SWTOR – The risky investment by EA

World of Warcraft is, without reason of doubt, one of the best successes on the market that, even though it has aged and should have been dead already (in theory only – because game rarely “live” more that 2 years).

But WoW is still the leader, the moneymaker, the game that drives so many people crazy – destroys marriages, makes people rich and so on. And it keeps going.

A hit MMO like that can be an huge thing for the investors on Wall Street. If a MMORPG has success, it can offer a certain degree of predictable revenue. For example, there’s a certain degree to which World of Warcraft subscription revenues are a sure thing each quarter for Activision Blizzard. Electronic Arts and BioWare are well aware of the stats, and they’re making sure their entrant in the genre is well prepared: EA is spending more money on the development of Star Wars: The Old Republic than any title in its 28-year history. But are EA’s investors also willing to believe in the success of Star Wars: The old republic?

According to an article on Gamasutra, investors are not nessersarely supporting Electronic Arts in its biggest investment ever, Star Wars: The Old Republic. The article released today cites Janco Partners analyst Mike Hickey as saying, “We believe many investors are betting against SWTOR achieving market success, provided the company’s (Warhammer Online from Mythic) and industry’s track record at releasing successful new MMOs.” With the lack of succes with Warhammer Online, it’s not rocket science to understand why some investors are restrained about investments in new MMORPGs. 

The launch of Warhammer online was a huge success with more then 500.000 games sold the first week – which is impressive for any MMORPG – but soon after the subscription base was significantly lower.

If I were an investor, I would pretty well always bet against an MMO being successful. Statistically, I would win in the long run. A lot of gamers forget that investors aim to balance risk against rewards. Most MMO’s are historically, demonstrably, extremely risky. Yet, Bioware is known and loved for it’s past successes, and personaly I believe it is the only company that can compete against blizzard. So this will definitely be the ” make or break” for the MMORPG genre.