Another One Bites the Dust: SWG Edition!

[eldaec]

The analyst you are quoting appears to believe mmog operation has no fixed costs. And I find it hard to believe that game has only cost $80 million to develop, despite supposedly using 900 actors, 100 devs, and a seemingly bottomless marketing budget. I'd take his analysis with a sizable pinch of salt.

[UnSub]

I agree. I thought the whole "EA treats development as R&D, so costs it separately and all revenue is pure profit" as especially... interesting idea.

That 30% royalty rate is one I've seen elsewhere, but I don't know if LA is getting that for SWOR.

[eldaec]

The analyst claimed 30% of profit, not revenue. Which means much less than $5 pm pp. (Though hard to know for sure as it seems he doesn't understand the difference)

[UnSub]

This was the info I meant:

“With 1.5 million paying subscribers, EA will have 1 million profitable subs,” Pachter continued. “We estimate that the incremental operating cost for each subscriber above breakeven is around $5 per month (also quite conservative), so if the revenue split is 33 percent to LucasArts ($5 per subscriber per month), EA will be left with $5 per subscriber per month in operating profit. At 1 million profitable subscribers over the last six months of its fiscal year, EA should generate $30 million in operating profit from subscribers.”

Personally, I think it is a bad assessment for a number of reasons - notably the "if SWOR launches and is immediately more successful than any other Western MMO since WoW, I think it will do alright" bit because, well, DUH.

I'm not sure what the fixed versus variable costs are for a MMO playerbase, though. That $5 a month (assuming SWOR launches at that $15 a month sub fee) in operating costs per player might work at the 1.5m level, but it would be higher at the sub-1m mark and the sub-500k mark.

I only mentioned Pachter as I've seen his analysis used elsewhere for why SWOR will be successful and is much cheaper than everyone thinks, but ultimately I think he is, at best, remarkably optimistic.

If I were LA, I'd be getting my cash up front every month rather than after it had gone through EA's books and profitability determined.

[Paelos]

A 33% royalty deal for the IP seems patently absurd.

[Stabs]

A 33% royalty deal for the IP seems patently absurd.

There's a mathematical case.

Game 1: original IP, one million subscribers paying $15, operating costs $2m per month, profit $13m per month.

Game 2: licenced IP, two million subscribers paying $15, operating costs $2m per month plus a third of the take after costs, profit $18.66m per month


Does the IP bring in that many more players? Well I watched Phantom Menace and Attack of the Clones last night and it made me very nostalgic for SWG. Particularly the music. Also little things like seeing Padme come out of a Small Tatooine House (Type 2). I'm more nostalgic for SWG than for any other game and most of what I liked about it I saw in the films yesterday.

[Paelos]

A 33% royalty deal for the IP seems patently absurd.

There's a mathematical case.

Game 1: original IP, one million subscribers paying $15, operating costs $2m per month, profit $13m per month.

Game 2: licenced IP, two million subscribers paying $15, operating costs $2m per month plus a third of the take after costs, profit $18.66m per month

It's a flawed case. Twice as many subs change your operating costs.

[Stabs]

A 33% royalty deal for the IP seems patently absurd.

There's a mathematical case.

Game 1: original IP, one million subscribers paying $15, operating costs $2m per month, profit $13m per month.

Game 2: licenced IP, two million subscribers paying $15, operating costs $2m per month plus a third of the take after costs, profit $18.66m per month

It's a flawed case. Twice as many subs change your operating costs.

OK

Game 2: licenced IP, two million subscribers paying $15, operating costs $3m per month plus a third of the take after costs, profit $18m per month

And that's not even considering that most of the cost is pre-launch development which is spent irrespective of the number of subs.

[UnSub]

I've got no idea what LA's royalty rate would be, only that about 30% of the take seems to be standard these days for Apple, Steam and it was what Microsoft wanted Cryptic to pay for an Xbox 360 version of Champions Online.

[Paelos]

I've got no idea what LA's royalty rate would be, only that about 30% of the take seems to be standard these days for Apple, Steam and it was what Microsoft wanted Cryptic to pay for an Xbox 360 version of Champions Online.

