Is it fair to consider SW:TOR a failure?

[notorious98]

From a gaming standpoint you are absolutely correct, I am comparing apples to oranges.

But I am not talking about gaming, I am talking about money. The EA investors don't care if its games, coal, pharmaceuticals, or whatever else. They put money in, and they want money out. EA needs to deliver on that, and SWToR did not do that at the level it could/should have, thus it was a failure. Circuit City made money, but the company was still shut down and considered a failure because it wasn't making" enough" money.

MMOs can most definitely compete (and dominate) FPS games when it comes to revenue/profit. In 2011, Blizzard had 2 games out, Starcraft II and WoW. Starcraft II pulled in about 250 million, not too shabby. WoW had around 2 billion in revenue for 2011. Now granted WoW is expensive to run, but WoW dwarfs the amount of money made by Call of Duty, and WoW continually runs.

EA most definitely entered the MMO market expecting to reach those levels eventually, they wouldn't have invested 200 million dollars expecting to make 100 million over 10 years.

Actually, WoW, with all of its race changes and other cash shop frills, brought in $1.357 billion dollars in 2011. Within its first 16 days on the shelves, CoD:MW3 had hit the $1 billion mark. No, WoW did not dwarf CoD in even the smallest facet. But, remember, you're talking about the anomaly that is WoW. It's definitely not the norm and most people educated enough in the industry understand that there will likely never be another that does what WoW has done when it comes to subscribers. Also, I said this in another post, game industry analysts have been criticized for not understanding the industry itself, considering how relatively new the genre is on the market. Many investors listen to these market analysts and make decisions based off of that. Yes, EA is tasked with pleasing their investors, and maybe their investors foresaw something else, but that comes with not understanding the industry or the product and isn't a result of EA's failure.

As for your Circuit City comment, the company hadn't turned a profit for the 2 years prior to filing for bankruptcy. Just thought I'd fact check you a little.

[Rooflesstoofless]

Too early to tell if it failed, IMHO.

They might be able to turn a decent profit once they go F2P.

[RoninaThorstone]

I understand CoD is Activision Blizzard, but I also understand WoW is a huge money maker for them and delivers every single year.

WoW has 10 million subscribers, 4.5 million in US/EU and 5.5 million in China. US/EU players pay $15 a month, China players average $5 a month. On subscriptions alone, WoW generates 1.07 billion per year, not to mention all the in game crap they sell, character transfers, releasing a new expansion every 2 years. I wouldn't be surprised if WoW generates 1.5 billion per year or more, which would be almost 40% of Activision Blizzard's revenue.

Chinese players play 60 hours a month?

I think your estimate on their gaming is off.

Edit: Also, they don't have 10 million anymore.

(they haven't for a while now)

[Intoeternity]

Chinese players play 60 hours a month?

I think your estimate on their gaming is off.

Edit: Also, they don't have 10 million anymore.

(they haven't for a while now)

http://www.mmo-champion.com/content/...0M-Subscribers

[Coleslaw]

Going from a paid subscription model to Free 2 play in less than a year, also saying "Yea, we are going after Warcraft" and failing to do so.....

Yup, it's a failure.

[notorious98]

Going from a paid subscription model to Free 2 play in less than a year, also saying "Yea, we are going after Warcraft" and failing to do so.....

Yup, it's a failure.

There was never anything of the sort said by EA. They said they were going after their market. Which they are. Which every MMORPG does when it comes out.

[tennesseej]

Chinese players play 60 hours a month?

I think your estimate on their gaming is off.

Edit: Also, they don't have 10 million anymore.

(they haven't for a while now)

The $5 figure per month from Chinese players comes from this: http://www.quora.com/How-much-does-a...-cost-in-China

4000 minutes of game time for $4.66. That's 2.2 hours per day if you play every single day. I have heard the $5 per month tossed around for China a lot, seems pretty reasonable. I am not sure where you got the $60 a month from.

[notorious98]

The $5 figure per month from Chinese players comes from this: http://www.quora.com/How-much-does-a...-cost-in-China

4000 minutes of game time for $4.66. That's 2.2 hours per day if you play every single day. I have heard the $5 per month tossed around for China a lot, seems pretty reasonable. I am not sure where you got the $60 a month from.

He said 60 hours a month. Which is actually 6 less hours than what you just said.

