Originally posted by Adiaris One common reason is to avoid a hostile takeover... Very rarely repeated buyback is a good sign. It can be, but it has to be a specific situation. What I see with EAs buybacks given its terrible stock performance is an attempt in the short term to create confidence, coupled with the need to not fragment or disperse shares... At least that's what I'm seeing. Obviously most companies will say, if asked, that "there currently isn't any better investment out there than ourselves." I've said it so often myself I think I used to mutter it in my sleep!edit: bah ipad. i was quoting someone but it didn't like it...
Yeah. Also it is a good way how to burn your cash if you have nothing better to do with your money.
EA will never recover the money wasted on the SWTOR fiasco. Let alone the money they wasted on Bioware.
Unfounded assertion. If you can get some numbers to back this up I would like to see them.
The only way anyone could still be under that delusion are clueless people who still think:
EA profits = shelf price x boxes sold + some absurdly inflated active paying sub number x $15.
This is a boatload of money.( 2.38 million x 50 = 119 million.)+ (7 months x 0.5 million x 15 = 52.5 million) =171.5 million dollars. Which means SWTOR quite possibly could have already turned a profit.
SWTOR peaked at some 640 employees on the team. Even with the 200 or so layoffs so far, the SWTOR team is still absurdly large and costly for a MMORGP that most likely only has some 200k or active paying subs.
Do you have actual numbers for SWTOR employees or are you guessing?
Monthly overhead for the SWTOR team salary alone is roughly:
Team size x average team salary x 1.5 / 12 dollars a month
Average salary is most likely somewhere in the 50-100k a year range,
How many janitors, cleaning ladies and call centre personnel do you know that make this kind of money? Do you have any idea how many employees works on SWTOR? Do you have any facts to prove it? Do you know how mancy people work in their call center? Is it outsourced?
1.5 is the usualy estimate of base salary to actual amount an employee costs a company due to medical benefits, stock options, 401k, management overhead, etc.
Divide everything by 12 to get the monthly burn rate just for employees.
EA is probably still burning 2-3 million a month just on the SWTOR team right now. And then add on the costs to run the data centers, non-development employees like customer service, etc.
If they are spending 3 millions month on SWTOR as you assert. They would still be pulling in 12 million a month after employees are paid for. This is why it's nice to do some basic math before making claims.
The SWTOR team is going to need more drastic cuts to get down to some reasonable skeleton crew size that other F2P games have.
TLDR. You have no basis for any of your claims. Nor evidence to back it up. From what we do know it looks like SWTOR is likely close to or already making money for EA.
Originally posted by gervaise1 The management believed that their shares were a good bet apparently; lots of great things to come. As it transpires profits etc. have continually declined and all the stock buy backs have not helped the sahre price. Shareholders would have been better off if Radioshack hadn't bothered and had simply paid a dividend.The point being that just because EA is buying back its shares doesn't mean that the future will be bright. And in the past - and presumably in this case - they have been using bonds (borrowed money) to fund the buy-backs.
That still offer no other explanation for their move as I expressed so I do not see the your point.
Funny... the feedback on most forums is people wouldn't play it EVEN if it was free to play.
Personally I wouldn't give it room on my hard drive now.
Everyone says "I wouldn't even play if it was free" or "I wouldn't even play if someone paid me" etc but when it comes to it they will play.
The Old Republic isn't a great game, but it's definitely not a terrible game, it's average. I wouldn't be so dramatic as to say "I wouldn't give it room on my hard drive."
This game will BLOOM in players when it goes F2P, trust me. If Aion / AoC / Lotro / DnD / DCUO / CoH/V can do it, then The Old Republic can, like those games The Old Republic isn't good enough to warrant a sub fee, but it's still better than those games in my opinion.
From reading the transcript Goldman Sachs were not talking about the SW sub numbers but about EA's projected revenue.
Revenue projections were reduced by between $50M to $200M of which $75 was attributed to exchange rate changes and the rest primarily to SWTOR not doing as well as expected.
So SWTOR may "underperform" the projection made 3 months ago by as much as $125M - say $10M a month or around 700k subscribers worst that assumed 3 months ago.
