Analyst: WAR subscriptions will eventually settle around 250,000

[Mrbloodworth]

Business analyst Arvind Bhatia shared his predictions about Warhammer Online's financial future with Edge magazine yesterday. Bhatia, who works at brokerage firm Stern Agee, said he believes EA is ultimately shooting for around 250,000 - 300,000 subscribers once the launch dust clears, with occassional bumps when major content releases such as expansons occur.

Link

EDIT: Original source

[schild]

His math is off.

[Riggswolfe]

Are they shooting for these numbers or are these numbers they will be satisfied with? In this day and age those numbers seem to be low to be shooting for.

[tazelbain]

I think he saying he doesn't have a clue so he's going to throwing out DAoC numbers as a baseline.

[schild]

I'm about 90% sure those numbers are pulled out of a hat bullshit.

But then, being a video game sales analyst is a running gag anyway.

[Hawkbit]

Seems low... really low from my in-game experience.  I'm having fun, I think others will too. 

[Arthur_Parker]

My forklift driver mate Brian, reckons 500,000.

[Soln]

whatever Eve is at, take that

[Righ]

I would think that making bad guesses about MMOG market performance might impact Stern Agee and Leach's reputation in other markets too. I don't see the value for them in making such a guess.

[Grimwell]

I think he is being minsinterpreted. People think his focus is on the question "How many subscribers will this game get?" and he's actually answering this question: "How many subscribers must this game get?"

Here is the power quote:

Arvind Bhatia at Stern Agee told Edge on Tuesday he came to the 250,000 subscriptions figure based on EA's goal to break even on the game.

That's the break even goal, anything more is phat cash.

This quote:

"Over time, subscribers will drop off and level off at 250,000- 300,000," he said in a phone interview.

...is what people are reacting to.

You know what? He's right. Even if eleventy billion people subscribe to WAR for the next five years, eventually their numbers will fall down to this point and he can declare victory.

Eventually is being over interpreted to mean "soon"

It does not, and even if he ends up being right next week, those 250K folks equate to paying the bills for EA. Anything above that becomes an asset to the shareholders.

[schild]

Eventually people like that guy won't have jobs due to lazy predictions then.

[slog]

Eventually people like that guy won't have jobs due to lazy predictions then.

Eventually, people who understand what role analysts do will learn how to make money.  Those who don't will remain poor.

[lamaros]

Eventually people like that guy won't have jobs..

You mean the retards who get half a quote, take it out of context and post it as 'news', and not the analyst, right?

 

[schild]

I am genuinely interested, how does saying a MMOG will eventually level out at X somehow require analysis?

[slog]

I am genuinely interested, how does saying a MMOG will eventually level out at X somehow require analysis?

Not relevant in any way whatsoever.   From the orignal article:

"Over time, subscribers will drop off and level off at 250,000- 300,000," he said in a phone interview.

But he admitted that the number could jump as updates and expansion packs are released, adding that it would take about "six months or so" to get an idea of the MMORPG's sustainable user base.

He added that retail checks indicate initial sell-through is tracking "about in line with (but not above) expectations." He forecasts a higher mix of revenue from Europe compared to the U.S.

Bhatia estimates EA to generate $55-$60 million in revenue from WAR, or 5 percent of sales for the September quarter.

Users receive a month with the purchase of the game, and pay $14.99 per month, with discounts given if they pay for more months upfront.

"...Based on our estimates for sell through, it would require about 20 percent to 25 percent of the purchasers to remain long term subscribers--which we believe is achievable," Bhatia stated in an investor note.

Stock prices go up and down based on expectations.  When an analyst makes a prediction, the market instantly takes it into account, and the stock price changes.  Now, if you know the industry, and think you know more than the analyst, you buy or sell the stock accordingly.  For example

This guy thinks that WAR will generate 60 million in revenue based of his projected sales.  If you know he's full and shit and is projecting way to low, you buy the stock.  When the earnings come in, and are higher than everyone else expected, the stock goes up.  Conversely, if you think WAR is going to tank, then you short sell the stock, and when EA fails to meet Earnings expectations, the stock drops, and you profit.

