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EA spent ‘only’ $200M to make Star Wars: The Old Republic?

A debate is breaking out about exactly how much it cost to build Star Wars: The Old Republic, which is easily the most ambitious video game project in recent years.

Three days after analyst Doug Creutz of Cowen & Co speculated that the “total all-in investment” in Star Wars: The Old Republic “is probably approaching half a billion dollars”, a story in the LA Times blog Hero Complex put a sticker price of “nearly $200 million” to Electronic Arts’ massively multiplayer online game. However, that number refers to the development cost and doesn’t factor in marketing expenses or royalty payments to Star Wars license holder LucasArts.

Considering that the game took about six years to create with “800 people on four continents” working on it, a $200 million budget seems quite modest. If the numbers are divided, it breaks down to about $41,600 annually per developer (however, game team size numbers fluctuate during development and The Old Republic’s staff head count must have been lighter during the first years). An additional 1,000 voice actors were hired to record the voice-overs for over 200,000 dialog lines in three different languages.

The ongoing debate over the development cost seems moot because it still keeps climbing. EA has pointed out that the team is staying together to continue working on the game and just released the first major content patch titled “Rise of the Rakghouls”.

Emphasizing that subscribers will get their money worth’s of new stuff is most crucial. The Old Republic customers have to pay a monthly $15 subscription fee in order to keep playing the game after the initial month. For example, one million paying subscribers could bring in up to $180M in annual revenue.

As Star Wars: The Old Republic launched just one month ago, it has yet to be seen how many of its buyers will stick around. This doesn’t prevent analysts from making speculative guesstimates. Todd Mitchell of Brean Murray Carret & Co based his “creeping concerns” about the game’s performance on “casual observation of early play.” But Evan Wilson of Pacific Crest noted today that he raised his sales estimates to 2.2 million units for the quarter, expecting 800,000 subscribers when EA’s fiscal year ends in late March.

Michael Pachter, analyst at Wedbush Securities, said in a research note that Star Wars was tracking in-line with expectations of third fiscal quarter sales of 2 million units. He said Star Wars server data tracked by others can be somewhat misleading. “We strongly disagree with competitors that have suggested Star Wars sell-in and user data are tracking below expectations.”

EA is expected to mention some results on the initial sales on its analyst call on Feb. 1. Until then, EA has to sit on the sidelines and observe regulatory rules about its “quiet period.”


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