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How is Sony Funding SWG???
webbt01
Member Posts: 22
Hi all, long time listener first time caller...
Have never played SWG, i am a big fan of WOW, Guild Wars and of cause FABLE!!!
I cant be ar$ed with an online community and all the dramas that go with it, as real life dramas add more than enough stress to my life... However that been said its ironic that I have been following the SWG drama like a junkie hooked on smack...
My question is how on earth are Sony Online funding this, sure they are a massive corporate company and can throw a couple of billion here and there but if you do the maths it wont be long till a bomb will drop!!!
OK so here are my calculations... "My mum says I am an awsome at maths so dont flame me"
~50,000 paying subs at ~$10 a month = 0.5 Mil a month or 6 Mil a year
at least 20 developers on 100K a year = 2 Mil a year (including system admins) THIS IS CHEAP!
around a 2 - 5 mil advertising budget
bandwidth, server maintenance, backups etc another ~2 mil
Anyway post your thoughts in a contructive manner... Please correct me on any figures as I am extremely interested in the costs invloved in relation to running a MMO...
FOR THE HORDE
Comments
There is a population and it might be big enough to support SWG alone, not really sure at this point. They have merged servers and such and other ways to reduce costs so that helps the budget I am sure. Part of it is also their projected earnings and SOE funneling profits from otehr sources to sustain SWG until their projected earnings come. If they don't then expect a blunt end to SWG, if they do then expect it to be in the background for a long time...not dying not flourishing.
Also your numbers are kinda inflated. Developers won't all be making 100k a year, yes some more, but a lot less. The subscription is $15 a month I believe also, or part of station pass which is $21.99 a month. Advertising budgets are often ppart of company deals where they can put an ad from any of their products up, so advertising is kinda a joint pool for various projects. Bandwidth and maint is often a rented thing that scales so reducing servers and nodes and such would lower that cost.
Advertising probably get some of the money from Lucas Arts. Lucas can pretty much print his own money these days.
SWG has paid itself several times over by now. Everything they make now is essentially profit.
2.5mil copies sold (reported after NGE) x $40 = $100 mil
Lifetime subscription average 200k x $15 x 36 = $108 mil
Production costs were (guessing) around $20 mil.
Salaries 70 (apparently employees) x $100k (average salary) x 3 = $21 mil
Operating costs (completely bogus value) $1 mil/month x 36 = 36 mil
$208 - $77 = $131 mil profit.
You might say that WoW makes that in two months. For me, $131 mil profit! is a nice sum.
Of course, i could be completely wrong, and there's some huge expense hidded somewhere. But since SOE shares resources among games, there rest is shared.
Yea $10 was an easy number to calulate, plus like you said with the sony station pass you get more bang for your buck at ~$20 a month...
Its funny that someone developing a game must have extraordinary skills in programming yet get paid as much as a self employed trucky or sparkie...
Anyway thanks for the info... keep it coming
Having access to a billion $ IP - Billions of dollars..
Having access to a massive fan base of said IP - Even more Billons...
Singly handedly alienating them due to stupidity - Priceless.
$100k is high for such development. Software developers are usually paid less, and there's also plenty of interns, temps and similar cheap jobs, who get 40-70k. Lead developers get more, managers are those that earn the big bucks.
And then there's 29 million CS majors in India, who will live in upper middle class by getting paid $10k-20k. Welcome to the wonderful world of information society.
That's actually wrong. In a corporate structure they are to make a certain amount a year based on projections. Any excess goes right to the company as a whole.
So therefore, there is no mythical bank where all the good profit went. It was distributed to the company and smed probably bought a sportscar. That, and it offset the development costs for EQ2.
NOW of SWG underperforms it isn't offset. Losses are losses. If $OE were a small mom & pop company, they'd have banked the profit for a rainy day. $OE doesn't work that way.
But on the other side of the coin... Profits for all the games are shared throughout the company. SO.. EQ2's subscriptions, MxO, Planetside and all the other couple games all go in a big pool. That money floats the company no matter which game over/underperforms budget.
So you ask when will $OE pull the plug on SWG for losing $$$? When the bottom line is too low. BUT I bet they are just waiting to see if it is a hit on the PS3.
Shayde - SWG (dead)
Proud member of the Cabal.
It sounds great, so great in fact, I pitty those who canceled
I don't like it when you say things. - A Vanguard fan who does too.
09f911029d74e35bd84156c5635688c0
That's actually wrong. In a corporate structure they are to make a certain amount a year based on projections. Any excess goes right to the company as a whole.
Obviously, its not that simple. But as with all corporate projects, they do have reserves and can affort to take a loss over a period of time. If they are launching it for PS3, they already have sales projections that guarantee they will cover it.
My point was just that SWG made profit no matter what. They covered initial development costs, they had running costs covered the entire time, and even rogue sales of boxed sets generate income.
SWG made nice ROI no matter what. The long term revenue now only depends on their strategy. No matter the subscriptions now, just running it on life support for sake of subscription income would not be viable for SOE and they would have already closed it.
To true about the PS3... Thanks for putting it into perspective, I dont think it will be long before SOE goes down the pipes...
Unless I missed it, You guys are forgetting Lucas Arts cut of the pie.
LA is the key here. I am amazed they have allowed SOE to keep the license. The oportunity costs to LA must be huge. (IE they are missing out on the potential $$$ from the license they have tied up in SWG.)
They may have had reserves, but I'd bet they're taking much more in the way of losses than projected.
That's proven in the despiration behind their newfound communication and goodwill tour. They're hemmoraging cash.
Shayde - SWG (dead)
Proud member of the Cabal.