[tennesseej]

Actually, WoW, with all of its race changes and other cash shop frills, brought in $1.357 billion dollars in 2011. Within its first 16 days on the shelves, CoD:MW3 had hit the $1 billion mark. No, WoW did not dwarf CoD in even the smallest facet. But, remember, you're talking about the anomaly that is WoW. It's definitely not the norm and most people educated enough in the industry understand that there will likely never be another that does what WoW has done when it comes to subscribers. Also, I said this in another post, game industry analysts have been criticized for not understanding the industry itself, considering how relatively new the genre is on the market. Many investors listen to these market analysts and make decisions based off of that. Yes, EA is tasked with pleasing their investors, and maybe their investors foresaw something else, but that comes with not understanding the industry or the product and isn't a result of EA's failure.

As for your Circuit City comment, the company hadn't turned a profit for the 2 years prior to filing for bankruptcy. Just thought I'd fact check you a little.

You are correct about the 1 billion in revenue by MW3, dwarf was perhaps a poor choice of words. I would argue though that the Cost of Revenue for a game like MW3 is higher than for WoW, which means that the profit Activision made from WoW's 1.357 billion was more than MW3's profit, even if you scale MW3 up by 0.357 billion. That is because WoW keeps on giving after they release the expansion. Their cost to upkeep WoW vs the revenue they get is what makes WoW beat out the other games.

As far as Circuit City goes, their financial records indicate no profit for 2 years. Although to be fair, their 2nd to last year was barely low, they were less than a tenth of a percent from being profitable, and even their last year their profit margin was only -2.72%, not really a time to be jumping ship (heck, EA wasn't profitable in 2009, 2010 and 2011, and their margin was around -10%). However, that doesn't mean the investors didn't make money of Circuit City going under. Circuit City just got to a point that it wasn't making "enough" money, so the investors cut their losses, tanked it, made some money off of it's fall and moved on.

---------- Post added 2012-10-14 at 04:42 AM ----------

He said 60 hours a month. Which is actually 6 less hours than what you just said.

You are right, I misread that, sorry HK-51!

[Kelimbror]

I would argue though that the Cost of Revenue for a game like MW3 is higher than for WoW

How you could even begin to argue such a ridiculous statement is beyond me. Rehashing a game and upping the graphics takes less manpower and less time than the constant upkeep and design for an MMO as prevalent as WoW. In fact, bringing in Cost of Revenue only goes to further prove that WoW is a drop in the bucket compared to the CoD franchise.

[tennesseej]

How you could even begin to argue such a ridiculous statement is beyond me. Rehashing a game and upping the graphics takes less manpower and less time than the constant upkeep and design for an MMO as prevalent as WoW. In fact, bringing in Cost of Revenue only goes to further prove that WoW is a drop in the bucket compared to the CoD franchise.

Cost of Revenue is not the same as Cost of Development. WoW has a way higher Cost of Development, of course. Cost of Revenue means how much did the company spent to sell that individual unit, not make that unit valued to the customer. For WoW the cost of the servers is around 64 million a year (5.6% of the Revenue from subscriptions), and that is their only Cost of Revenue. For a game like CoD that is mostly on consoles, you have the cost of the game disks, the packaging, shipping to retailers, and maintaining the CoD matchmaking for free.

WoW does do some disk sales, but it's for their expansions and I have never mentioned the money that WoW makes off selling expansions in the debate thus far. WoW is also increasingly going to digital downloads, so it's Cost of Revenue is going down, while CoD's cost of Revenue is going up. As your Cost of Revenue goes down, you make more money.

Check out any random companies financial statements to get an idea of how things break down, where money is spent, and what goes into making an actual profit. Here is a link for Apple just an example: http://www.google.com/finance?q=NASD...UMDSI6mjiALSLQ

[anyaka21]

Even if the numbers were significantly off, say the game only cost 50 million to make and you double their revenue (which is definitely a ridiculous assumption to skew the numbers in the other direction) it doesn't even come close to the profit margin of Call of Duty Black Ops, which is why EA is looking at SWToR as a huge failure.

So where do you see a quote or anything financially that EA said that SWTOR is a failure. Let's face it, you're still making up numbers and bs facts to back up your assumption.

Add that CoD and the financials therein don't tell the whole story either. $30mil to make, but Blizz still maintains servers, there is probably still upkeep costs associated with the PS3, Xbox, Wii, and PC of which there is not a monthly subscription from the gamers, thus, just as GW2, it relies on the population continuing to buy the product.

---------- Post added 2012-10-14 at 05:55 AM ----------

I understand CoD is Activision Blizzard, but I also understand WoW is a huge money maker for them and delivers every single year.

