Electronic Arts Q2 FY2013 Earnings Call and Star Wars: The Old Republic
30 October 2012
When the MMORPG Star Wars: The Old Republic game went retail in December 2011, it pulled in "over one million subscribers" in the first week. By February 2012, "over 1.7 million players" had subscribed.
- "Although it launched well, subscriptions have been on a declining trajectory and have now slipped below on million. Last year we announced that the breakeven point was roughly 500,000 subscribers. And while we are well above that today, that's not good enough"
Electronic Arts held their Q2 FY2013 today, and the Star Wars: The Old Republic subscriber numbers are missing. Here is what Electronic Arts said about SW:TOR:
- "Subscriptions, advertising, and other digital revenue grew 48%, driven by Star Wars: The Old Republic. As we mentioned on the last call, a free-to-play option for this game will be available this quarter, and we will provide more insight regarding the results of this change in future calls."
- "Non-GAAP revenue for the quarter is expected to be between $1.25 and $1.35 billion, a decline in comparison from last year's $1.65 billion, which included the launches of Battlefield 3 and Star Wars: The Old Republic. Both titles drove packaged goods and full-game digital download revenue."
What does this all mean?
From our point of view it means, see what is said about SW:TOR at its one year anniversary in December 2012. And what Electronic Arts reports in its Q3 FY2013 earnings call.
Addendum 31 October 2012
Here are additional comments on Star Wars: The Old Republic from the Seeking Alpha transcript of the earnings call:
Sean P. McGowan - Needham & Company, LLC, Research Division
- "I was hoping you could give us a little update on where things stand with Star Wars: The Old Republic, the changes that you've made to the business model and how that's working, or anything you can give us on that. And then remind us on the Battlefield Premium. You've given us some great color on the revenue that's coming. What costs might have been deferred on that or might show up in Q4 against that revenue?"
Frank D. Gibeau - President of The EA Labels
- "Yes, this is Frank, I'll start with the Star Wars question. As we announced in our last call, we are pivoting that business to open up a new free-to-play part of that business model. That starts this November. And so I think it's a little premature to be able to give you too much color on how that's going to go until we deploy it. In Blake's remarks, he mentioned that we'll have an update on a future call and give you guys some more information on how the free-to-play conversion went on Star Wars. So…"
Sean P. McGowan
- "How's the existing business going?"
Frank D. Gibeau
- "It's vibrant and positive in Star Wars. The game is continuing to release content. People continue to be subscribing to the product. So for that part of the business, the premium subscription side of the business is very stable, and we're excited about the potential and the free-to-play option."
Sean P. McGowan
- "Okay. And the people hanging out, those that already signed up or are kind of staying?"
Frank D. Gibeau
- "Like I said, we feel good about stability in the community and people are excited about the new content, actually, we've been releasing. So yes."
Atul Bagga - Lazard Capital Markets LLC, Research Division
- ... "You talked about what's going down, but what's going up there?"
John S. Riccitiello - Chief Executive Officer and Executive Director
- ... "We feel good about our numbers. But you're right, we've had -- I mean, the principal downside this year were Medal of Honor, NBA and frankly earlier, Star Wars has underperformed. But that's really the balanced equation."
"Excellent idea. Just let me update my will."
Smuggler, Star Wars: The Old Republic