They were also asked about whether there would be any upside to the numbers from the f2p revenue. Answer: "we anticipate that the mix between subscription and free-to-play will be balanced. But we don't see free-to-play revenues as incremental to anything that we currently discussed on call". Which I take as: they have assumed a figure for how much they are going to get from f2p - will it be as good as there guess 3 months ago?
I love EA double speak. According to EA slipped below one million is the same as well above 500.000.
How is that doublespeak? Their sub numbers are anywhere from 1-100% higher than 500k. Split the difference, and JUST THAT DIFFERENCE is more subs than most NA MMOs have.
Or are you saying that there's not much difference between 500k and 1 million? Do you keep that opinion when you go shopping?
I'd say that probably puts the number at around 600-850k. Any higher than that, and they'd probably say "nearly a million" subs.
I love EA double speak. According to EA slipped below one million is the same as well above 500.000.
How is that doublespeak? Their sub numbers are anywhere from 1-100% higher than 500k. Split the difference, and JUST THAT DIFFERENCE is more subs than most NA MMOs have.
Or are you saying that there's not much difference between 500k and 1 million? Do you keep that opinion when you go shopping?
I'd say that probably puts the number at around 600-850k. Any higher than that, and they'd probably say "nearly a million" subs.
Yes, and whatever the number is, it is 1.5 to 2 times the size of Eve's population, but the majority of posters here don't want to accept that.
I want a mmorpg where people have gone through misery, have gone through school stuff and actually have had sex even. -sagil
I love EA double speak. According to EA slipped below one million is the same as well above 500.000.
How is that doublespeak? Their sub numbers are anywhere from 1-100% higher than 500k. Split the difference, and JUST THAT DIFFERENCE is more subs than most NA MMOs have.
Or are you saying that there's not much difference between 500k and 1 million? Do you keep that opinion when you go shopping?
I'd say that probably puts the number at around 600-850k. Any higher than that, and they'd probably say "nearly a million" subs.
I LOL's at this claim too. I don't see doublespeak.
Less than 1MM and greater than 500M.
The fact that they used the terminology of "slipped below 1 million" and "well above 500M" to me means in the 750M-900M range. Pretty health by any NA MMO standards.
I love EA double speak. According to EA slipped below one million is the same as well above 500.000.
How is that doublespeak? Their sub numbers are anywhere from 1-100% higher than 500k. Split the difference, and JUST THAT DIFFERENCE is more subs than most NA MMOs have.
Or are you saying that there's not much difference between 500k and 1 million? Do you keep that opinion when you go shopping?
I'd say that probably puts the number at around 600-850k. Any higher than that, and they'd probably say "nearly a million" subs.
But wouldn't they say between 600k and 1 million if it was in the range you mentioned? Or if it is close to 850k, why not say it is more than 800k? Surely that sounds a bit better than "more than 500k"?
Reference points. They specifically used the 500k number because that is significant (break even number).
I want a mmorpg where people have gone through misery, have gone through school stuff and actually have had sex even. -sagil
EA will never recover the money wasted on the SWTOR fiasco. Let alone the money they wasted on Bioware.
Unfounded assertion. If you can get some numbers to back this up I would like to see them.
The only way anyone could still be under that delusion are clueless people who still think:
EA profits = shelf price x boxes sold + some absurdly inflated active paying sub number x $15.
This is a boatload of money.( 2.38 million x 50 = 119 million.)+ (7 months x 0.5 million x 15 = 52.5 million) =171.5 million dollars. Which means SWTOR quite possibly could have already turned a profit.
SWTOR peaked at some 640 employees on the team. Even with the 200 or so layoffs so far, the SWTOR team is still absurdly large and costly for a MMORGP that most likely only has some 200k or active paying subs.
Do you have actual numbers for SWTOR employees or are you guessing?
Monthly overhead for the SWTOR team salary alone is roughly:
Team size x average team salary x 1.5 / 12 dollars a month
Average salary is most likely somewhere in the 50-100k a year range,
How many janitors, cleaning ladies and call centre personnel do you know that make this kind of money? Do you have any idea how many employees works on SWTOR? Do you have any facts to prove it? Do you know how mancy people work in their call center? Is it outsourced?
