Forbes thinks TOR is a financial disaster for EA. Your thoughts

[Saltydogg]

I would suggest...You play games less and seek out a nice Community College and take a business course or two.

A reduction in the size of your work force, Does not portend a sign of doom.

 

Wow, you really dont understand how a company works. When a company starts to take a loss it first cuts costs by eliminating departments that are not needed to sustain such product. Now seeing that the product still does have positive sales growth more departments are cut. Now the company goes into reformation to save what they can. They make more cuts and have mass layoffs, they then discount the product to keep the remaning people interested. The company now is floundering wondering what to do, eliminate the project as a whole and make a new product with the hopes of keeping things going or keep the project running having a skeleton crew running things and keeping just enough people interested in paying for the product to keep the lights on.

 

This is pretty simple when it comes down to it. Bioware doesnt have anyother projects in the works. Everyone out there in Austin will be looking for new work. ToR will go F2P or down to 4 servers like Warhammer did. The EA chairs will still make money off the game but everyone else is in soup lines.

 

I guess you have never seen a company fail before? Hey how about you pick up a paper and look how well the US government is doing

[Andryah]

The difference between your estimates of 90million is that estimate came out in 2011 before the game was released the 200 million came after the fact in 2012

 

My estimate is based on my calculation, which I explained. It is not based on the earlier quoted $80M estimate, so please don't confuse things further. And honestly, I have repeatedly discredited the $200M as based on flawed assumptions.

 

Now, for a moment, lets assume the May 2011 estimate a pundit of $80M was accurate. Then they had 4-6 months of additional work on the tail end of the project on top of that. If they were infact $80M as of May 2011, then following normal project staffing lifecycles for a project surging to completion, they would run up another $20M give or take to reach December release. That puts them at $100M using that line of rationale. Which materially supports my estimate of $90M (which is an estimate and could be off as much as 20% since I don't have the actual project plan in my posession).

Edited July 31, 2012 by Andryah

[Ensquire]

Electronic Arts shares are trading lower this morning following some cautionary comments from Cowen analyst Doug Creutz, who noted that the company is seeing disappointing sales for the game Medal of Honor: Warfighter

 

Once again....Fail. Not Forbes. I would suggest the McGuffey Readers...would help you reading comprehension.

 

Its an article on forbes, they've published it, you should write them and tell them to be more responsible as per what they publish

Edited July 31, 2012 by Ensquire

[Saltydogg]

Here's my question, where did you get the information of 1.2 million subscription loss? Last I heard i was only 400K, still a sizable number but 1.2 million? That's new to me

 

So do you think that 12 NA 12 Euro and 3 Pacific servers acutally have 900K active subs?

[Taorus]

Wow, you really dont understand how a company works. When a company starts to take a loss it first cuts costs by eliminating departments that are not needed to sustain such product. Now seeing that the product still does have positive sales growth more departments are cut. Now the company goes into reformation to save what they can. They make more cuts and have mass layoffs, they then discount the product to keep the remaning people interested. The company now is floundering wondering what to do, eliminate the project as a whole and make a new product with the hopes of keeping things going or keep the project running having a skeleton crew running things and keeping just enough people interested in paying for the product to keep the lights on.

 

This is pretty simple when it comes down to it. Bioware doesnt have anyother projects in the works. Everyone out there in Austin will be looking for new work. ToR will go F2P or down to 4 servers like Warhammer did. The EA chairs will still make money off the game but everyone else is in soup lines.

 

I guess you have never seen a company fail before? Hey how about you pick up a paper and look how well the US government is doing

 

http://ultimaforever.com/ So much for not having anything else to work on.

[Ensquire]

My estimate is based on my calculation, which I explained. It is not based on the earlier quoted $80M estimate, so please don't confuse things further. And honestly, I have repeatedly discredited the $200M as based on flawed assumptions.

 

Now, for a moment, lets assume the May 2011 estimate a pundit of $80M was accurate. Then they had 4-6 months of additional work on the tail end of the project on top of that. If they were infact $80M as of May 2011, then following normal project staffing lifecycles for a project surging to completion, they would run up another $20M give or take to reach December release. That puts them at $100M using that line of rationale. Which materially supports my estimate of $90M (which is an estimate and could be off as much as 20% since I don't have the actual project plan in my posession).

 

I haven't seen your data so, I can only take your word that's correct, I;ve seen plenty of data that supports 200 million

[Ensquire]

http://ultimaforever.com/ So much for not having anything else to work on.

