Star Wars: The Old Republic costing EA upwards of 80 million USD
Everyone's favourite Wedbush Morgan analyst Michael Pachter has suggested that EA has pumped a phenomenal amount of money into Star Wars: The Old Republic.
Pachter has suggested that EA may have invested nearly 100 million USD in Bioware's epic and long awaited Star Wars MMO.
"Given that the game was in development for over four years, with an estimated 200 full-time developers working on it, we estimate that EAs investment exceeds $80m. Fortunately for investors, the company expenses R&D spending, meaning that its revenues on sales of the Star Wars MMO will be pure profit. We estimate that EA will cover its direct operating costs and break even at 500,000 subscribers (this is exceedingly conservative, and the actual figure is probably closer to 350,000), meaning that with 1.5m paying subscribers, EA will have 1m profitable subs."
He added: "We estimate that the incremental operating cost for each subscriber above break even is around $5 per month (also quite conservative), so if the revenue split is 33 per cent to LucasArts, EA will be left with $5 per subscriber per month in operating profit. At 1million profitable subscribers over the last six months of its fiscal year, EA should generate $30m in operating profit from subscribers."
EA Games boss Frank Gibeau has suggested that Star Wars: The Old Republic will ship no later than January of 2012.
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