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Analyst:  The Old Republic  sales concerns are 'overdone'

Analyst: The Old Republic sales concerns are 'overdone'

January 20, 2012 | By Mike Rose

Analyst group Macquarie Securities has released a new report which states that, while there are clearly concerns in the industry that Electronic Arts and BioWare's recently released Star Wars: The Old Republic isn't selling as well as first hoped, these outcries are "overdone."

Star Wars: The Old Republic released last month, and surpassed 1 million paid subscribers in just three days, the fastest any MMO has achieved that milestone.

Yet despite this strong start, publisher EA's stock is down 30 percent compared to its 52-week high price on November 4 last year, thanks in part to "speculation" regarding sales figures for the game from outside parties, suggests Macquarie's Ben Schachter.

Schachter notes that many of the issues which are being brought up are based on conjecture -- for example, the fact that EA has not yet given sales figures for the game does not automatically mean that numbers must be bad.

He also explained that, while retail sales of the title, as tracked by NPD, were weak, he expects that the majority of initial sales occurred through the Origin digital distribution service, and therefore have not been accounted for.

In light of this, the company has stuck with its "Outperform" rating, and believes that the game may achieve initial sell-in sales of 1.5 million -- although Schachter was quick to note that long-term sustainability of subscribers to the game is currently unclear.

Wedbush, another analyst firm, concurs with that stance and says investors' concerns are "overblown." The group estimates that Electronic Arts sold over 800,000 units last month through retail and Origin, and will have sold 2 million total in its first year of sale.

Though other analysts previously said the game may potentially sell 3 million units in its first year, Wedbush calls those predictions "not only unrealistic, but [bordering] on the absurd."

The analyst group, which also gives EA an "Outperform" rating, adds, "EA will generate significant operating profits from Star Wars in both [fiscal 2012 and 2013 (ending March)], and will generate considerable revenue growth year-over-year."

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