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LucasArts will take roughly 35 per cent of the revenue made by Star Wars: The Old Republic once EA earns back its investment, according to analyst Michael Pachter of Wedbush Morgan.
Speaking to Eurogamer, Pachter stated:
“I think [EA] will make a profit.
“The revenue split is around 35 per cent to LucasArts after EA earns back their investment. That means EA keeps most of the revenue from disc sales (they have marketing expenses and need to staff up the server farms), 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.”
Pachter went on to say the MMO is likely to bring in 1.5 million subscribers, bringing in an $80 million a year profit.
“On an ongoing basis, they will split revenue from running the subscription business. My best guess is that they will attract 1.5 million subscribers paying around $15 a month, so they should generate around $270 million in revenue. If LucasArts gets 35 per cent and if EA incurs around 35 per cent operating expense, they make 30 per cent, or around $80 million per year, in profit. That’s not bad.”
However the game will only need a fraction of that userbase in order to make a profit.
“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. That means they make money at 500,000 subscribers.”
Speaking then to EEDAR VP Jesse Divnich, Divnich told Eurogamer that he sees little risk failure for Star Wars: The Old Republic, believing it will bring in three million users by June 2012.
“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.”
Activision Blizzard CEO Bobby Kotick recently said he believed LucasArts will be the principal beneficiary of Star Wars: The old Republic’s success.
The Old Republic will release December 20 in North America and Europe.
About the Author
Star Wars: The Old Republic
- Platform(s): PC
- Genre(s): Massively Multiplayer, Massively Multiplayer Online, RPG, Science Fiction