 

just so were on the same page the same article is quoted

The analyst also writes that he is reducing his FY 2013 subscriber forecast for the game Star Wars: The Old Republic to 500,000 from 1 million, “due to continued poor server density trends.”

[Taorus]

Its an article on forbes, they've published it, you should write them and tell them to be more responsible as per what they publish

 

Eric Savitz wrote an article for Forbes, quoting information from Doug Creutz. Big difference to the leap you wanna make that Forbes is saying SWTOR lost subs.

Edited July 31, 2012 by Taorus

[Andryah]

I guess you have never seen a company fail before? Hey how about you pick up a paper and look how well the US government is doing

 

Hyperbolic nonsequitur Saltydogg.

 

EA/Bioware success or failure is unrelated to any other companies success or failure. Your declaration that they will fail is based on no objective evidence.

 

Layoffs =/= failure. It indicate they are adjusting their operations cost to match their business.

 

Declining subs =/= failure. It indicates a lower level of business and revenue from their operations.

 

You really should wait to declare failure until they actually fail... which for an MMO would be when they shut it down. We are nowhere near that yet. You know this, you are just hating on the game.

Edited July 31, 2012 by Andryah

[Comstrike]

I think most people lump all people working on a project, into the total development costs. Nit picking over GAAP issues isn't going to change the fact that the game cost a heck of a lot of money, and by all accounts, had a staff, full time or contractor, that was huge. Much of that cost likely has been repaid in terms of retail sales and what subscriptions they've gotten.

 

The numbers they'll report Tuesday, will be describe in general terms. They can still claim active subscribers if they haven't expired yet, and a lot of six month subs are still technically active. The banter about players being down to the 350,000 range might be accurate, at least in terms of active players. That won't be the same as active subscriptions.

 

• If I'm an analyst, and even bother asking about SWTOR, which isn't even listed among the major 6 releases of EA, in their earnings call press release, I would ask several things:
  
• Does EA have any specific contractual obligations to LucasArts to run the game for a given period of time.
  
• Does LucasArts have any rights to "take over" or allow EA to sell-off the game, if mutually agreed.
  
• What are the "out clauses" if any, EA has to sunset SWTOR?
  
• Does EA plan on rolling a "Freemium" model to SWTOR in Fiscal Year 2012?
  

[Saltydogg]

http://ultimaforever.com/ So much for not having anything else to work on.

 

Gee I wonder where I heard this one before. You didnt happen to say the same thing in the Warhammer forums? You know when Mythic employees were being let go left and right? I guess their new project worked out for all those people that lost their jobs

[Twickers]

So do you think that 12 NA 12 Euro and 3 Pacific servers acutally have 900K active subs?

 

Salty will you SHUT UP my god all your doing is going to every freaking quote and just being downright negative, yeah, the game has issues I get it, yeah sales are down, yeah people are leaving, a blind man could see it, I know this game isn't perfect and still has serious issues and I get that your dissatisfied with the game but my god going to every freaking post that's even remotely positive and attacking it like a 10 year old who didn't get the toy he wanted for Christmas is just pathetic, note that barely anyone here is acknowledging you probably because you aren't contributing in the freaking least and you're becoming extremely irritating.

 

Seriously knock it off.

[Ensquire]

Eric Savitz wrote and article for Forbes, quoting information from Doug Creutz. Big difference to the leap you wanna make that Forbes is saying SWTOR lost subs.

 

If i take your data and Publish it on my website, I'm saying that data good,

 

Forbes staff wrote an article taking references from someone else, and published it, saying that data good enough to reach out to forbes followers, if forbes didn't think the data was good they wouldn't publish it

Edited July 31, 2012 by Ensquire

[mothear]

just so were on the same page the same article is quoted

The analyst also writes that he is reducing his FY 2013 subscriber forecast for the game Star Wars: The Old Republic to 500,000 from 1 million, “due to continued poor server density trends.”

 

Interesting, so does that mean that he expects 500,000 to be the subs level at the end of the 2013 financial year i.e. by March 2014?

[Saltydogg]

Hyperbolic nonsequitur Saltydogg.

 

EA/Bioware success or failure is unrelated to any other companies success or failure. Your declaration that they will fail is based on no objective evidence.

 

Layoffs =/= failure. It indicate they are adjusting their operations cost to match their business.

 

Declining subs =/= failure. It indicates a lower level of business and revenue from their operations.

 

You really should wait to declare failure until they actually fail... which for an MMO would be when they shut it down. We are nowhere near that yet. You know this, you are just hating on the game.