1.5 is the usualy estimate of base salary to actual amount an employee costs a company due to medical benefits, stock options, 401k, management overhead, etc.
Divide everything by 12 to get the monthly burn rate just for employees.
EA is probably still burning 2-3 million a month just on the SWTOR team right now. And then add on the costs to run the data centers, non-development employees like customer service, etc.
If they are spending 3 millions month on SWTOR as you assert. They would still be pulling in 12 million a month after employees are paid for. This is why it's nice to do some basic math before making claims.
The SWTOR team is going to need more drastic cuts to get down to some reasonable skeleton crew size that other F2P games have.
TLDR. You have no basis for any of your claims. Nor evidence to back it up. From what we do know it looks like SWTOR is likely close to or already making money for EA.
No we have been told. In May JR said that they needed 1M recurring subscribers to "make a profit but nothng to write home about". And in Feb EA said that they had about 850k subs (50% of 1.7M). At no time have they announced 1M subs - subs as in paying over and above the 30-days included. And in the discussions they were talking about long term subs - put at 1 to 2 years by the analysts depending on free months, marketing, actual sales etc.
So by inference based on what EA have said they have not made a profit.
And whoever posted in green about EA getting 2.38M x $50 please will they sell some goods for me. They get to pay all the cost of manufacture and distribution, and all taxes and then give me all the money they get from the sale - none for seller (Amazon, Wal-mart etc.). Pweeeze.
Originally posted by tuppe99 But wouldn't they say between 600k and 1 million if it was in the range you mentioned? Or if it is close to 850k, why not say it is more than 800k? Surely that sounds a bit better than "more than 500k"?
1) Usual fold times by 5. 2) 500k was the number discussed in context of minimal subs. 3) In terms of EA and investors, sub numbers are not a crucial information - what matters is revenue.
I LOL's at this claim too. I don't see doublespeak.
Less than 1MM and greater than 500M.
The fact that they used the terminology of "slipped below 1 million" and "well above 500M" to me means in the 750M-900M range. Pretty health by any NA MMO standards.
In May though they said that they were expecting 1.2M at the time they bought Bioware (JR responding to a question about the 1.3M number back then). So the numbers are not good.
The number today also includes those people with a 6 month sub - and they will have projections (based on retention rates etc.) how many of those they expect to hold. This is a part of the reduction in expected revenue that they mention - as much as $125M less. We also don't know how many trial players are in the number; maybe none are - but EA did not choose to define how they arrived at the 500k - 1M number.
As mentioned the 500k is significant as they have said that this is the number of subscriptions the the game needs to be profitable on an on-going basis. So they are still suggesting that "all is well". No evidence yet though of long term retention in my opinion. Clearly their estimates of 3 and 6 months ago missed the mark so why should this be better? I believe they could be preparing people for an "around 500k" number later as well; if the news is bad try and announce it all at once.
But wouldn't they say between 600k and 1 million if it was in the range you mentioned? Or if it is close to 850k, why not say it is more than 800k? Surely that sounds a bit better than "more than 500k"?
1) Usual fold times by 5. 2) 500k was the number discussed in context of minimal subs. 3) In terms of EA and investors, sub numbers are not a crucial information - what matters is revenue.
Yes, revenue is the most important number to investors, but sub numbers help to determine where that revenue is derived from. The fact that sub number are "irrelevant to investors" did not stop EA from announcing a definitive sub number in previous conference calls.
In the previous conference call, EA did not hesitate to mention the 1.3M sub number. Why now switch to: "below 1M but well above 500K" ? Is that because losing 500K subs per quarter could have panicked investors ?
EA are clearly trying to hide the real numbers, because those numbers look pretty bad. I wonder if the new $15 box price (with 30 days free play) will still require players to register a credit card to be able to access the game ? That would allow EA to count everyone in the 30 days free play as "subscribers", further muddying the waters. They are looking at any and all possible ways to hide the real numbers, it seems.
I love EA double speak. According to EA slipped below one million is the same as well above 500.000.
How is that doublespeak? Their sub numbers are anywhere from 1-100% higher than 500k. Split the difference, and JUST THAT DIFFERENCE is more subs than most NA MMOs have.
