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  (Source: nerdjunkies.com)
"Star Wars: The Old Republic" may not be released until January 2012

Analysts announced earlier this week that EA has invested over $80 million in the development of BioWare's first MMO "Star Wars: The Old Republic." 

"Star Wars: The Old Republic" is a new massively multiplayer online (MMO) game that is currently under development by BioWare and LucasArts. The game takes place 300 years after the events of "Star Wars: Knights of the Old Republic" and thousands of years before Luke Skywalker and Darth Vader, which is a fairly unexplored era of "Star Wars" chronology. 

Users will be able to choose from many different character roles such as Jedi or Sith, and give context to their personal story with the option to follow the light or the dark side of the Force. In addition, players can join friends through the game's battles.  

Now, EA has reported that its total investment in the "Star Wars" MMO has reached $80 million in development alone. 

"The contribution from the 'Star Wars' MMO is significant," said Michael Pachter, Wedbush Securities analyst. "Under the terms of its deals with LucasArts, EA is required to pay a royalty, but was required to front all of the development, marketing and distribution costs, as well as the costs of building out servers for the game. We estimate that LucasArts’ share is 33 percent of revenues, after EA recoups its investment in game development. Given that the game was in development for over four years, with an estimated 200 full-time developers working on it, we estimate that EA's investment exceeds $80 million.

"Fortunately for investors, the company expenses R&D spending, meaning that its revenues on sales of the 'Star Wars' MMO DVD will be pure profit. EA will be required to spend marketing dollars on the game, and we estimate total manufacturing, marketing and distribution spending will total around $20 million, meaning that at two million units sold, EA will generate $60 million of operating profit on the DVD sales." 

Pachter also noted that EA will not need a certain number of subscribers for "Star Wars: The Old Republic" to make a profit. 

"We estimate that EA will cover its direct operating costs and break even at 500,000 subscribers (actual number is closer to 350,000 subscribers), meaning that with 1.5 million paying subscribers, EA will have 1 million profitable subs," said Pachter. "We estimate that the incremental operating cost for each subscriber above break even is around $5 per month, so if the revenue split is 33 percent to LucasArts ($5 per subscriber per month), EA will be left with $5 per subscriber per month in operating profit. At 1 million profitable subscribers over the last six months of its fiscal year, EA should generate $30 million in operating profit from subscribers." 

EA also announced this week that the launch of "Star Wars: The Old Republic" may be delayed until January 2012. 



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RE: Another fail MMO?
By mcnabney on 5/8/2011 5:17:15 PM , Rating: 2
Don't post unless you know what you are talking about.

Both Neverwinter Nights 2 and KOTOR2 were created by Obsidian, NOT Bioware. However, I enjoyed both of them even though they were not as awesome as the original.

But the fail that is DA2 is concerning. Bioware rushed a very short sequel out and only created about 1/3 of the maps that would be needed due to constant recycling. I liked the eye-candy, but everything that made DA:O special was deleted in the complete consolification of DA2. It just felt like a big expansion, not a whole new game. Yeah, and chargin $60 for it. I feel ripped off now.

That said, the development cycle for SW:TOR is about the same as DA:O, so this could be a win and a sign of Bioware getting back to their strengths. If not, you can probably scratch that developer off the list of must-buys and consider them to be more EA shovelware.


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