jarjarloves Posted July 28, 2012 Posted July 28, 2012 If you put 500 million on a horse... It better win, that's all I'm saying Just so we are clear, any other horse EA invests in is maybe in the 40m-60m range good thing EA didn't invest 500 million, more like less then 200 million. And good thing that they made their money back off the initial box sales as reported from the FIRST investor call.
Ensquire Posted July 28, 2012 Author Posted July 28, 2012 good thing EA didn't invest 500 million, more like less then 200 million. And good thing that they made their money back off the initial box sales as reported from the FIRST investor call. With marketing that numbers been inflated to about 400m-500m http://fronttowardsgamer.com/2011/06/13/star-wars-the-old-republic-reaches-the-500-million-mark-ea-financial-disaster-inevitable/
Valkirus Posted July 28, 2012 Posted July 28, 2012 If swtor were a horse it would be a Arabian horse and not a American Quarter Horse, it would be about endurance and not the short sprint, you want the money to come back at a steady pace and for a long time to maximize your investment, not a sprint horse that charges ahead gets your money back then burns itself out. Just so we are clear, the other horse in eas stable is tsw. TSW? Lol! I guess some will like that game, but I played the beta and thought it sucked. And you look at TOR as a Arabian? I guess we all have different values even when it comes to horses and how they compare to MMO's.
AidanLightwalker Posted July 28, 2012 Posted July 28, 2012 Have they made up there investment? Forbes seems to think the game cost 500 million with marketing The young writer, publishing his opinions does. This artical is nothing but speculation. Any 20 something year old with an opinion on gaming could write the same thing. Again, the writer is drawing connections between what "he" beleives. The true issues is, it's cool to hate on the internet right now and EA seems to be the outlet. Its almost like bullying. Everyone else is ragging on x kid, so why shouldn't everyone else. This is the garbage that we are seeing everywhere online these days. There is just so much filth....
Shingara Posted July 28, 2012 Posted July 28, 2012 (edited) With marketing that numbers been inflated to about 400m-500m http://fronttowardsgamer.com/2011/06/13/star-wars-the-old-republic-reaches-the-500-million-mark-ea-financial-disaster-inevitable/ So from a supposed inside leak that said 300 mil and then that which states "you can bracket a guess in between 300 million and 500 million dollars and probably get a pretty safe estimate on how much has been thrown at this game." Seems that there is so much guessing taken as fact with i was talkin to a mate of a mate who has a brother that knows this guy that told him........... Edited July 28, 2012 by Shingara
SpazCats Posted July 28, 2012 Posted July 28, 2012 so now you agree with me? then why would you quote me and try to say I was wrong? Fact: he does not meet the legal definition of journalist. http://hlpronline.com/2011/02/whos-really-a-journalist/ http://legal-dictionary.thefreedictionary.com/Journalist+Shield+Laws Fact: he does not have a degree in journalism as per his profile which I linked previously Fact: he is not employed by Forbes. He does not work for Forbes. He is not an employee of Forbes. He is not on Forbes staff. Fact: he is a freelance writer about GAMING culture. He is not educated or experienced enough to be making the claims he is. His entire piece is based around GUESTIMATES and "possibly" and "perhaps." He uses these qualifiers over a dozen times because he knows he doesn't have FACTS to back him up. He is a random kid with a gaming background writing a BLOG piece about EA and Star Wars. He is not a financial analyst. He is not an economist. He is not a journalist. He is a BLOGGER writing OPINION pieces about gaming which FORBES has published. You are wrong. Dude, you need to calm down. Paul Tassi is indeed a journalist, by any standard definition of journalist (you do not need to have a degree in journalism to be a journalist BTW). I'm not even going to argue this point it is so obvious. I NEVER made any claims as to whether or not he was a Forbes staff member, but he does most certainly indeed work for them, being that he is writing for them. I have no idea what compensation he is getting, if any. As I noted already, Forbes is a pretty reputable site. If Paul Tassi's writing was not up to a certain professional level, you can be sure he would not be a contributor to Forbes. Any "random kid" does not get to be a contributor to Forbes. Anyway, argue all you want what a journalist is and why he doesn't work for Forbes all you want, I am done here.
