by Stacy Jones on Nov 30, 2011
Bobby Koticks recent comments to Reuters indicated that he doesnt believe that Star Wars: The Old Republic will be beneficial to EA stating, We've been in business with Lucas for a long time and the economics will always accrue to the benefit of Lucas, so I don't really understand how the economics work for Electronic Arts.
Following Koticks statement, Michael Pachter, a market analyst for Wedbush Morgan, told Eurogamer that he believes otherwise. Pachter estimates that Star Wars: The Old Republic will attract around 1.5 million subscribers and the LucasArts take is about 35%. Despite that and operating costs for the game, Pachter estimates that EA will still make a substantial profit.
My best guess is that they will attract 1.5 million subscribers paying around $15 a month, so they should generate around $270 million in revenue. If LucasArts gets 35 per cent and if EA incurs around 35 per cent operating expense, they make 30 per cent, or around $80 million per year, in profit. That's not bad."
Eurogamer also spoke with EEDAR VP Jesse Divnich, who felt Kotick's comments were "wide of the mark" and that Kotick had underestimated EA's ability to negotiate, while Screen Digest's Piers Harding-Rolls felt that the title needed to be well-marketed and of high quality out of the gate.
If Pachters numbers are correct, Star Wars: The Old Republic will be very lucrative for both parties. But as we all know, nothing in the MMORPG market is for certain. We could see Star Wars: The Old Republic become the next big thing or it could have moderate to mild success. How profitable this venture will really be for EA should be better known in the coming months once players have had a chance to sample the goods.
Star Wars: The Old Republic is scheduled to launch on December 20th with a staggered head start beginning on December 15th.
Source: Eurogamer