Analysts think The Old Republic will do just fine

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The Sith Lord of gaming, Darth Kotick doesn’t believe that EA and Bioware’s The Old Republic will make any money – mostly because all of it will be going to George Lucas’ flannel shirts fund.

Analysts seem to disagree, and believe that The Old Reblublic will turn a profit for everyone involved.

Both EEDAR’s Jesse Divnich and Wedbush Morgan’s resident soothsayer Michael Pachter told Eurogamer that EA will still make bank even after LucasArts takes its cut.

“Licensors do take a piece of the pie and is an economical hurdle that entertainment has been struggling with for years,” Divnich said. “It’s a give and take scenario, but given EA’s historical ability to negotiate favorable license terms, I don’t believe Lucas’s share is a detriment to the game’s profitability.”

“The revenue split is around 35% to LucasArts after EA earns back their investment,” Pachter says. “That means EA keeps most of the revenue from disc sales, so they should earn a nice profit there. Keep in mind that EA expensed the development cost when incurred, so much of the disc sales revenue will be profit.”

EA’s said it needs half a million subscribers to make the whole thing profitable -something Pachter Agrees with.

“Most MMOs require around 250,000 subscribers to cover the direct operating expense of the server farms. Given LucasArts’ revenue split, SWTOR would require around 400,000 subscribers to break even,” he said.“That means they make money at 500,000 subscribers.”

There are currently over 900 000 pre-orders for the MMO.

“Based upon user commentary and consumer surveys, the profit potential for The Old Republic is high. We see little risk of failure for The Old Republic,” Divnich agreed. “Taking into account multiple years in service and expansion packs, $500 million in total revenue is not a far stretch. If an MMO can’t be profitable at $500m in revenue, than we are all doomed.”

I pretty much refuse to play MMO’s; I have little enough time for gaming as it is. Thing is? I loved KoToR and this is starting to pull me in. I have no doubt that it’ll be a better Star Wars experience than the actual films (those prequels, seriously?). Besides, LIGHTSABRE BATTLES!

[Thanks to Nick for the tip]

Last Updated: December 2, 2011

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