Will EA Make Money With Star Wars The Old Republic?

Industry news is ablaze with quarreling perspectives on Star Wars: The Old Republic and how it will affect Electronic Arts’ bottom line.  EA has traditionally been going head-to-head with other big gamemakers in the console and PC arenas and has only recently tried to get a big chunk of the massive multiplayer online (MMO) market.  Their soon-to-release SWTOR MMO will take on giants like World of Warcraft and is one of the few to enter the RPG arena that might stand a chance of toppling the long-time giant.

Yet Activision’s CEO Bobby Kotick says that he doesn’t think SWTOR is going to make any real profit for EA.  As EA’s top competitor in the PC and console market, he’s likely in a position to know.

Kotick’s statements to Reuters explain his thoughts.  License agreements with LucasArts, who own the Star Wars franchise, are likely to be what rakes in the most income from the EA release of SWTOR.  Why?  Because the onus of heavy marketing, game development, and maintenance are all on EA.  Activision should know what these types of deals look like, they’ve franchised several lackluster Star Wars games.

Of course, politics are going to play a role here.  Activision stocks are down this year while EA stocks have risen by over 25%.

Further, some analysts disagree with Kotick’s statements.  The argument is that profits are what are split, not net revenues, which would mean that while LucasArts might be up to 35% of the take, it’s profit that’s being split, so EA would still retain the remaining 65%.

That seams more realistic, though the game itself has yet to release and is so far receiving mixed reviews from reviewers who’ve been in the beta.  We’ll find out for sure on December 20.


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