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The Old Republic cost EA $500 million, MMO a “risky bet,” claims analyst

“Risky” investment may define Riccitiello's time at the top, suggest market soothsayers

Words: on January 18, 2012
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Speaking to Market Watch, analyst Doug Creutz estimates that Electronic Arts likely invested around $500 million dollars on Star Wars: The Old Republic, factoring in development costs and EA CEO John Riccitiello’s push to acquire the game’s developer, BioWare/Pandemic. “EA has minimized its risks as much as it can on this bet, but it’s still a risky bet,” says Creutz, suggesting that “the total all-in investment in Star Wars is probably approaching half a billion dollars.”

While EA has said that it only needed 500,000 subscribers to begin turning a profit on The Old Republic (a milestone it surpassed in record time), Bigpoint CEO and MMO expert Heiko Hubertz argues that the game's subscription-driven model is unlikely to ever make it into the black (that's economy-talk for “stop losing money”). Impartial bystander Bobby Kotick's speculation is that regardless of the game's profit potential, “the economics [of any Star Wars property] will always accrue to the benefit of Lucas.”

However, Riccitiello's efforts to bring together EA and BioWare may pay off beyond the gamble of The Old Republic. BioWare co-founder Ray Muzyka called the CEO's involvement “a tremendous plus,” to the game's development, saying the Riccitiello-led company worked “every step along the way” to honor BioWare's core values. Muzyka says The Old Republic's subscriber base is the fastest-growing in MMO history, which is a good start for Riccitiello's risky gambit – but for players already awaiting BioWare's next big title, the partnership's legacy is unlikely to boil down to just one game.

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Topics:

Bioware, EA, Electronic Arts, MMO, Star Wars: The Old Republic, SWTOR, TOR

11 comments

  • TURbo - January 23, 2012 11:22 a.m.

    So Star Wars Old Republic needs a base of 5 million subscribers for the next 5 years to break even. Good luck. EA was extremely ambitious 2011. Trying to position itself against the Number One in Digital Distribution, MMOs, FPS, and social games all at the same time.

  • Ravenbom - January 19, 2012 1:36 p.m.

    Half a billion dollars! That really makes me sick to my stomach. I'm the biggest Star Wars nerd in the world and love videogames and I'm no activist, but half a billion dollars really makes me think about the good all that money could be doing in the world. That, or it could be used to make 10 AAA games. Oh the humanity.

  • Darkhawk - January 19, 2012 9:56 a.m.

    "Impartial bystander Bobby Kotick" It's hard not to read the snark there, even if technically GR is not being sarcastic.

  • Whit - January 19, 2012 9:17 a.m.

    Reading the news stories on GamesRadar.com you would think every thing was hunky dorey in TORland. Unfortunately, TOR has been a huge disappointment for most folks that bought the game. Would love to see how many of the box sales stay on and pay $15.

  • MetroidPrimeRib - January 18, 2012 6:45 p.m.

    $500,000,000? I thought it was $300,000,000? By those numbers, they'd need to be Pay to Play until 2030 to make a profit, without expansions.

  • NubberzTheHedgehog - January 18, 2012 7:01 p.m.

    The projected subscriber count by this point is said to be 1.5-2 million people. Let's say 1.5 million people. That is 1.5 million x $60 for the core game which is $90 million. Each month making $15 dollars off of a player which would be $22.5 million a month. It isn't going to take that long with its current number of subscriptions.

  • lilbuddha - January 18, 2012 7:33 p.m.

    you both ignored the part where they are paying a huge cut to George "I ruined Star Wars" Lucas, due to royalties.

  • NubberzTheHedgehog - January 18, 2012 7:39 p.m.

    I'm sure that EA has put considerable thought into making the game profitable.

  • farsided - January 18, 2012 7:47 p.m.

    That, and they have to keep paying people to manage the servers, introduce new content, and take care of QA. Plus, they're not getting the full 60 dollars, stores are going to be taking a sizeable chunk of that income. I question whether this game will ever turn a decent profit, what with Guild Wars 2 coming out this year (in addition to Diablo and the next WoW expansion coming out whenever they do) pulling subscribers away, and frankly, I hope it doesn't. EA's business model for MMO's is archaic, and they need to learn a very big lesson, especially after whoring out Bioware the way they've been.

  • sev705 - January 19, 2012 12:54 a.m.

    Just wanted to clear this up, it's been stated that Lucas only gets 30% of the net profit. So, EA/Bioware gets all money until they break even. After that is when Lucas gets paid.

  • gameexchange - January 19, 2012 9:06 a.m.

    They may have put a lot of thought into making the game profitable, but in the end, its the gaming communities decision whether the game will live or die. http://www.gameexchangeshop.com/

Showing 1-11 of 11 comments

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