Or are you saying that there's not much difference between 500k and 1 million? Do you keep that opinion when you go shopping?
I'd say that probably puts the number at around 600-850k. Any higher than that, and they'd probably say "nearly a million" subs.
But wouldn't they say between 600k and 1 million if it was in the range you mentioned? Or if it is close to 850k, why not say it is more than 800k? Surely that sounds a bit better than "more than 500k"?
I say that because "million" is a magic, BIG sounding word that MMO devs would LOVE to be able to use, and for good reason. So if they could feel reasonably justified in including the word "million" in any way, they'd use it.
For example, would it sound better to say, "we have about 900,000 subs", or "we have a little under a million subs"? I think the latter, and I think most marketers would agree.
As mentioned the 500k is significant as they have said that this is the number of subscriptions the the game needs to be profitable on an on-going basis. So they are still suggesting that "all is well". No evidence yet though of long term retention in my opinion. Clearly their estimates of 3 and 6 months ago missed the mark so why should this be better? I believe they could be preparing people for an "around 500k" number later as well; if the news is bad try and announce it all at once.
Sure. But also keep in mind that that's the number they arrived at when they were talking about keeping a full development team on board for post launch content. Truckloads of pink slips later...
I agree largely with your post though. Their current numbers probably are well under their projections. It's just that it's not the big unrecoverable WAR-esque nosedive that some would (and want to with all their tiny grinchy hearts) believe.
"For players who cancelled their subscriptions, feedback provided as they cancelled indicated that 40% were turned off by the monthly subscription fee"
The translation of this is simple, your game is not WORTH $15 a month. We have been paying 15 for 12 years, happy to, but we will not pay 15 for a game we feel is not worth 15. They make it sound like we players were turned off by the idea of a monthly, not TOR lol.
There are plenty of people complaining about monthly subs in mmorpgs for a long while. So it seems people are able to pick and choose to complain about subs in both directions. devs can't win unless they are the new cool and groovy game that can do no wrong.
Kyleran: "Now there's the real trick, learning to accept and enjoy a game for what
it offers rather than pass on what might be a great playing experience
because it lacks a few features you prefer."
John Henry Newman: "A man would do nothing if he waited until he could do it so well that no one could find fault."
FreddyNoNose: "A good game needs no defense; a bad game has no defense." "Easily digested content is just as easily forgotten."
LacedOpium: "So the question that begs to be asked is, if you are not interested in
the game mechanics that define the MMORPG genre, then why are you
playing an MMORPG?"
Sure. But also keep in mind that that's the number they arrived at when they were talking about keeping a full development team on board for post launch content. Truckloads of pink slips later...
I agree largely with your post though. Their current numbers probably are well under their projections. It's just that it's not the big unrecoverable WAR-esque nosedive that some would (and want to with all their tiny grinchy hearts) believe.
Considering the money spent on this project compared to War I would say it is pretty significant. War could have been recoverable. The thing was that at the time the whole f2p transition was unproven. Turbine didn't prove it was a valid and profitable tactic until after that whole debacle. Which is a shame really because if Turbine would have done it earlier there is a very good chance War would have a f2p model as well. Hell, highly doubtful we would be seeing this move now if it wasn't for Turbine and other companies that followed suit showing the profitability in a f2p transition.
Which I would have loved to have seen because frankly far as long term goes that game had a lot more upside than SWTOR far as I'm concerned.
Oh well...too late now...
1. For god's sake mmo gamers, enough with the analogies. They're unnecessary and your comparisons are terrible, dissimilar, and illogical.
2. To posters feeling the need to state how f2p really isn't f2p: Players understand the concept. You aren't privy to some secret the rest are missing. You're embarrassing yourself.
3. Yes, Cpt. Obvious, we're not industry experts. Now run along and let the big people use the forums for their purpose.
So they have resorted to using a range of numbers now..? Hey guess what, my personal wealth is between 500 bucks and 10 billion, so chances are I'm really rich!!!
Enter a whole new realm of challenge and adventure.
