Wednesday, February 2, 2011

SWTOR not doomed?

One of the few new MMOs I'm really looking forward to this year is Star Wars: the Old Republic. I was a big fan of the Knights of the Old Republic games, and (as I've said elsewhere) even if SWTOR turns out to be nothing more than "KoTOR III: Sub Fee Edition" it's still something I very much look forward too.

Citing possible development costs of up to 300 million, there have been some pretty gloomy predictions about the game's prospects of financial success. However, according to a short news blurb over at 1up, CEO of EA John Riccitiello claims it will only need 500K subs to be profitable. Now obviously, that doesn't address how long SWTOR needs to have a steady half million subs. Put differently, we don't know from the quote how long it will take the game to turn a profit at that level of subs. Further, you know for certain that the CEO of EA is going to try to paint a pretty rosy picture of the prospects of their largest ongoing investment. However, with those caveats in mind, 500K subs does not sound like an unreasonable target to me.

I don't think KOTOR is going to have an Age of Conan or Warhammer Online style post launch population implosion (i.e., only around 10% are still playing by the second month). I'll also be a bit surprised if they don't sell something in the neighborhood of two million boxes (almost certainly a million + boxes). Color me cautiously optimistic.

Update: Scott over at Broken Toys also covered the John Riccitiello interview in more detail. In the interview, Riccitiello also implies that the 300 million figure for development costs that's floating around is not remotely accurate.

Update 2: 1up incorrectly attributes the quote to CFO Eric Brown. It was actually CEO John Riccitiello according to the Gamasutra article they quoted. I guess that will teach me to check the source even on a "news" site.


  1. Note though that he says "profitable" and not "cover our investment". SWTOR numbers may certainly end up in black for whatever year it is released and more than cover the operational and new development costs from launch with 500K subscribers.

    It all depends how they want to play with numbers and definitions.

    Since it is a public company on NASDAQ, they would be very much driven to show up good quarterly numbers.

  2. @Sente: That's a good point. I assumed he meant profitable in the common sense (i.e., return on investment), but that certainly may not be the case.

  3. You hit the nail on the head, I think 500K subs can be definitely be profitable, but it depends on how long they can keep that number steady. Still, gotta remember that 500K times a $50-$60 box price isn't anything to scoff at either; maybe a drop in the bucket relative to how much was spent on developing the game, but those millions of dollars will will go a long way in those first few months. And honestly, I still don't know if I really buy that $300 million number.

  4. @Mmmogamerchick: I've always doubted the 300 million number, personally. It came primarily from EA louse as i understand it. An angry ex employee ranting on the web doesn't seem like a reliable source to me.

  5. Barring gross negligence on the part of EA, Bioware must have a business plan to insure SWTOR is profitable. All of this speculation is rather pointless when what we really need to know is whether or not the game is any good. Especially since most of the figures we've been debating have all come from a warm, dark place people don't like to think much about.

  6. @Anjin: LoL! So true at this point :-)

    I think a lot of folks already have a pony in the race, so to speak. Players that don't want to see MMOs move further in the direction of single player games want to see it fail, players that want developers to either continue or stop making big budget sub based MMOs want to see it succeed or fail respectively, players that want to see more compelling narratives in MMOs want it to succeed, ect.

  7. A majority of costs in such projects would be salaries, unless they license some quite expensive software to use. But if they do that it would anyway be expected to be cheaper than writing it themselves (i.e. paying salaries).

    Take a company which pretty much only have one new MMO in development, like ArenaNet. They have 150+ employees I believe. Let's double those numbers to 300.

    Let's say all those have what I assume would be a high salary for US games industry, like $100K annual. And assume they all work for 5 years.

    That ends up with 150 million USD, so still only halfway to the rumored 300 million.

    I certainly doubt the 300 million number. Even if there by some calculation of SWTOR related costs is possible to reach that number, I am quite convinced that it would not be SWTOR-only costs. E.g. they make investments that benefit SWTOR as well as other games development, they have people who work and contribute to multiple games, they set common infrastructure for many games etc.

    Unless a company just focuses on one game, I doubt it will always be straightforward and unambiguous to define the costs of a single game.

    If one looks at the quarterly reports for a company like EA they do not report costs for individual games, but in some cases report revenue for indiviudual games, which is more straightforward.

  8. If it's like Dragon Age: Origins it's going to attract a lot of players. DA:O is a very good story-telling game and worth a certain amount of time.

    The big question is whether after playing through a few classes the game will remain interesting. What compels you to play a story-based game when you run out of story?

    I suspect the answer is "not a lot" so we'll see a Warhammer style numbers cycle - a fast million box sales, triumphant noises from Bioware Mythic then rapid obscurity.

    Having said that I'm keeping an open mind.

  9. @Sente: that gives some perspective. I've always thought 300 million was unlikely mainly because I doubt anyone would be crazy enough to sink that much into a single game.

    @Stabs: the MMO elements are still what we know the least about. We know it will have some kind of battlefront style PvP, we know that there will be multi-player mandatory PvE instances, and not much else. I don't even know if an auction house is planned at this point.

    I don't think we are going to see a WAR style crash and burn mainly because WAR had a ton of fundamental flaws right out of the gate. It had some of the least compelling single player content I've ever I've ever seen in an MMO, losing a lot of players by the low 20s (myself included). That was compounded by the fact that they had waaay to many servers at launch. Since the best content in WAR critically depends on large and relatively balanced populations to work, the result was a rapid death spiral.

    In ToR everyone is at least going to stick around until they hit the cap, I would think. If the story lines have a lot of replay value, we may see players running multiple alts to the cap before they get bored and leave.

    I certainly agree that whether any one is playing in six months depends critically on whether there is anything fun to do besides the leveling game. However, I really doubt it's going to die as fast as WAR did. What I consider far more likely is something a lot like launch LoTRO.

    LotRO began with a decent leveling game (apart from a content gap that Evindim plugged) but no end game to speak of. By the time the Rift went in they had lost most of their hardcore "rush to the endgame" types. However, the bleed out was nothing like WAR and AoC.

    Despite the loss of their vocal harcores in the first month, the servers in LoTRO remained well populated and are to this day. If TOR can sell more boxes than LoTRO (almost a given) and manage that kind of population arc (very far from a given), I think it will do OK.

  10. I'd buy it on day one if it used the Guild Wars model. Since it's just another stupid sub game, though, I'll probably never buy it. I maintain that counting on subs to make your investment money back inevitably means soul-sucking grinds and idiotic time sinks; tricks to pad out that sub time.

    ...that aside, I think that it will sell well. It will be interesting to see the six-month and twelve-month retention and conversion rates.

  11. @Tesh: I agree with that last bit 100%. Whether it tanks or flies, SWTOR is going to have a big impact on the future (or perhaps lack there-of) of bug budget sub based MMOs.