WoW-Killer, My Ass

Posted by Gary N. Mengle on

Some might call this grave-dancing, but me, I call it I told you fucking so.

Yes, SWTOR is underperforming. And contrary to EA claims, its budget may have been well north of the $300 million figure cited by the infamous EALouse. A figure which was sneered at by SWTOR devotees, but which, as I demonstrated long ago, twice, makes it a virtual impossibility for the title to turn a profit for EA, no matter how much magical accounting they do. Because the money spent on it is not actually imaginary.

Even in the MMO blogosphere, we’re starting to hear discontent, and not just from the people, like myself, who never bothered buying it. SWTOR’s first real patch broke level-cap PvP hard, and they’re scrambling to fix it. They are probably working less hard at letting players unsubscribe from the game.

I like Bioware and am rooting for them, but the budget doomed this project the minute it went over $100 million. I still think it’s going to hold on to subscribers better than most new MMOs that launch these days, but EA had better take a hard look at how Trion Worlds worked to keep players in Rift. But it doesn’t really matter. The only people who will be happy with the checks they get are the ones at Lucasarts.

16 responses to “WoW-Killer, My Ass”

  1. Being able to say “I told you so” is a bitter victory when all I wanted was a real offline sequel to KOTOR. 😦

  2. I head Lucas takes like a 40% cut. Not sure if that is truth for this title, but SWG struggled paying the man. Even tho they did last 8 years with a mediocre game. Of course it didn’t have a 300mil dollar budget either. I’m guessing BioWare’s frantic release of games the past couple years helped fund SWTOR a bit. Wasn’t it a bit odd BioWare only had a new title every couple years, then DA:O + DLC, ME2, then DA2 all in a matter of 2 years. Seems they started pumping out games all of a sudden. Maybe to help fund their potential cash cow.

  4. I keep wondering what game everyone else is playing, because I am still having a blast. Looks like a success to me. But I realize a lot of my enjoyment is tied into my awesome guild experience. When I heard about the PVP issues, my first thought was “Good, at least they didn’t break something that mattered”. There are a lot of problems in the game, but everything I have seen has been a polish issue, for whatever reason the game seems to have missed a final polish past to prune the little things that just stack up to be annoying.

  5. I’ve heard from some personal friends, and the general web, that SWTOR lacks things to do at ‘endgame.’ I remember hearings months before the game released that there would only be one raid dungeon at level cap. Being a business model based on player retention, I think we could all see this coming. Bioware’s got themselves in a bit of a mess here. They’ve got cleaning to do. I hope they can clean enough to break even… heh.

    • I forgot to make the point that many, possibly the majority, of people who play this type of game (themeparks) rush to the level cap to play the ‘endgame.’ That kinda factors into my previous post.

  6. Personally, my guess is that retention will be bad but that players resubscribing for a month or two at a time to play a different storyline will happen at a much higher rate than normal for an MMO – closer to how players do Bioware’s other games. This would make SWTOR less dependent on long-term sustained retention than your average MMO, where the whole experience falls apart if server populations get too low.

    That said, if the budget was actually over $300 million after all, I agree that the math very quickly swings in the wrong direction for EA.

  7. So far I am enjoying the game as well. I’ve seen the $300 million figure bandied about as well, but haven’t seen any verification of that number.

    As an old physics teacher I agree math doesnt lie. I just wish we had hard verifiable numbers to work with here. If we knew the actual investment number then we could project a more solid future for this game.

  8. EA went on record saying that even 300 million is nowhere near what they have sunk into it, and that they only need 500K steady subs to turn a profit (though who knows for how long):

    http://www.gamespy.com/articles/114/1147365p1.html

    EA would have to be out of their damn minds to sink even 150 million into it, honestly. I’ve always thought the development costs being bandied about were absurd.

    If you assume they need 500K subs for a solid year (and that they make 100% profit off of every sub), that means they only need 75K to break even by December. Were they expecting 425 million in box profits? Did they mean “Start making a profit in seven years?” Both very doubtful. Of course they certainly could have been lying.

    That said, the latest patch was indeed one hell of a royal cluster-f for PvPers. There aren’t enough 50s yet on a lot of servers to fill out a 50 only bracket, so que times for battle grounds are through the roof at 50. 50-45 would have been a more reasonable start.

    I also think the design for Ilum is fundamentally flawed, and I haven’t seen any signs that they have a good idea of how to fix it. If one faction outnumbers the other 4 or 5 to one, letting whoever wants to show up to the fight show up does not work. Didn’t anyone learn anything from Warhammer Online? They knew damn well how bad the faction balance on their servers is, why did they think the tweak in 1.1 would work? And how the hell did non-one notice that the patch lets players camp the spawnpoints of the opposing side? Pretty amateur hour stuff that isn’t making Bioware look too good.

  9. A couple of notes:

    • LucasArts’ cut is 33%. This would apply to box sales as well as subs, since SWTOR is set up, via accounting magic and the terms of the license, to be “profitable on day one.”
    • John Riccitiello, in the article Yeebo quotes above, said that the budget was “substantially less” than the rumored at the time $300 million. The fact that Riccitiello has been caught lying in the past aside, what does that mean? $250 million? $200 million? Both “substantially less” than $300 million, but we’ve also had word that it may have been even higher than the EALouse figure, and not just from the one guy I quoted.
    • Personally, I think $150 million is the minimum believable number for the total budget.
    • That EA had to have been out of their minds to spend this much money on it is the point.
    • I think the 500K subs number is just bullshit. It may work out that way on paper because EA expensed the development costs out to the parent company, meaning that SWTOR was essentially developed for nothing. But this isn’t imaginary money. EA had to actually spend it.
    • Development costs were borne by EA. Not a cent came from LucasArts, although they may have had their own costs related to the approval process, etc.
    • None of this has anything to do with whether the game is fun or not. Well, except the Ilium thing, which is a pretty big cock-up.

  10. Yeah I agree, whether EA is insane and/ or lying is what it boils down to as far as the business side of things. There are a lot of ways they could have pulled 500K subs from their butts. If that number isn’t right, the game could very well be utterly f-d.

    I guess we’ll have an idea in a few months, as quarterly reports don’t lie (they merely obfuscate). In the mean time, I’m finding the game to be a lot of fun personally.

  11. I just ran the numbers again using what I think are very optimistic sales (2 million) and retention numbers (90%) and the recently cited $200 million figure for total budget, and by the bottom of the hill it’s still running a loss of $5 million after 12 months. I may do a post about this, but don’t count on it.

    • Don’t forget to factor in the original license fee. My understanding is that when dealing with Lucas Arts you pay a very very very large license fee upfront just to get the rights to develop a game using their IP, additional exclusivity fee if you don’t want any competing product in the same category (which was probably the reason Star Wars Galaxies got axed) and then there is the percentage cut on each box sold along with a cut of each subscription. On the upside, I imagine BioWare/EA probably was able to work out lower fees than might otherwise have been the case thanks to their previous Star Wars games and dealings with LA.

  13. I wouldn’t say that Rift has crashed and burned at all. It’s only now that it’s starting to struggle to hold on to subs, but it was always in the delicate position of “the game I’ll play while waiting for SWTOR” for a lot of people. To their credit, Trion Worlds has been extremely proactive in offering incentives for people to stay. The key point, though, is that Rift didn’t cost $200 million to make, so the bar for financial success is much, much lower.

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