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Star Wars MMO 'won't be profitable. Ever'

Thu 04 Nov 2010 9:27pm GMT / 5:27pm EDT / 2:27pm PDT
BusinessOnline

Bigpoint CEO predicts harsh reality for EA and BioWare's big online hope

Heiko Hubertz, CEO of browser games publisher Bigpoint, has said that he believes BioWare and EA's Star Wars MMO, The Old Republic, will not be profitable.

The main issue is the subscription business model, which Hubertz suggests doesn't make financial sense and will not be able to generate enough revenues for a title with such high development costs - estimated in the region of $100 million.

"If you look in the traditional industry there are still a lot of big bets there," said Hubertz, keynoting the London Games Conference this evening. "Still there are companies investing $20-40 million for a game. These companies have to be profitable after one or two months. They don't have 12 months or even more. I think these companies are really in trouble in the future if a user can play online games for free.

"If you look at a game like Star Wars from EA and BioWare, they estimated a development budget of more than $100 million. This is an online game for many million of subscribers, so a big publisher does not understand that a subscription model is not the future.

"With micro-transactions and longer lifetime maybe I see a chance for this game but I don't think that EA or BioWare will be profitable with this game. Ever."

A number of high-profile subscription MMO's have changed business models this year, favouring a free-to-play model after declining user numbers, including Turbine's Lord of the Rings Online and Atari's Champions Online.

Hubertz, who's own company is developing free-to-play MMO's using licenses such as Battlestar Galactica and The Mummy, insisted that developing games for a single format or device is a mistake, and the future of the games business is in content created for cross-platform and multiple devices.

An interview with Heiko Hubertz will be available on GamesIndustry.biz next week.

24 Comments

Aleksi Ranta
Product Manager - Hardware

268 124 0.5
Coming from a guy who is developing free-to-play MMO´s, you would kind of expect him to say this?
And not: "yes we are developing free-to-play games but i think a subscription model is the way to go".

Posted:3 years ago

#1

Laurent Hogue
Team Lead LD

1 0 0.0
This is probably the main problem of Gamesindustry.biz - they often do articles reporting the comments of someone who have interests in the subject...

"Hubertz [...] insisted that developing games for a single format or device is a mistake, and the future of the games business is in content created for cross-platform and multiple devices."

He got a point for cross-platforming (while I doubt that it is "the future" - just another business model) but single-platform games can be really profitable - think about DS, iphone games and even some PC games.

Posted:3 years ago

#2

Lucas Seuren
Copy Editor

26 2 0.1
But is that a bad thing? As far as 300 years ago (as far back as my knowledge of cultural history goes) people wrote simple plays that would make money so they could finance plays that were not as profitably but had a much higher cultural value. If BioWare can push the boundaries of digital entertainment with a game like this, does it really matter that they lose money with it? As long as they can earn it with other projects like Dragon Age and Mass Effect, I think it'll be good for the industry.

Of course, that is if the guy is right and even then I'd rather see BioWare making a profit if they do push the boundaries of digital entertainment.

Posted:3 years ago

#3

Wayne Gibson
UK Marketing Manager for GameKrib.com

69 8 0.1
Hopefully EA would have learned some harsh lessons from their cock ups with WAR and the growing pains they provided. If these same mistakes are repeated then what Heiko Hubertz says is very much true, in the sense it will fail on its current business model. With regards to the articles final paragraph this may be very possible for MMO's with the next generation of consoles. However currently since both MS and Sony are trying to squeeze another 5 yrs or so of shelf life from the current ones, developing an mmo for the pc exclusively would make sense (for now).

That being being said putting all your eggs in one basket and having them crack doesnt leave you with much to make an omelette. However with current subscription models on the consoles (with reference to MS and its gold subsciption anyway) being what they are it would require a lot of hammering out to make an mmo cross platform. Considering how many gamers are also SW fans (myself included), if Bioware can deliver a quality product then I dont see EA's current business model outright failing. Essentially it comes down to the quality of the product rather then the business model exclusively.

Edited 1 times. Last edit by Wayne Gibson on 4th November 2010 10:09pm

Posted:3 years ago

#4

David Saunders
Designer

1 0 0.0
FWIW, Bioware/EA haven't yet announced what sort of model the game will be sold under.