The key being that when you know more than the analysts, you know more than everyone in the stock market. 

[lamaros]

Mmmm. Internet ate my bigger post. So, yeah. What slog said. This guy's analysis is not aimed at gamers. If he is a good analyst then it's pretty useful for a lot of people. If he's an influential analyst then it's also useful for a number of people.

[Triforcer]

I predict subs will eventually settle at zero.  Who wants to bet me? 

[cevik]

Random analyst:  "Sales of the new EA game are about what we expected, not above or below."

WAR Fanbois:  "HE INSULTED OUR GAME!11! KEEEL HIM!"

I have to say, I haven't purchased the game but I love it a little more every day.  Thanks Mythic.

[schild]

The guy didn't insult anything, he just did math that made no sense.

[Trippy]

I think part of the problem is the site is doing a bad job of paraphrasing what the analyst actually said. 250K for a "break even point" makes no sense unless there are time periods specified and the cost to develop/launch the game is known.

[UnSub]

I say we blame bad games journalism ("details are hard!"), sales figure prophecy oracles ("the duck entrails say... 800k at launch!") and easily distracted fanbois ("OMG WAR not awesome? LYNCH HIM!") for this thread.

[Typhon]

I don't like cluster-fucks that force grouping.  I like to be free to solo them.

[amiable]

easily distracted fanbois ("OMG WAR not awesome? LYNCH HIM!")

Where exactly is this?  I fail to see this "rabid fanboisism" that folks keep attributing.  Everytime Blizzard does something no one jumps onto the WoW boards and accuse folks there who are defending Blizzard of being "Blizzard fanbois."

[cevik]

easily distracted fanbois ("OMG WAR not awesome? LYNCH HIM!")

Where exactly is this?  I fail to see this "rabid fanboisism" that folks keep attributing.  Everytime Blizzard does something no one jumps onto the WoW boards and accuse folks there who are defending Blizzard of being "Blizzard fanbois."

Yay, we've reached the part of the thread where the WAR fanbois pretend to be superior to the WoW boards.

[Mrbloodworth]

I say we blame bad games journalism ("details are hard!"), sales figure prophecy oracles ("the duck entrails say... 800k at launch!") and easily distracted fanbois ("OMG WAR not awesome? LYNCH HIM!") for this thread.

Hay now, i only posted this because i thought it was an interesting topic, especially in contrast to our prediction thread. Its posted here for history, and the children, and all that. 

[amiable]

Yay, we've reached the part of the thread where the WAR fanbois pretend to be superior to the WoW boards.

[Draegan]

It's not very hard to ascend past the level of the WOW Main Boards. 

[amiable]

It's not very hard to ascend past the level of the WOW Main Boards. 

But I spent 3 whole minutes putting that together!

[cevik]

It's not very hard to ascend past the level of the WOW Main Boards. 

And yet you still can't do it.  sadf

[waylander]

The Fry Cook at McDonalds told me its 300,000, and surely he must know!

[Ironwood]

Fuck it, I'm not going to be sure of the facts until we hear from Bruce.

[Righ]

Eventually people like that guy won't have jobs due to lazy predictions then.

Eventually, people who understand what role analysts do will learn how to make money.  Those who don't will remain poor.

Inflating public and private investment in stocks that they have an undisclosed interest in so that they can make more money from people trading late on knowledge that they are already profiting from? Plenty of people earn decent (sometimes obscene) amounts of money without ever gambling on the stock exchange or the lottery.

[Hayduke]

Have any of these video game sales analysts ever gotten it right?  It just seems like a very lazy and slipshod profession on par with sports or videogame journalism.

[Mrbloodworth]

Have any of these video game sales analysts ever gotten it right?  It just seems like a very lazy and slipshod profession on par with sports or videogame journalism.

You can look at his history.

[Grimwell]

Fuck it, I'm not going to be sure of the facts until we hear from Bruce.

Your subtle humor pleases me.