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Kotick Questions  Star Wars: The Old Republic 's Profitability
Kotick Questions Star Wars: The Old Republic's Profitability
November 29, 2011 | By Mike Rose




Activision Blizzard CEO Bobby Kotick has made light of the idea that BioWare and Electronic Arts' upcoming Star Wars: The Old Republic MMO may steal users from World of Warcraft and end its reign of the MMO space.

World of Warcraft has lost nearly 1 million subscribers in the last three months, and analysts have suggested that the Star Wars MMO, due to be released next month, is shaping up to be the next big massively multiplayer title.

However, talking at the Reuters Media Summit yesterday, Kotick said that he questions whether EA will even make money from the upcoming title, given that it will be paying LucasArts for the licensing rights.

"Lucas is going to be the principal beneficiary of the success of Star Wars," he argued. "We've been in business with Lucas for a long time and the economics will always accrue to the benefit of Lucas, so I don't really understand how the economics work for Electronic Arts."

He said that he does not think The Old Republic will steal users from WoW, adding, "If you look at the history of the people investing in an MMO and achieving success, it's a small number."

In comparison, EA CEO John Riccitiello said earlier this year that The Old Republic will be "substantially profitable" if it sees at least half a million subscribers in total.

Elsewhere, Kotick discussed the success of Activision's Skylanders, noting that the game and corresponding toys have exceeded company expectations to such a degree that he believes it will sell out in the U.S. during the holiday season.

"[Skylanders] are in high demand. Retailers across the board are concerned that they will be out of inventory well before Christmas," he explained.

"There's nothing we can do because they are made offshore and we can't get product made that quickly."


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Comments


Michael Hahn
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While it might be true that they will be paying licensing fees. SWTOR will be a huge cash cow. Look at the demand in the beta. Look at RIFT. Its still doing well and wasnt a quarter as popular as SWTOR . I got the play 2 beta weekends and I will be buying SWTOR on day one. I dont know if Pandas are a good enough reason for me to pay for just 5 levels of content. People want content in zones and questing more then anything. SWTOR delivers in the quest and content experience with the awesome acting and cutscenes.



Today is 4.3 is WoW and I am excited to go back in and see if things will be improving with some of the new adjustments. This could be a 4 week trial until SWTOR releases. If WoW doesnt recapture my love for the game, i will be moving on for a while. I may come back but not til after I exhaust all content in SWTOR.



I am sure I am not the only one who feels this way. I like Blizzard and Bioware.

Torin Denniston
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I'm currently experiencing the dilemma of choosing between the two as well. However, my experience in the SWTOR beta has actually swayed me from my unwavering support of the game. The more I play it, the more it feels like WoW from 2 years ago, and that concerns me. I feel like by the time SWTOR players reach max level and test enough of the end game content that BioWare fixes it (because it WILL be broken), Blizzard will learn what lessens they can from SWTOR and use it to make WoW an even better game.

Juan Del Rio
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And Star wars merchendise is not? It's like the blind sniping at the blind.

Martain Chandler
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Whenever Kotick or Riccitiello open their mouths their comments are for the ears of the Wall Street Journal and Goldman Sacks.

Harry Fields
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/yawn ... more EA/Activision PR stunt crap. Its just like the MW3/BF3 thing. Any publicity is good publicity to Kotick and Riccietello.



SWTOR will be fine. WoW will be fine. They're both excellent MMOs with excellent DNA.

Eric Geer
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The reason ST:TOR will be successful is that it is...well...Star Wars. It has a bigger fanbase across the board than WoW will ever have. ST: TOR will bring people into the MMO world that have never played an MMO---I got to beta test for a bit--I've never played an MMO--there are some issues...but the game has me intrigued because I love the Star Wars universe. I know the history...I know the characters...I know the class types...I know the creatures...I know the planets..etc...It's exciting to see it all come to life...

Harry Fields
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The license helps, but if the core game sucks (Which by my personal account, SWTOR does not), nothing can help it (SW Galaxies).

It's pretty polished in it's pre-launch state. Not quite Blizzard polished, but far better and feature complete than most MMOs at launch. I truly believe it has a solid future ahead of it. While I doubt it will ever achieve 12 million subs, it will do well, and if Bioware treats it right and adds content on a timely basis (WoW's shortfall), all the better.

Michael Gribbin
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Licensed MMOs don't really work like that. I mean, despite their popularity, that style of game play is really niche. When you have the full fan base of Star Wars, only a fraction of those people are interested in video games. Within that fraction, a considerably smaller fraction is interested in MMOs, and then within THAT fraction, you have to convince them that this is the type of MMO that they want to play.



It's just easier to turn an existing video game into an MMO than to turn something else into an MMO. 100% of the fans of Warcraft 1 2 and 3 were players of video games. That made it a lot easier to sell an MMO in that world.