It sounds great, so great in fact, I pitty those who canceled
I don't like it when you say things. - A Vanguard fan who does too.
09f911029d74e35bd84156c5635688c0
And hemmoraging could also mean their Q1 profit is 10% less than expected or under the set quota. Even profit can be seen as loss in such corporations.
BTW, I read somewhere, that most game companies end their fiscal year in April. Has to do something with christmas sales. Might explain their increased interest in the wellbeing of the game during these past few months.
But, given the lack of talent at SOE, maybe it is inflated.....
Also, remember, that a loss in one product can be used to tax advantage of a profitable product. Exactly, what the sweet spot would be for that, I don't know. But certainly, companies use loss centers to help off set tax obligations in profit centers. Also, as long as SOE and LA have SWG on the market, they benefit (like it or not) from market presence.
And hemmoraging could also mean their Q1 profit is 10% less than expected or under the set quota. Even profit can be seen as loss in such corporations.
BTW, I read somewhere, that most game companies end their fiscal year in April. Has to do something with christmas sales. Might explain their increased interest in the wellbeing of the game during these past few months.
Intresting point. The company I work for has its fiscal year start in June...I guess we will wait and see what happens when april is over with.
Xcathdra
Having access to a billion $ IP - Billions of dollars..
Having access to a massive fan base of said IP - Even more Billons...
Singly handedly alienating them due to stupidity - Priceless.
advertising budget has two problems.
1. ad budgets are rarely figured per a single project. More likely SOE has a single budget to cover all projects and allocates money according to need over many games. Future spending will certainly be reserved for their DC Comics MMO and maybe an expansion. SWG got their push for the NGE, but not much else will be spent on it unless an expansion comes.
2. two things offset ad costs....co-op advertising (ie shared costs with LA) and multiple purchased space discounts. For example, if you agree to purchase between 4-6 full page ads in PC Gamer, they might offer you a 10% discount on rates.
Discount rates also apply for tv spots. I noticed around 6 commercials for SWG on Sci Fi network, around 5 on G4TV and a few elsewhere that I dont recall (definitely cable). Based on the time and ad rate for that particular station (yes I have the ad rates via my position teaching advertising)....
G4TV - 7pm - 11pm weekend rate is 35k per 30 sec ad x 5 = 150k (rounding down due to possible discount)
The other networks are roughly the same rate. If they ran say 20 commercials (30 sec spot) on primetime slots they may have spent 600k total during the NGE push.
Ad rates for a major game mag like PC Gamer will run roughly 125k for a full page ad...little more for inside back page or backside cover page. I saw 2 ads for NGE in PC Gamer, = 250k
They probably spent less than 1 million for advertising. And thats a one time cost as they arent going to advertising throughout the year
That's why you'll never see posts like these on SOE's forum. Intellegence is not welcomed over there. To gain control over the masses, silence the intellectuals and the "freedom" of speech. When this is accomplished, start your propaganda machine to brainwash the ones who are easily influenced.
Game, set and match.
********************************
SWG pre cu - never forgotten.
SOE knows what you like... You don't!
And don't forget... I am forcing you to read this!
The subscription numbers are completely irrelevant if Sony wants to keep SWG going for whatever reason. It's like the MacDonald concept: sometimes they don't care if one of their places run with red numbers for years if that location is centrally placed or in the vicinity of a competitor like KFC or Burger King. They keep them because of presence ie. pr reasons. Now I doubt SWG keeps running for pr reasons since everybody is laughing about it. I think its more a question of pride/vain and they can't axe it now if they got it lined up for console this x-mas.
G4 gets 35k a spot? That's a lot of cash to show an ad to a handfull of people. They'd get much more exposure if they paid a homeless guy 10 bucks to hold a sign up.
Shayde - SWG (dead)
Proud member of the Cabal.
It sounds great, so great in fact, I pitty those who canceled
I don't like it when you say things. - A Vanguard fan who does too.
09f911029d74e35bd84156c5635688c0
However if they are banking on porting to console and we see a dumming down version on all the station pass games and ps 3 is a bust, then at that time within a few months launch of PS 3 you may see some big changes.
Frankly i think they will have a very hard time getting ps 3 out by xmass and with the cost being so high folks will just be attracked to other offerings.
I imgine they are working on there next mmorpg at this point, as well as a initial offering of ps 3 games and hoping that will be a hit also.
I am frankly looking forward to what comes of ps 3 hype and there next mmorpg.
It was alot of fun around here durning the time of what game will be better eq 2 and or wow. Just imgine all the new soe bashers when there next mmorpg comes out
I'm thinking the cost hype we're getting now will be followed by a last-minute price cut. Right now Xbox2 isn't in full-court-press trying to sell the units as fast as they can because they think PS3 will have a $200+ higher price point. They think they'll win the price war without problem. Sony is doing nothing to dispel any rumor, so suddenly they announce it'll cost the same as an Xbox2 with more value and a better hardware configuration? BRILLIANT!
Shayde - SWG (dead)
Proud member of the Cabal.
It sounds great, so great in fact, I pitty those who canceled
I don't like it when you say things. - A Vanguard fan who does too.
09f911029d74e35bd84156c5635688c0
I'm thinking the cost hype we're getting now will be followed by a last-minute price cut. Right now Xbox2 isn't in full-court-press trying to sell the units as fast as they can because they think PS3 will have a $200+ higher price point. They think they'll win the price war without problem. Sony is doing nothing to dispel any rumor, so suddenly they announce it'll cost the same as an Xbox2 with more value and a better hardware configuration? BRILLIANT!
Wasn't the original x-box selling way under the production costs with great loss, just to undercut the competition?