Shouku Posted July 28, 2012 Posted July 28, 2012 This article hits the nail right on the head, and reflects and restates how the investors feel. What is surprising is how well the investor feelings coincide with many players, myself included. To sum things up, the game is OK, but just OK. But it could have been REALLY the best. Players such as myself and these investors aren't disappointed with the mild success, we are disappointed and quite a bit pissed of about the wasted potential which it had and the total labor/time/financial investment which should have brought it up to rival and surpass WoW, and again, in this regard, it failed, miserably. Add to that the continuous PR BS from EA and the CEO about not calling the server merges server merges etc. and ignoring the existing core in-game issues (not talking about fluff), + layoffs which will make these issues linger even longer, and it becomes a bleak picture for the future
RangKer Posted July 28, 2012 Posted July 28, 2012 (edited) Just read a Forbes article that was orginially an opinionated internet blog once about a MMO on an MMO Forum where they allow people without Subs to post, now I can become a financial analyst, or CFO or maybe become CEO or possibly even the President's Politcal Economic Advisor. Edited July 29, 2012 by RangKer
jarjarloves Posted July 29, 2012 Posted July 29, 2012 (edited) With marketing that numbers been inflated to about 400m-500m http://fronttowardsgamer.com/2011/06/13/star-wars-the-old-republic-reaches-the-500-million-mark-ea-financial-disaster-inevitable/ yeah.... no a unknown blog that uses EA Louse (which was discredited and turned out to have never worked for bioware) as a creditable source, an LA Times article which also "inflated" it's number (they considered projects bioware outsourced such as the intro movies to Blur studios as part of bioware so all of the employees at Blur where calculated as paid employees of Bioware) and Gary Whitta who HAS NEVER WORKED FOR BIOWARE OR EA as another creditable source IS NOT A VALID SOURCE OF INFORMATION. Gary Whitta (the guy who said 500 million) is a writter primarely a screen writter who likes video games. He has worked as a consultent on Gears of War, DUKE NUKE EM FOREVER and Prey. He never wrote any of those games he just worked as a story consultent. That's it. The blog post you linked has no basis in reality. Do you really think they spent 300 million on marketing??? Blizzard doesn't even spend that much for WoW. Why would they spend more then the cost of the game on marketing?? What sense does that make? Edited July 29, 2012 by jarjarloves
Sundragon Posted July 29, 2012 Posted July 29, 2012 As a financial analyst, even though I don't have the official $ figures that EA spent on SWTOR, you have to do a few things to see if it is a "success" or a "failure". First, what is the acceptable rate of return on the investment with this kind of risk? Given the vast # of failures in MMO land, I'd guess it is probably 12-15%. Second, how long of a time horizon? Say 10 years is the longest most MMOs live. Third, how much did they spend and how long? Say they spent 4 years making this thing at a cost of $400 million ($100 million less than the article suggests to be optimistic). So, you'd have it look like this to get 15% return: Year -4: -$75m Year -3: -$75m Year -2: -$100m Year -1: -$150m (total cost $400m) Year 1 box sales: $120m less cost of boxes of $10m = $110m Year 1 subs (~ 1 million subs): $180m less cost of -$30m (staff) = $150m (for a total of $260m net in year 1) Year 2 subs: $120m less $10m (staff reduction after all)= $110m Year 3 subs (net): $80m Year 4: $70m Year 5: $60m Year 6: $45m Year 7: $35m Year 8: $25m Year 9: $15m Year 10: $5m If you use a 15% discount rate, this is breakeven investment for the company (the net present value is roughly $0). If this game cost $500m instead of $400m, then it's a loser. If the subs $'s drop faster, it's a loser. If the costs are higher than $10m a year to maintain the game, it's a loser. To spend $500m on a game, they had to expect over 1 million subs for quite a while, and potentially have increasing subs like in WoW (which, after all, was the basis for EA doing the project). However, the costs of making the game are already done...so the next question is "is it profitable going forward from this point?" The answer is clearly yes, so there is no point in shutting down the game or anything. But if you worry that this kind of spending for a game that turns out to be a financial loser will lead management to make another bad decision, then the stock will continue to suffer. Hence I wouldn't be surprised to see more managerial turnover within EA. Figured as a financial analyst, I would share with you how they define the game as a failure or a success. If they spent $500m, this game is a financial disaster even though it remains profitable.