No we have been told. In May JR said that they needed 1M recurring subscribers to "make a profit but nothng to write home about". And in Feb EA said that they had about 850k subs (50% of 1.7M). At no time have they announced 1M subs - subs as in paying over and above the 30-days included. And in the discussions they were talking about long term subs - put at 1 to 2 years by the analysts depending on free months, marketing, actual sales etc.
So by inference based on what EA have said they have not made a profit.
And whoever posted in green about EA getting 2.38M x $50 please will they sell some goods for me. They get to pay all the cost of manufacture and distribution, and all taxes and then give me all the money they get from the sale - none for seller (Amazon, Wal-mart etc.). Pweeeze.
Yes. Just going by rough estimates of the financials for SWTOR make it perfectly clear just what a financial disaster the game is.
There are three different ways to look at profitability for SWTOR:
1. Immediate day to day, month to month profitibility. Are the subscription revenues exceeding the costs of keeping the game running each month, paying the salries of everyone working on the team, and all the other ongoing operating costs.
2. Return of the development costs invested in the game. 200, 300 million or whatever number EA spent over the years bringing the game to market.
3. Return of the 860 million spent buying Bioware.
There was an interview with a Bioware employee who stated SWTOR topped out at some 640 employees. That is an absolutely insane number of people for a game development team. And when you do a rough estimate of how much a team that size costs EA every year you are looking at easily 60, 70, 80 million dollars a year depending on what you estimate the average salary for the team is and how much it costs EA above and beyond the base salary of each employee.
A team of 640 costing EA some 60-80 million in year in salary comes out to some 5-6 million or so each month EA is spending above and beyond the initial 200,300 million dollars on development before the game ships. EA was supposed to have cut some 200 or so from the SWTOR. Even if you assume they have let go more and cut the team size from when the game shipped in half, SWTOR is still costing EA a good 2.5 to 3 million every month just in salary. Add in the data center costs and customer service and other montly operating costs and it should be obvious why EA states they need 500k a month in subs to break even and 1 million for a decent profit.
And that is why SWTOR isn't ever going to make back the money EA blew developing the game or the money they wasted buying Bioware. The game has month to month operating costs that were targeted at 1 million, 2 million or more active paying subs.
Looking at the gigantic team size for SWTOR and just how huge that costs EA shows how the 200 to 300 million dollar budget of the game isn't any mystery. Bioware would have been racking up 40,50,60 million dollar a year paying for just the dev team over the years.
They claim to have over 500K subscribers. I wonder what those subscribers are doing because I really don't see them playing the game much. I guess we'll have to take their word for it. If they had over 500K people playing and paying, I'd doubt that they'd announce this F2P move. 6 month subs + 30 days + free month is when exactly? Another month to go? That free month was a golden move, wasn't it?
They know they're dead in the water. If they had almost 1M paying players they wouldn't even pronounce F2P in private, let alone in public. There would be smiling faces across the board.
P2P was a mistake, should have been B2P from the start.
This is a boatload of money.( 2.38 million x 50 = 119 million.)+ (7 months x 0.5 million x 15 = 52.5 million) =171.5 million dollars. Which means SWTOR quite possibly could have already turned a profit.
No we have been told. In May JR said that they needed 1M recurring subscribers to "make a profit but nothng to write home about". And in Feb EA said that they had about 850k subs (50% of 1.7M). At no time have they announced 1M subs - subs as in paying over and above the 30-days included. And in the discussions they were talking about long term subs - put at 1 to 2 years by the analysts depending on free months, marketing, actual sales etc.
So by inference based on what EA have said they have not made a profit.
And whoever posted in green about EA getting 2.38M x $50 please will they sell some goods for me. They get to pay all the cost of manufacture and distribution, and all taxes and then give me all the money they get from the sale - none for seller (Amazon, Wal-mart etc.). Pweeeze.
A few of the game devs/publishers on different sites have discussed the "split" on retail sales a few times.
In general, the RETAILER gets 65%-75% of the box price for physical copies, depending on the retailer. So for physical copies, the publisher is getting the small slice.
For digitial distribution, the retailer gets in the 25%-30% range, for a major release large title.
