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Kotick on SWOTR Economics

An interview with Bobby Kotick mentioned here last night contains a bit we didn't notice at first, as GamesIndustry.biz (registration required) notes the Activision CEO opines on the business model of Star Wars: The Old Republic, when asked about the possible impact of the upcoming MMORPG on World of Warcraft. "Lucas is going to be the principal beneficiary of the success of Star Wars," Kotick said. "We've been in business with Lucas for a long time and the economics will always accrue to the benefit of Lucas, so I don't really understand how the economics work for Electronic Arts."

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30. Re: Kotick on SWOTR Economics Nov 29, 2011, 19:35 commonperson
 
Creston wrote on Nov 29, 2011, 19:18:
Cutter wrote on Nov 29, 2011, 18:36:

Please do the math for me. Explain how 350k subs are going to recoup 500 million and counting? I'll be really surprised if this isn't F2P inside of 2 years, probably less.


Every time you post about the game, the amount of money sunk into it goes up... 500 million... Really?

Most game review sites place the money anywhere between 100-300 million, and the 300 million is solely and alone because one guy blogged that he worked on it and it had cost "LIKE 300 MILLION DOLLARS, MAN!" And all they're doing is guessing, because no official figures have ever been released.

So now it's gone to 500 million? Come on. Even EA's marketing department can't spend money THAT fast.

Creston

Also current numbers are pegging around 900k of units in the USA alone, that's not even North America. That's AMERICA (http://www.vgchartz.com/charts/preorders.php)week ending November 26th.

Now add to that Europe and hell even the rest of North America and the Australia you are talking over a million (probably around 1.5 million if not more.) That's at launch. So let's make some estimates here, let's for simplicity sake say all 1.5 million people bought regular edition versions at 60 bucks. Not digital deluxe, not collectors, just plain brown paper normal that's 1500000 x 60 that's 90000000 just at launch. Now in reality you have digital deluxe and CE editions adding extra overhead and costs on top but really DE no reall cost CE it's really pennies as it's crap made in China by sweatshops so real overhead is low but they are getting 20 to 80 dollars on top of that.

Now that's 90 Million out of the gate, let's give it a TRAGIC drop off from 1.5 million users to say 750k even after first month (which I don't forsee but is possible) we're talking around a monthly take in of around 11 million and if it stabalizes there for a year we're talking around 113 million over one year. So if we see a 50% drop off over the course of the first year monthly subscriptions for that period plus initial buy in is aronud 200 million. Given the actual costs are subject to rumour and speculation (and there's no way it's 500 million at worst maybe 250 to 300 million and even 300's only source is a disgruntled former employee) they will have made their money back in the first year and a half and everything on top of that is pure cheddar.
 
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