Gamasutra is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Gamasutra: The Art & Business of Making Gamesspacer
View All     RSS
May 16, 2022
arrowPress Releases
If you enjoy reading this site, you might also want to check out these UBM Tech sites:

Analyst: Wary EA Investors 'Betting Against'  SWTOR

Analyst: Wary EA Investors 'Betting Against' SWTOR

January 24, 2011 | By Leigh Alexander

January 24, 2011 | By Leigh Alexander
More: Console/PC

A hit MMO can be an excellent thing for a game publisher's investors -- depending on the business model, it can offer a certain degree of predictable revenue. For example, there's a certain degree to which World of Warcraft subscription revenues are a sure thing each quarter for Activision Blizzard.

With the Star Wars brand and BioWare at the helm of Star Wars: The Old Republic, it looks possible to make a case that Electronic Arts has a very good shot -- it seems safe, at least, for the publisher's investors to feel optimistic if not confident in the game's potential.

But EA's investors may not be ready to trust so easily, says Janco Partners analyst Mike Hickey. There are other factors surrounding EA at the moment that may weigh on their confidence, and the shares by extension -- people are waiting for more clarity on the Playfish portfolio and on the outcome of the Activision lawsuit, for example.

Mainly, though, Hickey says EA's investors know how difficult the MMO space is, and what an enormous risk it is to launch a title of SWTOR's scale -- and that in fact they may feel pessimistic.

"We believe many investors are betting against SWTOR achieving market success, provided the company's (Warhammer Online from Mythic) and industry's track record at releasing successful new MMOs," suggests Hickey.

EA's last big MMORPG effort, Warhammer Online: Age of Reckoning, became something of a cautionary tale in setting high expectations for a major MMO launch. Much was made of the title's potential to reinvent player combat and social dynamics in an online world, and the outspoken enthusiasm of Mythic co-founder Mark Jacobs played a role in the broad view that WAR represented EA's ambitious bid to challenge WoW.

But the title's launch was anticlimactic; despite drawing an impressive 500,000 subscribers in its first week, that number saw a rapid drop-off soon after, and a wave of server consolidations followed, giving the game's humble performance quite a visible profile.

Very recently, Realtime Worlds' All Points Bulletin gave game industry-watchers a new reminder of the devastating impact unsuccessful MMO launches can have on a company's operations, as the major studio closed, upending Scotland's game industry.

Other factors Hickey notices that might keep EA's shares a bit weighted include "a suspected subscription pricing model versus a market that is quickly transitioning to free to play, generally modest previews of the game and elevated development expense and suspected aggressive royalty to LucasArts."

Related Jobs

Question — Tiburon, California, United States

Question - South Park - Lead Level Designer (WFH/Remote)
Fred Rogers Productions
Fred Rogers Productions — Pittsburgh, Pennsylvania, United States

Producer, Games & Websites
Build a Rocket Boy Games
Build a Rocket Boy Games — Edinburgh, Scotland, United Kingdom

Lead Animation Programmer
Build a Rocket Boy Games
Build a Rocket Boy Games — Edinburgh, Scotland, United Kingdom

Lead UI Programmer

Loading Comments

loader image