Bigpoint vs. BioWare: CEO says The Old Republic will never be profitable
Filed under: Sci-fi, MMO industry, Star Wars: The Old Republic
As a high-profile MMO, Star Wars: The Old Republic is proving itself to be a big target for attack. Bigpoint, the German game developer that's working on Battlestar Galactica Online, stepped up to take a swing at the as-of-yet-unreleased title.
At the London Games Conference, Bigpoint CEO Heiko Hubertz made the bold prediction that The Old Republic will never see a profit: "If you look at Star Wars from EA and BioWare, they estimated a development budget of over $100 million. This is an online game for many million of subscribers, so the publisher does not understand that a subscription model is not the future. With microtransactions maybe I see the game having a chance but I don't think that EA or BioWare will ever be profitable with this game."
EA BioWare has yet to release a definite pricing plan for TOR, although it is widely believed it will be subscription-based. Earlier this year, Dr. Ray Muzyka said that there will be "more of the traditional business model with maybe some twists as well."
At the London Games Conference, Bigpoint CEO Heiko Hubertz made the bold prediction that The Old Republic will never see a profit: "If you look at Star Wars from EA and BioWare, they estimated a development budget of over $100 million. This is an online game for many million of subscribers, so the publisher does not understand that a subscription model is not the future. With microtransactions maybe I see the game having a chance but I don't think that EA or BioWare will ever be profitable with this game."
EA BioWare has yet to release a definite pricing plan for TOR, although it is widely believed it will be subscription-based. Earlier this year, Dr. Ray Muzyka said that there will be "more of the traditional business model with maybe some twists as well."
Reader Comments (Page 1 of 4)
Hastur said on 1:11PM 11-07-2010
Am I missing something here? Lets say that TOR gets a million subscribers, which isn't outside the realm of possibility with a strong IP like Star Wars and a developer like Bioware. At 15 dollars a month, the revenue generated by this game would be 180 million. (1 million subscribers x $15/month x 12 months/year) Not to mention the profit made on the sale of the game itself. My back of the envelope multiplication is probably incorrect or grossly exaggerated, but I don't think that the number crunchers at Bioware would have made a game that has no chance of making a profit.
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Decanus said on 1:19PM 11-07-2010
yhea the bean counters at ea wouldnt let it muck up that badly when it comes to profits
Pingles said on 1:33PM 11-07-2010
The first month is free. How many subscribers stay on after the first month. I know that three of the last subscription games I bought I only stayed a few months.
Even if the game is great will it be enough to keep subscribers? It's gonna have to be different enough to stand out yet not be so different as to scare the WoW crowd off.
Tough call.
Perseus said on 2:13PM 11-07-2010
Is Bioware not allowed to make any money on box sales?
herlike_rm said on 2:23PM 11-07-2010
You are forgetting that the company has to make the money back within 3 months otherwise it is considered financial failure.
Joker said on 3:00PM 11-07-2010
@Pingles.
It's already a WoW clone full of bad ideas and seems like it will be a lot like Phantasy Star Universe.
I'm a big fan of Star Wars and KotOR but this game has nothing going for it except the IP, and the IP alone wont keep people paying.
marduk said on 3:39PM 11-07-2010
There's a few things you're leaving out: the price of the boxed game. You're assuming 1 million people subscribe for a year. Many might cancel after that first month or 3 months. The $100 million figure might be the development costs but how much will EA spend on marketing? If it's anything like Hollywood it wouldn't be unusual for them to spend -- who knows? -- $20 to $30 million perhaps on advertising the hell out of it. Then there's the expenses of running the servers from month to the month, the employees need to be paid, the electric bills need to be paid. So, all in all, maybe they'll break even. If it turns out like so many MMOs in that it just doesn't live up to the hype and loses 90% of its subscribers after 3 months it could really be struggling. But it's Bioware and Star Wars so you it's totally gonna rule!!! I mean, when has hype ever steered us wrong, fellas?
UnSub said on 9:05PM 11-07-2010
Just to throw in: please don't confuse revenue with profit. In rough terms, the dev studio only makes about 10% profit off box sales (so: $5 or so for a $50 game) and about 20% - 40% off subscription revenue (new titles get lower sub profits since operating costs are still very high, so something like $3 in every sub counts as profit). And LucasArts will want a royalty cut of everything.
Even in EA's own statements, for SWOR to be profitable it has to launch as at least the second most successful Western MMO and then stay there - they need their 1m+ players just to break even.
None of this is about BioWare's motivation, their talent or how good SWOR actually is at launch. It's about how much money they can actually make out of NA / EU PC players versus how much EA is investing in the title. In my mind EA would have made more money by releasing KOTOR 3, 4, 5 etc, but they want a MMO as big as WoW, so here were are.
matix said on 1:12PM 11-07-2010
The facts in the article tell the whole story. Hubertz doesn't know SWTOR's pricing plan or full range on income generation any more than he can 100% say what the future will bring.
