Before going in deep into making an educated opinion about SWTOR’s conversion to a F2P model I wanted to go over what happened at yesterday’s EA Earnings call. You can find the recording of the call as well as all the documentation at http://investor.ea.com/ . I will try and list the facts as they happened and offer my analysis of the events.
- 1 hour before the earnings call began it was announced that SWTOR will be adopting a F2P model alongside its regular subscription model and that it will be introducing a cash shop
- John Ricitello, CEO of EA, said the following in his fourth sentence of his speech to the investors: “The disappointing results of Star Wars: The Old Republic were largely offset by a powerful performance from Battlefield 3 Premium service“
- No exact number of subscribers was revealed but this was said: “Mentioned break even point was 500,000, SWTOR is well above that but under 1 million total subscribers. Offering two-tiered pricing plan in November.”
- SWTOR and BF3 were mentioned again in the following sentence: “Our diversity allows us to make up for a miss on one franchise (SWTOR) with a hit on another (BF3)”
- EA lowered their expected revenue and profit margins for the quarter and this is what they said about why they did it: “Star Wars is the primary driver for adjusted guidance to a lower number.”
- There was a question near the end about the future of Star Wars and this is what Frank Gibeau had to say: “The idea with F2P is to open the funnel and get some of the players back that we lost to churn. We anticipate that the mix between subscriptions and free to play are going to be balanced but we don’t foresee free to play revenues as incremental to anything that we discussed in the call.”
Lets analyze this information. Less than an hour before the investors call we find out that SWTOR is going F2P only 8 months after its launch. This is a major change of strategy and direction only 11 months after the game launched. Never has there been so much money invested, nor strategy about the subscription plan so quickly changed in the history of MMORPG games. The closest to come to this time frame is DC Universe Online by Sony Online Entertainment.
The next thing that happened is that CEO of Electronic Arts, owner of Bioware and the one that paid for development and marketing of Star Wars: The Old Republic, said in his fourth sentence of the address to the investors that SWTOR had disappointing results. The CEO of EA chose not to downplay how bad SWTOR is doing and basically opened his address to the investors by blaming SWTOR for disappointing results. Further into the investors call we also learned that they blame SWTOR for not reaching their revenue guidelines. This is huge in every way. When a CEO says something like this about one of company’s products this probably means the product is being discontinued at best. Combined with the fact that they fired half the people in Bioware, Austin, including higher-up staff, we see a company blaming and punishing everyone involved in a project for bad results and acting accordingly.
The subscriber numbers were not explicitly mentioned. We were given a range of bellow 1 million (which means out of 2 mil boxes sold they retained less than 50% customers), but well above the 500.000 bottom line they mentioned during their last investors call. This statement makes no sense when we calculate in the facts that they fired half the staff and announced one of the fastest conversions to F2P in MMO history. The moves they are making tell us that SWTOR is trending towards well bellow their bottom line and they are doing damage control right away. Their actions tell us that EA has labeled SWTOR a failure and is now just salvaging what can be salvaged.
The last thing I wanted to discuss is the statement by Frank Gibeau on what they expect in SWTOR’s future. This part is important “we don’t foresee free to play revenues as incremental to anything that we discussed in the call“. This tells us that EA does not believe in the Free to Play model as the one that will bring them significant increase in revenue and that they are probably doing it just to salvage the situation the best they can and perhaps get a few more dollars in the process.
- EA blames SWTOR for not meeting its Q1 goals and calls SWTOR’s performance disappointing
- EA anticipates that at current trends the subscribers would go bellow the bottom-line number of subscribers needed for the game to keep operating
- EA is making moves to salvage the situation and is now doing damage control and not trying to “fix” the game or “improve” the gaming experience
- EA does not believe in the F2P model for SWTOR
These are all terrifying conclusions for any fans of Star Wars: The Old Republic. I will be discussing the impact of these conclusions on the game itself and its future in my next article tomorrow. In the meantime please share with me your opinions in the comments section. I would love to hear everyone’s take on what happened during the investors call yesterday and what impact it will have on SWTOR’s future.
DISCLAIMER: All the opinions and conclusions in this article are that of its author. The author reserves the right to be proved he is wrong and is willing to hear the opinions of others on the subject. Please leave your comments in the comment section bellow.
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