Home Gaming Pachter stands by EA and The Old Republic

Pachter stands by EA and The Old Republic

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EA and Bioware’s Star Wars-themed MMO The Old Republic is haemorrhaging subscribers, forcing the addition of a free-to-play model – and leading many to wonder if the age of the subscription-based MMO is dead.  In spite of that, Industry analyst Michael Pachter has tried to qualm investor fear, saying EA is still a safe bet – and that Bioware’s MMO has a bright future ahead of it.

“We believe the free-to-play option and lower retail price will combine to significantly increase the number of Star Wars players by the end of the year as the two largest barriers to entry for potential Star Wars gamers (apart from an appreciation for the franchise and PC gaming) have been significantly reduced or eliminated,” he wrote in a note to investors, reports GamesIndustry.

“We expect the network effect to augment the number of gamers further. In the long-term, we believe the adjustments will result in incremental revenue and earnings growth as high-margin Cartel Coin purchases by a much larger pool of gamers and additional advertising generate more revenue than was lost through declining subscription fees and the lower MSRP.”

Pachter expects that the shift to free-to-play should increase the game’s subscriber base to at least 10 million active users – and potentially as many as 50 million. Seems unlikely; SWTOR currently has less than a million active subscribers.  One reason for Pachter’s bullish attitude to EA is the strength of their digital offerings – which is largely responsible for the company’s revenue from PC games eclipsing PS3 earnings. In the first quarter of this year, EA made $292 million from the Xbox 360, $276 million from the PC and $267 million from the PS3.

"We remain incorrigibly positive on the EA story. Despite a relatively low number of packaged good releases this year, we expect EA to grow revenue and earnings, primarily due to unrivalled digital strength. We believe EA represents the best opportunity for investors to benefit from continued digital growth for the industry next year, as well as from a likely rebound in packaged goods sales next year," Pachter said.

Last Updated: August 2, 2012

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