As such, Hubertz is speaking from either--at best--a presumptive guess based on his knowledge of the industry, or--at worst--sheer ignorance.
Since we're speaking out of--well, the air, let's say, let me make a prediction about Hubertz's MMO offering: Euro-game + relatively unknown IP + IP whose most recent incarnation was more about soap opera stories than traditional MMO gameplay = not a WOW killer.
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fakeassname said on 5:32PM 11-07-2010
most mmo players who do not play WoW either #1 don't pay sub fees (I.E. players who like Runs of magic / Guild Wars / Planet Calypso) or #2 don't like TOR's format (I.E. players who like EVE / Fallen earth / Darkfall). the only way this game is going to pull in a million subs is if it pulls them away from WoW, with cataclysm about to launch I don't think that is going to happen.
this guy's probably not too far off base, sure he's pulling a marketing stunt for publicity, but being a one pound fish in an over loaded pool I'm sure he knows what he is up against. it's not hard to figure out the odds of adding in anther thousand pound shark when you've already done the math for your own odds.
1-3 HUNDRED MILLION DOLLARS is a shit pot of money to pump into a game, paying that back while also funding continued development and supporting the game is not going to be easy. add in that it most of that money isn't looking like it's going towards increasing the quality and quantity of the content of the game ... TOR looks like a 5-7 year (development time) game that is being produced in 3 years. all that money sure seems like it is being spent on making the game faster instead of better.
Cirocco said on 1:18PM 11-07-2010
Deja vu...I remember someone predicting that Blizzard's fledgling MMO World of Warcraft would be hard-pressed to make a tidy profit with its initial hefty investment anytime soon, and yet look at where Blizzard's juggernaut MMO stands now. I also recall that many naysayers saying Blizzard's lack of MMO experience would be a drawback. Well apparently not.
In this climate, no one can be quite sure how successful Bioware's Star Wars opus will be. But Bioware has a strong track record and devoted fans, much like Blizzard. I can't say the same with Bigpoint and its flagship Battlestar Galatica Online.
Bioware can roll the dice and see what success awaits its MMO. Good luck!
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Dude said on 1:19PM 11-07-2010
If Star Wars Galaxies isn't raking it in, aren't Bioware worried that something similar might happen to their MMO?
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Tyranor said on 1:34PM 11-07-2010
I think they're starting from the assumption that ToR won't suck.
MMOenthusiast said on 1:46PM 11-07-2010
That's because SWG went and changed 90% of the game after reigning in many devoted fans. Those changes are what people believe really killed it (NGE).
Since SWG showed the world what not to do to your game after a few years, a decent (IMO) analogy would be if World of Warcraft suddenly said "hey, we are going to cut the math for balancing hybrid classes by just cutting them out all together... these *new game enhancements* will allow people to focus on 'pure' gameplay without the headache of balancing all the different possibilities that these classes present in PvE and PvP". - I'm sure if Blizzard diluted its game in such a way, it would have a similar result that you see with SWG now.
matix says it best... this guy is making a claim based off of little to no real information.
I am no raving BioWare fanboi, but looking at the current and recent past MMO market, BioWare will certainly be able to retain a decent subscriber base just through the IP alone. And people might be forgetting, $100M pricetag is big sure, but it's not like they have to make it back on launch day with box sales.
fakeassname said on 5:49PM 11-07-2010
SWG was changed to the NGE because all it had playing it was the die hard fans, and that wasn't enough when SE/Lucas Arts wanted number that reflected movie attendance.
TOR is looking more and more like a game built to the NGE specifications from day one, instead of converted into them post launch.
*blink*blink* WTF!?!?!?!
that -is- what's happening ... how come no one brought this up before?
TOR IS NOTHING BUT THE NGE REPACKAGED! action over simulation, theme park over sandbox, and narration over player interaction.
NONE OF YOU STAR WARS FAN BOYZ LIKE THE NGE, WHAT MAKES IT YOUR HOLY GRAIL NOW THAT IT'S BEING REPACKAGED AS TOR?
Derek K. said on 7:44PM 11-07-2010
I'm a huge SWG fanboi.
I'm also willing to say that the NGE isn't a bad game. It just isn't SWG. If it had been released as a stand alone game, I'd have been happy to have it. And I've subbed to it for a fair number of months post NGE already.
The problem is that we went from SWG to NGE - a complete change of style with no warning and no input.
fakeassname said on 8:16PM 11-07-2010
fair enough, but I still think this needs to be addressed.
Haakon said on 1:24PM 11-07-2010
icwutudidthar!
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Arcusprime said on 1:32PM 11-07-2010
It's an attention grabbing stunt. Taking a cheap shot at a hugely popular IP is free advertising. A lot more people now know about the BSG MMO than before.
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MMOenthusiast said on 1:47PM 11-07-2010
This is what sticks out in my mind. It's always cool to take a shot at a big name and get free advertising in return.