And even on the Origin sales (EA's distributor) I guarantee that they split out a similar amount even though it was an EA product being sold, because any such "sales commission" would be outside any revenue sharing deal with the IP holder, i.e. EA gets to keep that 25% off the top before paying anyone else, same as if another site sold the copies. So it would be profit for Origin. A technicality, but still money not going back into the TOR pot.
This $50-$60 a box crap going to EA that people throw around makes me laugh.
So they have resorted to using a range of numbers now..? Hey guess what, my personal wealth is between 500 bucks and 10 billion, so chances are I'm really rich!!!
Yah, they are probably sitting at around 550k subs, with going down to 200-250k in september, so even reducing costs considerably (layoffs and other stuff) aint makin it.
Originally posted by Burntvet
This $50-$60 a box crap going to EA that people throw around makes me laugh.
Mah, dont sweat, they are just kids that havent faced the real life yet. if you started to write how proper financial plan is made, and how all that is needed is tracked they would probably wet their pants
Comments
Yeah. Also it is a good way how to burn your cash if you have nothing better to do with your money.
TLDR. You have no basis for any of your claims. Nor evidence to back it up. From what we do know it looks like SWTOR is likely close to or already making money for EA.
That still offer no other explanation for their move as I expressed so I do not see the your point.
Everyone says "I wouldn't even play if it was free" or "I wouldn't even play if someone paid me" etc but when it comes to it they will play.
The Old Republic isn't a great game, but it's definitely not a terrible game, it's average. I wouldn't be so dramatic as to say "I wouldn't give it room on my hard drive."
This game will BLOOM in players when it goes F2P, trust me. If Aion / AoC / Lotro / DnD / DCUO / CoH/V can do it, then The Old Republic can, like those games The Old Republic isn't good enough to warrant a sub fee, but it's still better than those games in my opinion.
From reading the transcript Goldman Sachs were not talking about the SW sub numbers but about EA's projected revenue.
Revenue projections were reduced by between $50M to $200M of which $75 was attributed to exchange rate changes and the rest primarily to SWTOR not doing as well as expected.
So SWTOR may "underperform" the projection made 3 months ago by as much as $125M - say $10M a month or around 700k subscribers worst that assumed 3 months ago.
They were also asked about whether there would be any upside to the numbers from the f2p revenue. Answer: "we anticipate that the mix between subscription and free-to-play will be balanced. But we don't see free-to-play revenues as incremental to anything that we currently discussed on call". Which I take as: they have assumed a figure for how much they are going to get from f2p - will it be as good as there guess 3 months ago?
Average, yet better than Aion/AoC/Lotro/DnD/DCUO/CoH/V (almost entire comparable selection)?
You have odd way to use term "average"
How is that doublespeak? Their sub numbers are anywhere from 1-100% higher than 500k. Split the difference, and JUST THAT DIFFERENCE is more subs than most NA MMOs have.
Or are you saying that there's not much difference between 500k and 1 million? Do you keep that opinion when you go shopping?
I'd say that probably puts the number at around 600-850k. Any higher than that, and they'd probably say "nearly a million" subs.
Yes, and whatever the number is, it is 1.5 to 2 times the size of Eve's population, but the majority of posters here don't want to accept that.
I want a mmorpg where people have gone through misery, have gone through school stuff and actually have had sex even. -sagil
I LOL's at this claim too. I don't see doublespeak.
Less than 1MM and greater than 500M.
The fact that they used the terminology of "slipped below 1 million" and "well above 500M" to me means in the 750M-900M range. Pretty health by any NA MMO standards.
Reference points. They specifically used the 500k number because that is significant (break even number).
I want a mmorpg where people have gone through misery, have gone through school stuff and actually have had sex even. -sagil
No we have been told. In May JR said that they needed 1M recurring subscribers to "make a profit but nothng to write home about". And in Feb EA said that they had about 850k subs (50% of 1.7M). At no time have they announced 1M subs - subs as in paying over and above the 30-days included. And in the discussions they were talking about long term subs - put at 1 to 2 years by the analysts depending on free months, marketing, actual sales etc.
So by inference based on what EA have said they have not made a profit.