 

A failure is defined simple as a lack of sucess. In terms of MMOs this is a very large failure. I edit the simple quote of "People will be playing Tor for year to come" its not a exact quote but the idea is there. The development team, bioware and EA had very very high hopes for this game. Those hopes are a measurement of sucesss. In that term they have failed utterly.

 

Think of it in this aspect. EA is a new company. They put out a product that costs millions of dollars. The product fails to produce as inticipated thus costing the company as a whole. 8 months in this new company now has to debate on what to do. Layoffs to keep the product going or move to a new project as a whole and hope that will make up for this failure. Overall if this was a new company and had such a massive failure in 8 months that company would cease to exist.

 

The only reason why EA can get away with TWO major losses in the MMO world is due to their other products keeping the company going. Warhammer and TOR are failures in the sense of profits over time. Look at WoW. Its a crap example but its the only reason why Bilzzard got out of the red. You have STAR WARS. One of the largest fan bases in the world, covering all age groups. The ability to make this game a sucess should of been very easy.

[Andryah]

Seting aside everyones armchair financial analysis of EA/Bioware, and setting aside the negative bias in the forum against the game (seriously, it's an EA earnings call tomorrow, and SWTOR is a small footnote in their business, just like last quarter)...... EA has much larger issues in their earnings call then SWTOR, or even Bioware as a division.

 

They have bet the strategic growth and progress of the company substantially on mobile gaming. With Zynga taking yet another giant dung dump in their earnings this quarter.... this is where EA is going to get analyst scrutiny. I know that does not give the SWTOR haters the stimulant they want and need, but it is a serious strategic risk on EA management part. Mobile gaming appears to have peaked and may in fact be in free fall soon. EA is going to have to dumpa and hustle to replace one of their key strategic growth elements.

 

And if digital merchandizing takes any hits in the industry (not sure that it will in the near term really) then they are truly going to get a deeper reaming then they currently are in the market.

[Taorus]

If i take your data and Publish it on my website, I'm saying that data good,

 

Forbes staff wrote an article taking references from someone else, and published it, saying that data good enough to reach out to forbes followers, if forbes didn't think the data was good they wouldn't publish it

 

Electronic Arts shares are trading lower this morning following some cautionary comments from Cowen analyst Doug Creutz, who noted that the company is seeing disappointing sales for the game Medal of Honor: Warfighter.

 

This data...well Since Mr. Creutz in the article... discredited himself in that statement.

Medal of Honor: Warfighter. doesn't release till 23 October 2012.....I kinda think a game not for sale yet, would be a impediment to sales.

[Ensquire]

Seting aside everyones armchair financial analysis of EA/Bioware, and setting aside the negative bias in the forum against the game (seriously, it's an EA earnings call tomorrow, and SWTOR is a small footnote in their business, just like last quarter)...... EA has much larger issues in their earnings call then SWTOR, or even Bioware as a division.

 

They have bet the strategic growth and progress of the company substantially on mobile gaming. With Zynga taking yet another giant dung dump in their earnings this quarter.... this is where EA is going to get analyst scrutiny. I know that does not give the SWTOR haters the stimulant they want and need, but it is a serious strategic risk on EA management part. Mobile gaming appears to have peaked and may in fact be in free fall soon. EA is going to have to dumpa and hustle to replace one of their key strategic growth elements.

 

And if digital merchandizing takes any hits in the industry (not sure that it will in the near term really) then they are truly going to get a deeper reaming then they currently are in the market.

 

I like how you say small footnote, But the TOR performance has a direct impact on their stock overall, otherwise forbe, marketwatch, ect. wouldn't write about it

Edited July 31, 2012 by Ensquire

[Saltydogg]

Salty will you SHUT UP my god all your doing is going to every freaking quote and just being downright negative, yeah, the game has issues I get it, yeah sales are down, yeah people are leaving, a blind man could see it, I know this game isn't perfect and still has serious issues and I get that your dissatisfied with the game but my god going to every freaking post that's even remotely positive and attacking it like a 10 year old who didn't get the toy he wanted for Christmas is just pathetic, note that barely anyone here is acknowledging you probably because you aren't contributing in the freaking least and you're becoming extremely irritating.

 

Seriously knock it off.

 

I just wanted to know your thinking. 27 servers world wide would indicate a very unhealthy population. People who wanted to save this game are ignored. Seriously though there is nothing positive about this topic and the main reason why is due to the Fanbois. When people are on the test server actually trying to help fix this game report on the forums what needs to be done and get flamed and the devs listen to the flamers what exactally do you think was gonig to happen. Huraay run on

[Saltydogg]

Seting aside everyones armchair financial analysis of EA/Bioware, and setting aside the negative bias in the forum against the game (seriously, it's an EA earnings call tomorrow, and SWTOR is a small footnote in their business, just like last quarter)...... EA has much larger issues in their earnings call then SWTOR, or even Bioware as a division.