WoW has 10 million subscribers, 4.5 million in US/EU and 5.5 million in China. US/EU players pay $15 a month, China players average $5 a month. On subscriptions alone, WoW generates 1.07 billion per year, not to mention all the in game crap they sell, character transfers, releasing a new expansion every 2 years. I wouldn't be surprised if WoW generates 1.5 billion per year or more, which would be almost 40% of Activision Blizzard's revenue.

Your posts completely fail because you continually make up numbers that have ZERO basis in fact.

1) China pays blizzard a basic FLAT FEE for the rights to market WoW in China, $50,000,000 is that last number I've heard. Of which, it is unclear how much residual income Blizzard gets from the subs themselves, if any at all. NetEase runs those servers in China and will most likely take the vast majority of whatever income that generates because there is no way they are going to do that at a loss. I'm sure China only does it because it earns them money.

For Blizzard it's free money. They get paid and don't have to deal with any of the residual costs associated with running the game.

So please, instead of the "well lets just say they run at a cost of...." and "lets assume" and "I guess" , please, lets deal a little more in facts and figures.

and yes, I'm going to speculate here, if the average player in china generates $5 a month, China still needs to recoup the costs of paying Blizzard and running the servers. I'd guess that if Blizzard does get some residual, it's only going to be about $.50 per that $5.

[RoninaThorstone]

http://www.mmo-champion.com/content/...0M-Subscribers

Yeah.

Lets check back in 4 months on that figure.

After everyone who was just 'taking a look' has fled.

[Banzhe]

The game was fun leveling to 50, the problem is once you get there the game is dead. No dual spec in a game these days, and 4 major patches later and still nothing is laughable. I personally played a Sorcerer, lightning to 50, then flipped to healing for our guild. I made the mistake of dropping all my credits into my professions and after switching specs a few time was completely broke and unable to afford to switch twice per day when I wasn't raiding. That is why I quit playing, and for that reason alone the game is a dud for me. Such a simple thing to code!

That bolded bit could very well end up being the demise of wow over a period of time.., not mainly due to competition from other developers as I see blizzard still setting the bar when it comes to mmo's, but

Take the MoP expansion, it took barely a week before the complaints about everything being to "time consuming" hit the forums, and with that we all know it won't be long til the first nerfs hit the raids. (Consider it's 1 week which is nothing in the life-span of a full expansion)

Looking back at expansions in wow specifically, the cycle is repeating and spinning out of control when blizzard reduces their content to cater for "no timers", long before an expansion is due to be replaced people are sitting at max level doing nothing but farming content.., essentially having nothing to do, but still feel compelled to log on just to farm. (A lot of players choose to unsub though which will eventually lead to lost customers)

Perhaps that is what developers elsewhere should focus on, deliver a game that might take some time to figure out, play right, and achieve things in so it's not just a cycle of fast leveling and then straight up farming.., and then stick with it so it's not being broken down by fastfood gamers, simply put, know that they will end up with a loyal and steady base of players.

[OneSent]

I think most of you are forgetting that the question has two sides to it:

1. Is it fair to consider SW:TOR a failure in terms of profit made?

2. Is it fair to consider SW:TOR a failure in terms of player interest?

I see a lot of people throwing around how much money the game made as an indicator of it's "success". Sure, EA might have made a decent chunk of change from the game, but how many of those who paid for it are still around? How would you define "a failure"?

Do you think a game is successful if it makes a lot of money at the start, but loses most of it's players in under a year? Or would you consider a game successful if it didn't make much in the money department, but retained a dedicated and steady player-base throughout it's lifetime?

At what point does the purpose of making money outweigh the importance of delivering a solid product?

If the free-to-play market didn't exist and Bioware/EA had no choice but to continue the game as is, do you think SW:TOR would be able to survive on it's own? They are pretty much pinning their hopes on a new influx of players by going F2P next month, but if they didn't have that option, what would the population of the game look like 2 years from now? 5 years?

[Kelimbror]

Cost of Revenue is not the same as Cost of Development. WoW has a way higher Cost of Development, of course. Cost of Revenue means how much did the company spent to sell that individual unit, not make that unit valued to the customer. For WoW the cost of the servers is around 64 million a year (5.6% of the Revenue from subscriptions), and that is their only Cost of Revenue. For a game like CoD that is mostly on consoles, you have the cost of the game disks, the packaging, shipping to retailers, and maintaining the CoD matchmaking for free.

Let's use the handy interwebs here:

"The total cost of manufacturing and delivering a product or service. Cost of revenue information is found in a company's income statement, and is designed to represent the direct costs associated with the goods and services the company provides. Indirect costs, such as salaries, are not included"
So the direct costs in delivering a product. Well, I'd rather not clog up the machine with 100 links, but suffice to say that the costs of producing a blu ray disc and packaging along with the higher price point of console games leads me to tell you that you are still wrong. Unfortunately we won't ever see a break down of that figure by product, so it's not really worth arguing over.