And whoever posted in green about EA getting 2.38M x $50 please will they sell some goods for me. They get to pay all the cost of manufacture and distribution, and all taxes and then give me all the money they get from the sale - none for seller (Amazon, Wal-mart etc.). Pweeeze.
1) Usual fold times by 5.
2) 500k was the number discussed in context of minimal subs.
3) In terms of EA and investors, sub numbers are not a crucial information - what matters is revenue.
In May though they said that they were expecting 1.2M at the time they bought Bioware (JR responding to a question about the 1.3M number back then). So the numbers are not good.
The number today also includes those people with a 6 month sub - and they will have projections (based on retention rates etc.) how many of those they expect to hold. This is a part of the reduction in expected revenue that they mention - as much as $125M less. We also don't know how many trial players are in the number; maybe none are - but EA did not choose to define how they arrived at the 500k - 1M number.
As mentioned the 500k is significant as they have said that this is the number of subscriptions the the game needs to be profitable on an on-going basis. So they are still suggesting that "all is well". No evidence yet though of long term retention in my opinion. Clearly their estimates of 3 and 6 months ago missed the mark so why should this be better? I believe they could be preparing people for an "around 500k" number later as well; if the news is bad try and announce it all at once.
Yes, revenue is the most important number to investors, but sub numbers help to determine where that revenue is derived from. The fact that sub number are "irrelevant to investors" did not stop EA from announcing a definitive sub number in previous conference calls.
In the previous conference call, EA did not hesitate to mention the 1.3M sub number. Why now switch to: "below 1M but well above 500K" ? Is that because losing 500K subs per quarter could have panicked investors ?
EA are clearly trying to hide the real numbers, because those numbers look pretty bad. I wonder if the new $15 box price (with 30 days free play) will still require players to register a credit card to be able to access the game ? That would allow EA to count everyone in the 30 days free play as "subscribers", further muddying the waters. They are looking at any and all possible ways to hide the real numbers, it seems.
Looks like EA better start hyping BF4 soon... oh, they already are (http://www.medalofhonor.com/bf4-beta)
I say that because "million" is a magic, BIG sounding word that MMO devs would LOVE to be able to use, and for good reason. So if they could feel reasonably justified in including the word "million" in any way, they'd use it.
For example, would it sound better to say, "we have about 900,000 subs", or "we have a little under a million subs"? I think the latter, and I think most marketers would agree.
So that's how I come to that guestimation.
Sure. But also keep in mind that that's the number they arrived at when they were talking about keeping a full development team on board for post launch content. Truckloads of pink slips later...
I agree largely with your post though. Their current numbers probably are well under their projections. It's just that it's not the big unrecoverable WAR-esque nosedive that some would (and want to with all their tiny grinchy hearts) believe.
Considering WAR cost less then $100 million to develope, SWTOR's performance could easily be described as comporable or worse then WAR's.
There are plenty of people complaining about monthly subs in mmorpgs for a long while. So it seems people are able to pick and choose to complain about subs in both directions. devs can't win unless they are the new cool and groovy game that can do no wrong.
Epic Music: https://www.youtube.com/watch?v=vAigCvelkhQ&list=PLo9FRw1AkDuQLEz7Gvvaz3ideB2NpFtT1
https://archive.org/details/softwarelibrary_msdos?&sort=-downloads&page=1
Kyleran: "Now there's the real trick, learning to accept and enjoy a game for what it offers rather than pass on what might be a great playing experience because it lacks a few features you prefer."
John Henry Newman: "A man would do nothing if he waited until he could do it so well that no one could find fault."
FreddyNoNose: "A good game needs no defense; a bad game has no defense." "Easily digested content is just as easily forgotten."
LacedOpium: "So the question that begs to be asked is, if you are not interested in the game mechanics that define the MMORPG genre, then why are you playing an MMORPG?"
Considering the money spent on this project compared to War I would say it is pretty significant. War could have been recoverable. The thing was that at the time the whole f2p transition was unproven. Turbine didn't prove it was a valid and profitable tactic until after that whole debacle. Which is a shame really because if Turbine would have done it earlier there is a very good chance War would have a f2p model as well. Hell, highly doubtful we would be seeing this move now if it wasn't for Turbine and other companies that followed suit showing the profitability in a f2p transition.