jarjarloves Posted July 29, 2012 Posted July 29, 2012 As a financial analyst, even though I don't have the official $ figures that EA spent on SWTOR, you have to do a few things to see if it is a "success" or a "failure". First, what is the acceptable rate of return on the investment with this kind of risk? Given the vast # of failures in MMO land, I'd guess it is probably 12-15%. Second, how long of a time horizon? Say 10 years is the longest most MMOs live. Third, how much did they spend and how long? Say they spent 4 years making this thing at a cost of $400 million ($100 million less than the article suggests to be optimistic). So, you'd have it look like this to get 15% return: Year -4: -$75m Year -3: -$75m Year -2: -$100m Year -1: -$150m (total cost $400m) Year 1 box sales: $120m less cost of boxes of $10m = $110m Year 1 subs (~ 1 million subs): $180m less cost of -$30m (staff) = $150m (for a total of $260m net in year 1) Year 2 subs: $120m less $10m (staff reduction after all)= $110m Year 3 subs (net): $80m Year 4: $70m Year 5: $60m Year 6: $45m Year 7: $35m Year 8: $25m Year 9: $15m Year 10: $5m If you use a 15% discount rate, this is breakeven investment for the company (the net present value is roughly $0). If this game cost $500m instead of $400m, then it's a loser. If the subs $'s drop faster, it's a loser. If the costs are higher than $10m a year to maintain the game, it's a loser. To spend $500m on a game, they had to expect over 1 million subs for quite a while, and potentially have increasing subs like in WoW (which, after all, was the basis for EA doing the project). However, the costs of making the game are already done...so the next question is "is it profitable going forward from this point?" The answer is clearly yes, so there is no point in shutting down the game or anything. But if you worry that this kind of spending for a game that turns out to be a financial loser will lead management to make another bad decision, then the stock will continue to suffer. Hence I wouldn't be surprised to see more managerial turnover within EA. Figured as a financial analyst, I would share with you how they define the game as a failure or a success. If they spent $500m, this game is a financial disaster even though it remains profitable. real quick 1. it didn't cost $500 million 2. we know it made it's budget back from the box sales (they annoucned this in the first earnings call)
Ensquire Posted July 29, 2012 Author Posted July 29, 2012 (edited) As a financial analyst, even though I don't have the official $ figures that EA spent on SWTOR, you have to do a few things to see if it is a "success" or a "failure". First, what is the acceptable rate of return on the investment with this kind of risk? Given the vast # of failures in MMO land, I'd guess it is probably 12-15%. Second, how long of a time horizon? Say 10 years is the longest most MMOs live. Third, how much did they spend and how long? Say they spent 4 years making this thing at a cost of $400 million ($100 million less than the article suggests to be optimistic). So, you'd have it look like this to get 15% return: Year -4: -$75m Year -3: -$75m Year -2: -$100m Year -1: -$150m (total cost $400m) Year 1 box sales: $120m less cost of boxes of $10m = $110m Year 1 subs (~ 1 million subs): $180m less cost of -$30m (staff) = $150m (for a total of $260m net in year 1) Year 2 subs: $120m less $10m (staff reduction after all)= $110m Year 3 subs (net): $80m Year 4: $70m Year 5: $60m Year 6: $45m Year 7: $35m Year 8: $25m Year 9: $15m Year 10: $5m If you use a 15% discount rate, this is breakeven investment for the company (the net present value is roughly $0). If this game cost $500m instead of $400m, then it's a loser. If the subs $'s drop faster, it's a loser. If the costs are higher than $10m a year to maintain the game, it's a loser. To spend $500m on a game, they had to expect over 1 million subs for quite a while, and potentially have increasing subs like in WoW (which, after all, was the basis for EA doing the project). However, the costs of making the game are already done...so the next question is "is it profitable going forward from this point?" The answer is clearly yes, so there is no point in shutting down the game or anything. But if you worry that this kind of spending for a game that turns out to be a financial loser will lead management to make another bad decision, then the stock will continue to suffer. Hence I wouldn't be surprised to see more managerial turnover within EA. Figured as a financial analyst, I would share with you how they define the game as a failure or a success. If they spent $500m, this game is a financial disaster even though it remains profitable. Don't forget Lucas Art licensing fees as overhead is probably around the range of 15-30% of all revenue generated Edited July 29, 2012 by Ensquire
Ensquire Posted July 29, 2012 Author Posted July 29, 2012 real quick 1. it didn't cost $500 million 2. we know it made it's budget back from the box sales (they annoucned this in the first earnings call) with global marketing, ya its going to be in the range of 400-500m
jarjarloves Posted July 29, 2012 Posted July 29, 2012 (edited) with global marketing, ya its going to be in the range of 400-500m again NO ITS NOT In no way are they spending over 300 million dollars on marketing. Not even movies spend that much. AVATAR didn't even spend that much on marketing and that was everywhere. not to mention the game isn't global. It's US, Europe, Austrilia, and Japan (english only in Japan) Possibly Korea but again only in English. Edited July 29, 2012 by jarjarloves
undeniablyjeff Posted July 29, 2012 Posted July 29, 2012 (edited) The best part of the Forbes article is that EA and BioWare have a rocky relationship now. If that's true and they do split, consider it a good thing. Edited July 29, 2012 by undeniablyjeff
Elear Posted July 29, 2012 Posted July 29, 2012 Oh my, someone somewhere said your game is disaster. Quickly stop paying and playing bfore Evil Evil (Evil) EA earns one more cent from you.