Additionally, you fail to account for the 2 Million paid CoD Elite subscribers.

What I think is more interesting is that looking at EAs Cost of Revenue for the past 4 years, since this thread is about SWTOR. They are in the black for the first time in those 4 years, so using the logic applied in all of these threads...naturally SWTOR saved EA and is thus an overwhelming success. (we can ignore that BF3 was pretty good)

[SirRobin]

Should probably list sources again.

How much did TOR cost?

Eighty million
Here: http://www.gamespot.com/news/star-wa...nalyst-6312400

NOTE: Pachter has always seemed to love whoring himself out to anyone that will quote him. So I stopped paying attention to his, "look ma, I'm a video game analyst," years ago.

Implied one hundred million
Here: http://www.eurogamer.net/articles/sw...t-ever-project

Almost two hundred million
Here: http://herocomplex.latimes.com/2012/...tic-gamble/#/0

Three hundred million claim
Here: http://www.1up.com/news/ea-louse-blo...hammer-failure

How many subscribers does TOR need?

TOR profitable with half a million
Here: http://www.gamesindustry.biz/article...h-500-000-subs

What was TOR's Development like?

Throwing people at the problem
Here: http://www.pcgamer.com/2012/03/08/be...t-the-problem/

When the Beta "changed"
Here: http://www.mmorpg.com/discussion2.cf...891478#4891478

Casualties of TOR?

One of the two BioWare brought in to run TOR's development, Gordon Walton, actually "left" around ten months before it even got to the shelves. Around the time things changed in TOR's Beta and apparently not long before they started "Death Staring" features, in fact. Two months after TOR was on the shelves, and with the in-game exodus well under way, "biggest project ever" guy Eric Brown suddenly resigned. A couple months after that the layoffs began and would continue through July, including the other fellow they brought in to make TOR, Rich Vogel. Not long after that, the doctor who actually had "Austin" in his title, Greg Zeschuk, took it out of his title. Shortly we find out that Greg is actually taking more than a "vacation" and so, in fact, is Ray Muzyka. Matt Bromberg, with little to no MMORPG background, supposedly took over TOR and Austin in May.

[notorious98]

You are correct about the 1 billion in revenue by MW3, dwarf was perhaps a poor choice of words. I would argue though that the Cost of Revenue for a game like MW3 is higher than for WoW, which means that the profit Activision made from WoW's 1.357 billion was more than MW3's profit, even if you scale MW3 up by 0.357 billion. That is because WoW keeps on giving after they release the expansion. Their cost to upkeep WoW vs the revenue they get is what makes WoW beat out the other games.

As far as Circuit City goes, their financial records indicate no profit for 2 years. Although to be fair, their 2nd to last year was barely low, they were less than a tenth of a percent from being profitable, and even their last year their profit margin was only -2.72%, not really a time to be jumping ship (heck, EA wasn't profitable in 2009, 2010 and 2011, and their margin was around -10%). However, that doesn't mean the investors didn't make money of Circuit City going under. Circuit City just got to a point that it wasn't making "enough" money, so the investors cut their losses, tanked it, made some money off of it's fall and moved on.

Do you actually know anything about what happened with Circuit City? There was only 1 company willing to buy a portion of them. Let that sink in. 1 company and only a portion. Nobody was willing to buy out Circuit City. They owed $119 million to HP, $116 million to Samsung, and $60 million to Sony. Because of their financial woes during the 2008 economic crisis, people didn't want to give them products that might wind up in shut down stores. Much of that was due to their increasingly negative profitability. Besides. It doesn't matter what you think. They weren't profitable, you said they were, you were incorrect.

As for MW3, I said $1 billion in the first 16 days. Considering it was released in the beginning of November, that doesn't account for the next month of Christmas shopping. It doesn't account for the next 300 some odd days until they release Black Ops 2. Trust me, I'm willing to bet the game already surpassed WoW in gross revenue. But you can't sit there and make assumptions about how much CoD costs to make as opposed to how much WoW costs to maintain. You don't know, so you're just pulling shit out of your ass.

[tennesseej]

So where do you see a quote or anything financially that EA said that SWTOR is a failure. Let's face it, you're still making up numbers and bs facts to back up your assumption.

Add that CoD and the financials therein don't tell the whole story either. $30mil to make, but Blizz still maintains servers, there is probably still upkeep costs associated with the PS3, Xbox, Wii, and PC of which there is not a monthly subscription from the gamers, thus, just as GW2, it relies on the population continuing to buy the product.