Which I would have loved to have seen because frankly far as long term goes that game had a lot more upside than SWTOR far as I'm concerned.
Oh well...too late now...
1. For god's sake mmo gamers, enough with the analogies. They're unnecessary and your comparisons are terrible, dissimilar, and illogical.
2. To posters feeling the need to state how f2p really isn't f2p: Players understand the concept. You aren't privy to some secret the rest are missing. You're embarrassing yourself.
3. Yes, Cpt. Obvious, we're not industry experts. Now run along and let the big people use the forums for their purpose.
So they have resorted to using a range of numbers now..? Hey guess what, my personal wealth is between 500 bucks and 10 billion, so chances are I'm really rich!!!
Enter a whole new realm of challenge and adventure.
Yes. Just going by rough estimates of the financials for SWTOR make it perfectly clear just what a financial disaster the game is.
There are three different ways to look at profitability for SWTOR:
1. Immediate day to day, month to month profitibility. Are the subscription revenues exceeding the costs of keeping the game running each month, paying the salries of everyone working on the team, and all the other ongoing operating costs.
2. Return of the development costs invested in the game. 200, 300 million or whatever number EA spent over the years bringing the game to market.
3. Return of the 860 million spent buying Bioware.
There was an interview with a Bioware employee who stated SWTOR topped out at some 640 employees. That is an absolutely insane number of people for a game development team. And when you do a rough estimate of how much a team that size costs EA every year you are looking at easily 60, 70, 80 million dollars a year depending on what you estimate the average salary for the team is and how much it costs EA above and beyond the base salary of each employee.
A team of 640 costing EA some 60-80 million in year in salary comes out to some 5-6 million or so each month EA is spending above and beyond the initial 200,300 million dollars on development before the game ships. EA was supposed to have cut some 200 or so from the SWTOR. Even if you assume they have let go more and cut the team size from when the game shipped in half, SWTOR is still costing EA a good 2.5 to 3 million every month just in salary. Add in the data center costs and customer service and other montly operating costs and it should be obvious why EA states they need 500k a month in subs to break even and 1 million for a decent profit.
And that is why SWTOR isn't ever going to make back the money EA blew developing the game or the money they wasted buying Bioware. The game has month to month operating costs that were targeted at 1 million, 2 million or more active paying subs.
Looking at the gigantic team size for SWTOR and just how huge that costs EA shows how the 200 to 300 million dollar budget of the game isn't any mystery. Bioware would have been racking up 40,50,60 million dollar a year paying for just the dev team over the years.
They claim to have over 500K subscribers. I wonder what those subscribers are doing because I really don't see them playing the game much. I guess we'll have to take their word for it. If they had over 500K people playing and paying, I'd doubt that they'd announce this F2P move. 6 month subs + 30 days + free month is when exactly? Another month to go? That free month was a golden move, wasn't it?
They know they're dead in the water. If they had almost 1M paying players they wouldn't even pronounce F2P in private, let alone in public. There would be smiling faces across the board.
P2P was a mistake, should have been B2P from the start.
Because I also think those games are average at best, some I think are bad, yet still not as good as The Old Republic.
A few of the game devs/publishers on different sites have discussed the "split" on retail sales a few times.
In general, the RETAILER gets 65%-75% of the box price for physical copies, depending on the retailer. So for physical copies, the publisher is getting the small slice.
For digitial distribution, the retailer gets in the 25%-30% range, for a major release large title.
And even on the Origin sales (EA's distributor) I guarantee that they split out a similar amount even though it was an EA product being sold, because any such "sales commission" would be outside any revenue sharing deal with the IP holder, i.e. EA gets to keep that 25% off the top before paying anyone else, same as if another site sold the copies. So it would be profit for Origin. A technicality, but still money not going back into the TOR pot.
This $50-$60 a box crap going to EA that people throw around makes me laugh.
Yah, they are probably sitting at around 550k subs, with going down to 200-250k in september, so even reducing costs considerably (layoffs and other stuff) aint makin it.
Mah, dont sweat, they are just kids that havent faced the real life yet. if you started to write how proper financial plan is made, and how all that is needed is tracked they would probably wet their pants