I love Star Wars. A lot of my early MUD experiences were SW MUDs in the late 90s. I was so amped when SWG was announced. But... I dunno man. It seems impossible to make the Star Wars universe feel "real" in an MMO context. I think it's kind of a fools errand to try. Maybe TOR will prove me wrong? :-

Tore Slinning
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I also love the Star Wars universe (although in recent history Dark Horse has done more for me then Lucas himself).



Still...tacking on a setting/franchise is not(nor should be) a panacea for game development.



I'm sure talking about the huge demographic star wars fans make, might score some points for the market analysts at a board meeting.



But how did Age of Conan fare with that equation?





Gameplay and rule mechanics still matter, just look what happened to Star Wars Galaxies.

Erik Carpenter
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I have to agree Koticks comments are never meant for anyone inside the gaming industry since it always comes off as crazy talk. While I do find the skepticism towards any new MMO's prospective success, grounded in reality. I find that Activision/Blizzard's has their own shortcomings in not addressing the proverbial "7-year itch". It affects the stability of marriages so you better believe it affects the stability in long term customer loyalty/retention. i.e "Seen it, Done it, Grinded it, OVER IT".

Cody Scott
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I played TOR's beta briefly and all i could think was this feels like wow.

Gareth Eckley
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Coke-Tic's experience of MMO's is being responsible for taking over the most successful game in the history of gaming and presiding over its decline. I do not see his opinion as being worth much in terms of gaming.

Gregory Kinneman
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I can't really see an IP competing with Warcraft except for Star Wars, and I would expect to see a significant dip in WoW subscriptions (at least 5%, maybe 10%) in the months following TOR's launch. Whether it will tip the scales and cause an exodus from WoW is another story, and one that I don't know if anybody expects.

Weston Wedding
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How many people even seriously toss around phrases like "WoW killer" and such anymore? This seems like useless mental masturbation. I don't believe SWTOR is even being billed by anyone as a direct threat to WoW so what is Kotick even responding to? Do we have to go through this with every MMO that seems potentially successful?

Harry Fields
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Also, is it just me, or does Kotick have one of those faces you would just relish punching, arrogance and megalomania aside?

Weston Wedding
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Hate to admit it...

Terry Matthes
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Why on earth would the CEO of one company make such comments towards another competing companies product publicly? It just doesn't make sense to me...



I also like how the article title and opening statements are about EA and the Star Wars MMO, but then the last third of the article is about a the success of Skylanders. Almost as if the whole point was to leave us with the thought that Skylanders are going to do very well. Which again has nothing to do with the title. It seems a little suspicious to me.

Jamie Mann
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The first paragraph of the article makes it clear:

"Activision Blizzard CEO Bobby Kotick has made light of the idea that BioWare and Electronic Arts' upcoming Star Wars: The Old Republic MMO may steal users from World of Warcraft and end its reign of the MMO space."



The loss of users to SWTOR would result in a loss in marketshare, which in turn could badly affect the share price. What Bobby's done is:



1) Refute the idea that they'll lose marketshare

2) Refute the idea that the new competitor has a sustainable business model

3) Highlight a new revenue stream with high profit margins (the toys especially are made for pennies and sold for dollars), to make the point that they have multiple revenue streams



All told, it makes perfect sense to me...

Joe McGinn
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Market leader claims to be leading market shocker. New at 11!

agostino priarolo
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"He said that he does not think The Old Republic will steal users from WoW, adding, "If you look at the history of the people investing in an MMO and achieving success, it's a small number.""





Lol! You are so going to loose your job this time.

agostino priarolo
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Seriously, Mr. K., if you were a different kind of human being and a true professional, you would love and appreciate other people talents and great work. Instead, you are just a sad noob.

Ken Nakai
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Actually, my problem with SWTOR so far is, outside of the voice work/dialogs and quests/missions, it's really ho hum. Even the graphics are a bit odd to me given the current state of things (I kept looking at the hair on people's heads...reminds me of the GI Joe action figures I had as a kid). Maybe it's just because it's beta but I don't think SWTOR will be THAT popular (WoW popular). I think, though, it'll do well enough. If EA's not lying about 500k being enough to be popular, I feel like they can hit those numbers (ignoring the initial flood and typical pull back after launch).



So, in the end, it'll be popular enough and profitable but a "WoW Killer" this isn't. Just like Aion, Rift, and everything else that was going to be and never did. Doesn't mean those MMOs are dead and buried, far from it. It just means they'll be able to grab their slice and sustain for a few years. WoW will continue to lose people though since people are really, really bored with it, but I know people who do the "WoW Killer Bounce": they leave WoW heading for the newest MMO that's gonna replace WoW for them then three to six months later they decide to head back to WoW because end-game PvP is better or something else about the new MMO they're playing is just not quite as good as WoW's.



Honestly, I'd love to see a real WoW killer but really...what is a WoW killer? Everyone compares all new mainstream MMOs with WoW and they expect them to follow the same conventions (down to key bindings and that exclamation point above NPCs heads), for good reason. If the next big "WoW killer" is going to be truly innovative and different, can you even compare it to WoW? How could it be different enough to not just bring people over during launch (the starved MMO masses tired of playing WoW) but keep them a year later?


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