SWTOR: EA Invests $80 Million, Committed to Winning Product

The highly anticipated MMO Star Wars: The Old Republic, developed by BioWare and Lucas Arts is getting big boosts by BioWare’s parent  company, Electronic Arts, in the best form possible: cold, hard cash. So far, EA is showing its dedication to a breakthrough MMO, committing at least $80 million into the development of SWTOR.

EA executives feel that the investment is well worth it, and anticipate reaching profitability with a seemingly low subscriber base. According to an EA report from Michael Pachter, a Wedbush Securities Analyst, notes that:

“EA will cover its direct operating costs and break even at 500,000 subscribers, meaning that with 1.5 million paying subscribers, EA will have 1 million profitable subs. 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.”

Not that anyone was doubting EA’s commitment to SWTOR. But this solidifies EA’s image that they are here to develop a game-breaking MMO with a deep storyline. However, SWTOR fans need to hang on a bit longer, because in the same breathe as reporting its financial commitment, EA also announced a possible delay on SWTOR release…January 2012.

Article by: Sam Shaw



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