 - November 16, 2012

Now that it’s F2P I’ll probably log in from time to time. . .or I would if my authenticator hadn’t gone missing. I know exactly where it was in late August, but then I put it away and my wife went on a cleaning jag and the drawer it was in got “reorganized” and. . . . . . tbh, I cba to to call their customer support to remove it from the account, so. . . . . I guess I won’t ever log in to SWTOR again. Unless the fob turns up again. Then perhaps.

But if that ambivalence doesn’t tell you that the game was a nice diversion, but not really that compelling a gameplay experience to me, then I don’t know what will.

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3. Wilhelm Arcturus - November 16, 2012

@NoAstro – Thanks. I didn’t have much to say, but felt I ought to note the transition since SWTOR going F2P has been declared the death knell of subscription MMOs, and thus theoretically impacts all MMO players. So I loaded up on as many Star Wars-esque quotes as I could manage.

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4. Carl Rooney - November 16, 2012

For me SWTOR is one of the great game I ever played.. they put lot of things with the new update to drive more players to play. According from what I read about SWTOR Patch 1.5 lots of updates and missions are added. I knew for a fact that they will turn to Free-to-play sooner as what SONY did in EQ2 and Lotro.

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5. Wilhelm Arcturus - November 16, 2012

I just want to point out that the comment above, which appears quite favorable when it comes to SWTOR, had links embedded in it to an RMT site selling SWTOR in-game currency. So, yeah, somebody is invested in SWTOR.

I removed those links, but left the comment solely based on its English language usage.

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6. Yeebo - November 16, 2012

I’ve been playing SWTOR since it launched and I’ve been having fun with it. However, I just got my second character to the cap and I feel that I’m pretty much done with it at this point. I would have been cancelling my sub regardless this month or next month. The timing of the Ftp switch is good for me, it’s nice that I won’t lose access to my characters now.

While I do have some sub time left, I need to try and figure out what things I want to unlock so they will be grandfathered in.

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7. Toxicroach - November 17, 2012

I dunno. Depends on the content updates. You could add a few drops or a couple of quests to an already existing area pretty cheaply. 500,000 people in F2P should be an easy enough number to manage, especially with the Star Wars IP.

I do think SWTOR failing like this is the death knell of the sub model. If a game that is by all accounts quite solid, and backed by the Star Wars intellectual property, can’t even come close, an investor would have to be insane to give a game 100 million and hope that this MMO will be the Keanu Reeves of MMO’s that will finally break WoW. Fool me once, shame on you, fool me for the 10th time, shame on me.

It’s almost like WoW is a fad, and once it’s gone the genre will slink back into the obscure depths of the internet where it came from and ultimately belongs.

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8. Wilhelm Arcturus - November 17, 2012

@Toxicroach – Well, it needed 500K subscribers to stay afloat. That has to translate into a lot more F2P users I think.

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9. Yeebo - November 17, 2012

That number is practically meaningless because no context was provided. Did they mean 500K steady subs for six months or ten years to break even? They have had close to 500K subs for nearly a year. Whether that means they are in the black or gunning down excess developers in an alley I couldn’t say.

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10. Fnord - November 17, 2012

Did it need 500K subscribers to stay afloat, or to recover the initial investment and be profitable? There’s a significant difference there, and if it makes money going forward it might be worth keeping open even if it’s unlikely to recoup the sunk development costs.

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11. Stabs - November 17, 2012

SW MMO #3, A New Hope.

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12. Wilhelm Arcturus - November 17, 2012

@Yeebo – No, actually, that number is not meaningless at all. It came straight from EA during an earnings call and was clearly in the context of keeping SWTOR a viable, ongoing, self-supporting property at its current level of operation. They need that many subscribers all the time to keep going.

There is no “paying off” the game, as that is not how business works. People keep obsessing about that. It is a complete non-issue, except in how it will impact plans for future projects at EA. That money has all been spent and written off in past financial periods. All that matters now is that SWTOR generates enough revenue to sustain itself, pay Lucas (now Disney) its cut, and make some profit to fund the next project on the list.

To get there, they have said they need 500K subscribers. They had more than that up until this week when they went F2P. I have no idea how many people playing they will need to make their mark under that model, but I suspect it will be a lot more than 500K.

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13. bhagpuss - November 17, 2012

It’s like the business I work in (retail bookselling) where there is as much if not more concern over “market share” than how much money we make. Keeping a large business running is an arcane process, completely beyond my comprehension.