1 - That's different. That's not a royalty, but a distribution cost. In that case your distributor is getting a cut of the deliverable and that makes sense for it to be 30% since you are using their platform and they are performing a service for you. 30% for a sheer royalty is outrageous. The average royalty rate in the US is about 7%. Big named music artists can command about 10-20%. If you're paying almost a 3rd of your revenue out the door before you even get to your costs, you're losing money hand over fist.

2 - As to Stabs point, pre-launch development cost doesn't matter in terms of your product, other than from an investor ROI standpoint. It's already been expensed in a prior year anyway. Also, we don't know if those royalties are being paid on gross or net revenue, which is a HUGE factor.

[Amaron]

Even saying 30% isn't going to be clear.   Who knows if that's before or after continuing development/etc.

[Samprimary]

I'm more nostalgic for SWG than for any other game and most of what I liked about it I saw in the films yesterday.

Aw, cmon. SWG wasn't that bad.

[Zetor]

Apologies for necroposting, but since we're talking about an undead game, I suppose it's ok. Sorta. 

There's going to be a set of player/GM events during the last few months of the game, and as long as you have an active account on Sep 15, you can play for free until the lights go out. According to this thread (specifically this CM post), you can use your 45 free days* today or tomorrow, log in once, and you get 3.5 months of SWG for free! That's, like, the bargain of the yeardecademillenium.

My guild's doing just that -- we'll return to the ruins of our once-great player city for one last nostalgia-fueled hurrah and do some epic "slide off chairs while sitting" during the final days. Big-name MMOGs dying doesn't happen every day, ya know!


* SOE gave everyone 45 free days on its games due to the hacking epidemic earlier this year; the counter starts from the time you first log in.

[Lantyssa]

I logged in back then.  For two minutes.  Haven't been back since.  Definitely not going to bother paying them to let me into a dying game.  I'll just get sad again.

[Ratman_tf]

I'd do it, but my station account got nuked from all the hacking bullshit, and I can't remember my security question, so my account is effectivley locked down.

 

[DraconianOne]

So, last day.

Bye then.

[luckton]

So last day.

Bye then.

Play us out, Jimmy.

[Ratman_tf]

Farewell Star Wars Galaxies. We salute you!

[Soln]

so long backpacks inside backpacks with components for ingredients for blueprints or items.   Those last designs -- scavenger hunts, and the treasure crafting -- killed me.  Otherwise, sad day.   

Here's to the SWGEMU and related projects.

[Bunk]

So long HAM, you will be fondly remembered.

[Simond]

By whom?

[tazelbain]

Those of us who enjoy watching tears of nerds flow across the internet.

[apocrypha]

He didn't say remembered fondly.

[sinij]

I think this should be celebrated with necroing of NGE thread.

[Margalis]

Man HAM...I look forward to the day where Raph can admit that it was horrible in both execution and conception.

[eldaec]

Pistol damage....    Rifle damage....  why you no stack...?

 

[eldaec]

Honestly, I think SWG only failed because outcasting was never implemented.

[Njal]

I fondly remember pistol whipping Krayt dragons before they nerfed it. Man I could solo them, it just took forever.

[Paelos]

I fondly remember cancelling when I realized I only logged in to check my harvesters.

[Merusk]

I fondly remember cancelling when I realized I only logged in to check my harvesters.

[Raph]

Man HAM...I look forward to the day where Raph can admit that it was horrible in both execution and conception.

Execution, unquestionably. Conception, I can't assess until we get to actually try it and tune it. I may spend the time building a test app someday to find out.

[HaemishM]

Man HAM...I look forward to the day where Raph can admit that it was horrible in both execution and conception.

Execution, unquestionably. Conception, I can't assess until we get to actually try it and tune it. I may spend the time building a test app someday to find out.

Translation: IF ONLY IT HAD BEEN DONE RIGHT!!!! 

[Tannhauser]

Goodbye SWG, I had a few good times but you won't be missed.

[Fordel]

I never played SWG, I just laughed from the sidelines. 


Fare well!

[Raph]

Man HAM...I look forward to the day where Raph can admit that it was horrible in both execution and conception.

Execution, unquestionably. Conception, I can't assess until we get to actually try it and tune it. I may spend the time building a test app someday to find out.

Translation: IF ONLY IT HAD BEEN DONE RIGHT!!!! 

Absolutely. Hey now, keep in mind that when something was a plain old bad idea, I am pretty upfront about it. Closed economy in UO, for example.