---------- Post added 2012-10-14 at 05:55 AM ----------



Your posts completely fail because you continually make up numbers that have ZERO basis in fact.

1) China pays blizzard a basic FLAT FEE for the rights to market WoW in China, $50,000,000 is that last number I've heard. Of which, it is unclear how much residual income Blizzard gets from the subs themselves, if any at all. NetEase runs those servers in China and will most likely take the vast majority of whatever income that generates because there is no way they are going to do that at a loss. I'm sure China only does it because it earns them money.

For Blizzard it's free money. They get paid and don't have to deal with any of the residual costs associated with running the game.

So please, instead of the "well lets just say they run at a cost of...." and "lets assume" and "I guess" , please, lets deal a little more in facts and figures.

and yes, I'm going to speculate here, if the average player in china generates $5 a month, China still needs to recoup the costs of paying Blizzard and running the servers. I'd guess that if Blizzard does get some residual, it's only going to be about $.50 per that $5.

My other post had the link for the cost of WoW in China, since I am assuming you didn't read it here it is: http://www.quora.com/How-much-does-a...-cost-in-China

You are free to debate/refute my numbers all you want, but simply saying they are made up and having no basis in fact yourself doesn't make you any more credible than me. I can defend any number I used as part of an assumption and explain why/how I came up with that number. For instance the 4.5 million US/EU and 5.5 million China number comes from this: http://users.telenet.be/mmodata/Charts/Subs-1.png



EA would never come out and say SWToR was a failure at this stage of the game. There is still money to be made off of it, and that would tank the perception of SWToR down even further.

---------- Post added 2012-10-14 at 07:08 PM ----------

They weren't profitable, you said they were, you were incorrect.

Their sales were not profitable, it doesn't mean the investors didn't make money. I guess it depends on what you define as profitable, but I would say that if you invest in a company, and you made money, it was profitable (am I crazy?).

---------- Post added 2012-10-14 at 07:12 PM ----------

As for MW3, I said $1 billion in the first 16 days. Considering it was released in the beginning of November, that doesn't account for the next month of Christmas shopping. It doesn't account for the next 300 some odd days until they release Black Ops 2. Trust me, I'm willing to bet the game already surpassed WoW in gross revenue. But you can't sit there and make assumptions about how much CoD costs to make as opposed to how much WoW costs to maintain. You don't know, so you're just pulling shit out of your ass.

Even if my numbers are way off, does it change the point of what I am saying? SWToR did not make as much money as expected, thus it was a failure.

[Aeka]

Completely fail argument here. You have ZERO understanding of how WoW works in China.

1) China pays Blizzard for the rights to allow WoW to be played in China. This is funneled thru a company called NetEase. I think it's around $50mil per yer. So NO, not every game or company can sell it's product in China, especially on the open market, of which, I think in China, there is virtually none.

2) gamers there actually do not pay for the game. They don't pay for expansions either. They pay for time cards which are pay by the hour, and costs much less per month than the typical NA/EU user

3) A chinese customer only has to log in once and use an hour or so of game time every 6 months to be counted as a paying customer.

Thus, I think it is very clear that Blizzard can and does "pad" it's numbers with China. Is this wrong or evil of Blizzard to do this? No, not really, it is what it is. China is a good MMO market. The beauty of it for Blizzard is that it is essentially a pure profit market for them. China just pays them the money for the rights to play the game. Blizzard doesn't have to run and pay upkeep on servers, have to deal with server maintenence, pay people to run all of those blade servers etc... Pure profit.

But again, not every company can and does release their game in China. Thus by your words, it would be completely retarded to think they can.

---------- Post added 2012-10-11 at 12:53 PM ----------



Actually, if you look at the financials and their investor statements. yes they are worth less. About 94% less actually.

Looking at their 3month and year conference call investor statements we see this clearly.

94% of WoW's income comes from the NA/EU market, where only 6% comes from the Asia/Pacific market.
I'm not lying look it up.

Thus more than half of Blizzards gaming population comes from 6% of it's income.
And again, as per my above statement, this is a decent business model for Blizzard because they don't have to do anything. China runs everything and pays Blizzard around $50mil per year to let them play the game. Pretty sweet deal for Blizzard.

Never forget that EVERY company "pads" its numbers as much as it can legally do. One common way is rounding. It all depends on where you round to. But SWTOR has been playing games as well. Listing as "subscribers" players who had already cancelled their accounts. Refusing to even state what the actual numbers were ar the end of the last quarter.