If the failure of TOR killed MMOs (subscription or otherwise) why are there ten million of them in development and new ones announcing every two seconds? You don’t have to make money to make money – has no-one ever seen “The Producers”?

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14. Toxicroach - November 18, 2012

It’s killed the 100 million dollar WoW killer. I looked up a list of MMO’s in development, and aside from a Final Fantasy game and Planetside, most of them sound very very niche.

http://www.mmorpg.com/gamelist.cfm/show/development/MMORPG-Games-in-Development.html

I don’t think MMOs will go away, but I think the interest of major game companies in dumping huge amounts of money will go away. Future MMO’s will be done on a budget that reflects their actual commercial potential rather than a pie-in-the-sky dream of replicated WoW.

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15. Wilhelm Arcturus - November 18, 2012

@Bhagpuss – I don’t think anybody said SWTOR killed MMOs. Smed was out there saying it killed subscription MMOs, and it will certainly make people think twice about big budget MMOs.

How many of those 10 million MMOs you quote fall into either of those buckets?

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16. Yeebo - November 19, 2012

I find it incredibly hard to believe that SWTOR would need 7.5 million a month is sub revenue to run their servers and support the positively anemic pace of ongoing content development, even taking into account whatever it cost them to make the FtP switch.

The 500K users to “break even” originally came from a pre-launch (Feb 2, 2011) interview that included discussion of about how much the game cost to develop:

http://www.gamasutra.com/view/news/32784/EA_Old_Republic_MMO_To_Show_Profit_With_500000_Subscribers.php#.UKqpOoZ0jt0

From the Gamasutra article:

“While EA says it is incurring “significant development costs” for its Star Wars-themed MMO The Old Republic, the company says those costs could turn in to significant profits with relatively moderate subscriber numbers.

“At half a million subscribers, the game is substantially profitable, but it’s not the kind of thing we would write home about, EA CEO John Riccitiello said in a Gamasutra-attended conference call accompanying EA’s third quarter fiscal earnings report today.

It was this original mention of the 500K that I was referring to. This was also a time when a lot of bloggers were claiming that SWTOR cost 300million to half a billion to develop. John Riccitiello was trying to debunk those claims, without actually admitting how much they did spend. From later in the interview:

“There’s been a fair amount of talk on various blogs describing [Old Republic development] spends that are vastly higher than anything we’ve ever put in place,” he said.

I believe they when they mentioned 500K in the the August report, EA was simply referring investors back to their previous statement (i.e., “mentioned break even point”), which was in the context of development costs. And again, that original statement had so little detail it was pretty much meaningless.

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17. Wilhelm Arcturus - November 19, 2012

@Yeebo – But they brought attention to the 500K number directly in the August call and drew a line in the sand with it yet again. For whatever reason, that revenue point was/is a magic number for them. Trying to dismiss it as meaningless seems disingenuous since there was no reason for them to repeat it unless it had some real meaning.

We cannot explicitly explain ~why~ that is the magic number. I suspect that, in a company as old and as experienced as EA… at least in high tech terms… they have a model that X investment should yield Y dollars, and the moment we get to Y-1, our money is better spent elsewhere, and that, for SWTOR, Y = the net revenue from 500K subscribers.

To look at another company, NCsoft isn’t shutting down City of Heroes because it is not making money. They are shutting it down because they feel that the resources it does consume could be used to make more money elsewhere. It is the way that allegedly mature companies operate.

That sort of thinking can be a trap. I have worked for companies that have failed solely because they had a couple of very profitable product lines and could never achieve the same margins with new lines and could not bring their planning in line with what was essentially a new reality. Everything was a failure because it didn’t match the the profit margin we made on product X in 1994. I wonder, for example, if Blizzard could ever make another “successful” subscription MMO in the shadow of WoW.

Keeping servers on as long as there is money to pay the electric bill, as SOE does with PlanetSide, is the exception in business. And keeping the EQ Mac server on for free… that is at right angles to reality in accounting.

Anyway, we will see how F2P changes things, if it leads to more content or more layoffs. My only real objective in bringing up that number was to point out that they had more subscriptions than that, so they were still in whatever desirable zone they needed to in, but now, with F2P, that dynamic changes. You need a lot more players when you are depending on people to buy from your cash shop.

Or you need to make “free” so unplayable that people subscribe… without annoying your potential audience to the degree that they walk away in disgust.

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