Synxos Posted July 29, 2012 Posted July 29, 2012 Oh my, someone somewhere said your game is disaster. Quickly stop paying and playing bfore Evil Evil (Evil) EA earns one more cent from you. They're saying it because many many people have already quit.
Synxos Posted July 29, 2012 Posted July 29, 2012 real quick 1. it didn't cost $500 million 2. we know it made it's budget back from the box sales (they annoucned this in the first earnings call) including advertising costs, it very well could have....
metalgearyoda Posted July 29, 2012 Posted July 29, 2012 including advertising costs, it very well could have.... Could aliens have built the great pyramids? They very well could have.
Synxos Posted July 29, 2012 Posted July 29, 2012 Could aliens have built the great pyramids? They very well could have. way to resort to such an asinine comment when you had no real defense.
Gruug Posted July 29, 2012 Posted July 29, 2012 WoW didn't lose their subs in their first year therefore you first statement is debunked. I a not talking about anything else in your post because they do not pertain to my argument. I don't necessarily disagree with what you're saying. However, my argument still stands... No MMO that lose their peak has ever regain their subs or even came close to it. Edit: You did comment that SWTOR was a good MMO but you also commented that if BW made changes then the game can grow again. But if you look at MMO history, MMOs don't tend to regain their subs once the exodus begins. Technically, WoW did lose subs that first year. However, WoW did some things right in marketing which allowed them to add subs at least as fast as they lost them or faster. In fact, if WoW had launched today in the condition it was in when they first launched w/o the marketing, they would have probably have been in the same boat as SWTOR is today....which really (expectations to the contrary) isn't terrible. Note to your edit: I never said they could grow again. What I said was that they can "correct their mistakes" from launch. Somewhat different then your spin.
metalgearyoda Posted July 29, 2012 Posted July 29, 2012 way to resort to such an asinine comment when you had no real defense. Look. You can't disprove aliens so... They are probably there.
kurzis Posted July 29, 2012 Posted July 29, 2012 I've unsubscribed, just waiting for my play to tick away but it wasnt the game that made me unsub, personally i think its not too bad, and costs me less money than toilet paper per month the problem i have are the moderators. they seem to be a bunch of hormonal teenagers that pick and choose which forum guidelines to follow, and if your post doesn't breach the guidelines but a mod doesn't like it they'll delete it anyway under the label "spam" also the email address they give to dispute any of the moderators actions is a dud, it never gets replied to. Its a shame that the leadership of the game and the community face of bioware/EA act like a bunch of opinionated little 12 year olds rather than professionals
jarjarloves Posted July 29, 2012 Posted July 29, 2012 including advertising costs, it very well could have.... no it could not have been. Not even movies spend that much in advertising. Use some common sense. That would mean they spent far more on advertising then they did on the game.
Shingara Posted July 29, 2012 Posted July 29, 2012 (edited) With marketing that numbers been inflated to about 400m-500m http://fronttowardsgamer.com/2011/06/13/star-wars-the-old-republic-reaches-the-500-million-mark-ea-financial-disaster-inevitable/ 200 mil on advertising, *** are you smoking. The main adverts were with the sw film which lucas did and as lucas will be promoting his own ip you can bet that was part of the licensing and if if it wasnt your looking at no where near a million and even if it was a million exactly for the lucas advertising where is the other 199 million been spent exactly. All advertising and the 5 year license will be included in the budgeted amount for development and release costs. Edited July 29, 2012 by Shingara
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