 

They have bet the strategic growth and progress of the company substantially on mobile gaming. With Zynga taking yet another giant dung dump in their earnings this quarter.... this is where EA is going to get analyst scrutiny. I know that does not give the SWTOR haters the stimulant they want and need, but it is a serious strategic risk on EA management part. Mobile gaming appears to have peaked and may in fact be in free fall soon. EA is going to have to dumpa and hustle to replace one of their key strategic growth elements.

 

And if digital merchandizing takes any hits in the industry (not sure that it will in the near term really) then they are truly going to get a deeper reaming then they currently are in the market.

 

Here is the think, anyone who invests in their 401k wisely knows the health of each company they are investing in. If they are smart they look at the company and its future development. They understand loss to gain ratios and will move accordingly. This is a prefect example of how economics works. Investors see that another multi million dollar project was mismanaged, the game has failed all expectations and are pulling out. Its pretty easy to understand from a person who invests

[Andryah]

I like how you say small footnote, But the TOR performance has a direct impact on their stock overall, otherwise forbe, marketwatch, ect. wouldn't write about it

 

No Ensquire. It does not. It's not even in their top ten products and is not a signficant line item in their quarterly reporting in terms of revenue or cost. This was all covered last time a quarterly report came out. Some people in the forums here were in anquish that SWTOR was but a footnote then too. SWTOR is not the center of the EA universe, not even close.

 

And I should probably remind you to go back and read the actual Forbes article again. The blogger listed 5 reasons, and not necessarily in order of importance to EA, EA has issues. Honestly, I think he put SWTOR in their just to attract traffic. I'm serious when I say that.

[Andryah]

Here is the think, anyone who invests in their 401k wisely knows the health of each company they are investing in. If they are smart they look at the company and its future development.

 

Actually if they are smart, they DON'T invest in individual stocks with their 401K. 401K are strategic long term investments. They are best invested in Mutual Funds to spread and manage the risk of their investments, and leverage the skils of the fund managers. Most of all, they don't micro-manage their 401K by stock flipping. Individual stock investing with a 401K is a poor decision in almost all cases.

[Ensquire]

No Ensquire. It does not. It's not even in their top ten products and is not a signficant line item in their quarterly reporting in terms of revenue or cost. This was all covered last time a quarterly report came out. Some people in the forums here were in anquish that SWTOR was but a footnote then too. SWTOR is not the center of the EA universe, not even close.

 

And I should probably remind you to go back and read the actual Forbes article again. The blogger listed 5 reasons, and not necessarily in order of importance to EA, EA has issues. Honestly, I think he put SWTOR in their just to attract traffic. I'm serious when I say that.

 

I've heard the CEO say the same thing, you know why he says that it not in there top ten products?

 

BECAUSE ITS NOT PERFORMING and their stock been dropping because of it

 

here's a quote from a really good break down on why EA STOCK is dropping

 

http://www.gamesindustry.biz/articles/2012-06-21-stock-ticker-why-eas-market-valuation-has-crashed/

 

Firstly, there's Star Wars: The Old Republic. EA's stock price went into decline after The Old Republic's launch, and hasn't recovered yet - and that timing is unlikely to be a coincidence. Expectations among investors for SWTOR were extremely high, given the game's much-publicised high development costs (which probably make it the most expensive game project ever), the strength of the Star Wars license, the track record of developer Bioware and, crucially, the tantalising possibility of building an ongoing MMO revenue stream for EA which would match the one enjoyed by rival Activision Blizzard from World of Warcraft. While it would be unfair to characterise SWTOR as a complete failure, it has certainly not been a success on the level which EA or its investors would have wanted. The game has lost 400,000 subscribers since February, and it seems inevitable that the company will be forced into an embarrassing (but probably commercially sensible) transition to a free-to-play model sooner rather than later.

Edited July 31, 2012 by Ensquire

[Taorus]

Actually if they are smart, they DON'T invest in individual stocks with their 401K. 401K are strategic long term investments. They are best invested in Mutual Funds to spread and manage the risk of their investments, and leverage the skils of the fund managers. Most of all, they don't micro-manage their 401K by stock flipping. Individual stock investing with a 401K is a poor decision in almost all cases.

 

Brains and you Game....fine fine qualities

[Blarpped]

Ugh... will you two go have a video conference and discuss finance there or something.