Posted:3 years ago

#5

Eddie In
Project Manager

15 0 0.0
From my experience in EA, the group has a hard time sharing its competencies across the entire EA group. While EA in the West has some experiments with free2play going with Playfish and such, the best case the company has in launching/servicing a major free2play MMO operation is by EA Asia with Fifa Online 2 and Battlefield Online. Fifa has been out for a few years and these two titles are huge successes in Korea and China with millions of users but these models aren't being rolled out anywhere else.

The company culture was quite "in-the-box" when it came to releasing big budget titles. WAR was a great example. I'm sure their product teams estimated sales through pre-orders, launch and Christmas season arrived at some obscene figure for concurrent users and opened like 40 servers off the bat. The game was designed for a lot of interactive play and it pretty much DIED when the server pops never reached critical mass.

Maybe the company learned a thing or two after WAR but I doubt the big brass will be content with the concept of paying a truckload of cash in marketing and servers, making nothing at launch and then having to wait a month or two before users reach the "buy" decision in a free2play model. This kind of thing is NORMAL for free2play publishers especially in Asia but a massive risk in the eyes of an industry/investment community who is still "in-the-box."

I expect high-priced pre-orders, users having to buy an additional month minimum along with their box to play, and a slightly higher subscription fee because EA will probably bet their users will think Star Wars is worth it.

Edited 2 times. Last edit by Eddie In on 5th November 2010 12:55am

Posted:3 years ago

#6

James Anderson
Studying Game Art & Design

4 0 0.0
It strikes me that browser-based gaming platforms, such as Onlive, could be cross-platform if the browsers in the consoles could handle it. I remember watching an interview with David Perry during a gaming conference that he was putting his bets behind browser-based gaming. There are already mice and keyboards for consoles, so why not? I'm sure there are plenty of issues to resolve, but it is something I'll be keeping an eye on at when I finally enter the industry.

Posted:3 years ago

#7

Jamie Watson
Studying Bachelor of Games & Interactive Entertainment

179 0 0.0
i hope this succeeds..it has some great potential...

Posted:3 years ago

#8

Phil Elliott
Project Leader, Collective; Head of Community (Live Team)

162 29 0.2
"This is probably the main problem of Gamesindustry.biz - they often do articles reporting the comments of someone who have interests in the subject..."

Interesting feedback - we do try and represent the views of a wide cross-section of the games business on a variety of subjects (although sometimes people prefer not to give their opinion on the record!).

In this case I think we've made Heiko's interests clear, so (as always) it's for our readers - who I believe are among the most educated - to draw their own conclusions.

Posted:3 years ago

#9

Aleksi Ranta
Product Manager - Hardware

268 124 0.5
Of course it will succeed, even Star Wars Galaxies is still around. Star Wars is Star Wars, and especially in this case the brand will heavily outweight any pricing-model decisions that EA/BW makes, be it microstransactions and/or monthly fees.

Posted:3 years ago

#10

Terence Gage
Freelance writer

1,288 120 0.1
(MMOs doesn't have an apostrophe in it).

I think there is an element of guaranteed income given this is perhaps the biggest licence in the world and one of the biggest publishers and most respected developers. However, I agree with Eddie's comment above - I think EA should be prepared to play the long game with this title, and realise that it's not going to steal WoW's audience overnight. Varying gradients of subscription should probably feature so it doesn't alienate any potential audience - i.e. an all-singing all-dancing subscription model, as well as a F2P option for people to dip in and out of. I don't know if this is typical or standard for an MMO, as I don't play them.

Posted:3 years ago

#11

Alfonso Sexto
Lead Tester

765 574 0.8
As long as they don't use the same model the used in Warhammer Online... but I trust bioware here; they must focus in offer something different, not expect that for having the Star Wars license every fan is gonna quit WoW and jump into they game.

