Star Wars: The Old Republic Has Cost EA Over $80 Million, May Slip to 2012
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"The contribution from the Star Wars MMO is significant. Under the terms of its deal with LucasArts, EA is required to pay a royalty, but was required to front all of the development, marketing and distribution costs, as well as the costs of building out servers for the game. We estimate that LucasArts' share is 33% of revenues, AFTER EA recoups its investment in game development. Given that the game was in development for over four years, with an estimated 200 full-time developers working on it, we estimate that EA's investment exceeds $80 million," he said.
"Fortunately for investors, the company expenses R&D spending, meaning that its revenues on sales of the Star Wars MMO DVD will be pure profit. EA will be required to spend marketing dollars on the game, and we estimate total manufacturing, marketing and distribution spending will total around $20 million, meaning that at two million units sold, EA will generate $60 million of operating profit on the DVD sales."
And, in what will likely cost the company even more money, EG brings word that the MMORPG might slip to January 2012, though they haven't committed to any sort of launch date yet:
At an investor event yesterday EA said that it expected the BioWare-developed MMO to go live in 2011 but conceded an "outside possibility of a January launch."
Games chief Frank Gibeau went on to explain EA's reluctance to pin down a firm release date for the title.
"Everyone is waiting for us to announce the ship date. Sorry, but that's not going to happen today," he explained.
