EA's decision to transition MMO Star Wars: The Old Republic to a mix of free-to-play and subscription model has the "potential to actually drive overall revenues higher", claims Wedbush analyst Michael Pachter.
"On average, the hard core free-to-play market generates higher revenues per user than its social counterpart, with many firms averaging $4 – 5 annual average revenues per user (ARPU) on average monthly active users (MAUs)," explained Pachter. "We think that a franchise such as Star Wars has the potential to attract 30 million or more MAUs, suggesting that the free-to-play version of the game has the potential to generate $120 - 150 million in annual revenues.
"While the $15 premium monthly subscription model requires only around 600,000 – 800,000 subscribers to generate revenues at this level, it is clear that EA recognised that its Star Wars game is destined to continue to see premium subscriber numbers continue to decline. We envision that ultimately Star Wars will be free-to-play for all players, and we expect that it will be able to attract at least 10 million MAUs indefinitely, with upside to perhaps 50 million."
He concluded: "We believe that contribution from the model shift could be significant for years to come."
Star Wars: The Old Republic will become free-to-play up to level 50 in November.