Posted:3 years ago

#12

Mark Hill
Studying Computing & Networks

21 0 0.0
Whether a high-budget game will be profitable depends on several factors, but I think the biggest one is that the developers need to be in for the long-haul. High initial subscribers won't finance your $100m game, it's the players who stay for years and fall in love with the game.
There are quite a few long-tail games out there, quietly chugging along profitably (or loudly proclaiming their awesomeness, in EVE's case) that prove that initial subscriber numbers are not the goal to aim for.
I wonder if 1-2 months is where most of the money lands in F2P games? I've certainly had anecdotal experience that F2P games have an explosion of interest, followed by a long period of 'meh'.

Posted:3 years ago

#13

Ian Jarvis
artist

14 2 0.1
I'm sure this game has enough money behind it that they can operate till it does become profitable. Would have been nice to have some mention of Star Wars Galaxies, I've no idea how successful or not that game has been but it would be the obvious game to compare.

Posted:3 years ago

#14
The thing here is whether or not the game has plenty to do. Will it have mini games? Will it have crafting that is easy to get into and fairly enjoyable? Will it have plenty of good leveling environments and storylines on both sides, both dark and good? And will it have good customization methods to allow players to play the way they want to?
These are problems we have all noticed with games like Star Trek Online, which launched with only a playable federation side and the only way to level as Klingon was through PvP. Problems with games like FFXIV with a complex and aparently confusing crafting system and leveling method. And issues with Age of Conan with its reported total lack of end game content and high computer spec requirements.

The industry seems to be learning now however that in order to launch a game it must be 'ready' and also be of good quality at release. If SW:ToR launches with end game content, and plenty of alternate activities, to get into I don't see how it could fail. The only issue I have with it, since it matters to me, is the artistic and graphic quality of what I have seen so far of SW:ToR on Leakerz.com (I apologize if this is not allowed, and I am not affiliated with this site). The environment detail doesn't look as amazing at it could, and the colors and UI at times seem a tad too plain visually. These are perhaps things they could easily change as they do QA passes on the game next year before release.

All in all this game is said to even have a new version of raiding in the end game to keep players playing it. It has plenty to explore and lets you run around in it if you felt the need. It might not be a blockbuster title at release, but do NOT underestimate this game. It has the talent of Bioware behind it, and brings the successful ideas of KOTOR with it. The only question is will over a million people be happy playing a KOTOR Online game?

Posted:3 years ago

#15

Eliot Lloyd
Studying Computer Games Design and Production

23 0 0.0
As much as people go on about free to play being the future, there's only one reason subscriptions are making less money.

The majority of people willing to pay a subscription fee for their game are already playing a game with subscription fees.

Whether it's WoW, Aion, EVE or something else, the market is flooded with good subscription based games. Until someone actually makes a game that's much better than current market leaders, there's a good chance they won't turn as big a profit as they hoped. Leaving three options; make a good MMO with a lot of advertising, make a free to play model MMO (although soon the well will run dry in this market too), or wait several years till the market has either died down.

Or I could be wrong and people actually prefer the poor quality games that make up the majority of the free to play market.
I mean, in my opinion, the only games that couldn't cut the subscription market are the games that were trying to ride off of other games successes without managing to make a decent game.

This is all subjective by the way, feel free to poke holes in my argument.

Posted:3 years ago

#16

Greg Wilcox
Creator, Destroy All Fanboys!

2,130 1,038 0.5
Eliot - free is free, so there are a LOT of not-so-hot ftp MMO's that get new users and decent traffic just because they don't cost a dime to play (initially). Granted, when some of these users see a better MMO that's free to play, they can pick up and move on without committing much if any actual money (unless they get sucked into their game so much that they can't get away from it).

I find it a bit pesky that Hubertz' statements sound too much like some "anaylst" predicting doom for an unreleased product. On the other hand, he's right about the pricing on social games to some extent, but still... it's as if he's trying to get people to buy his product and not another by ragging on them (even though he's correct in some statements - on the humanity!)

Well, honesty IS kinds of refreshing these days, so you go, CEO!

Posted:3 years ago

#17

Matthew Perkins
Games Critic

3 0 0.0
This makes little sense. Just about every subscription based game out there today turns a profit. Failure in the MMO space is usually due to poor business management(APB).

Posted:3 years ago

#18

Dany Boolauck
distributor

5 2 0.4
It is not about a business model. It is not about a high profile Title. The article and all the comments I see have one thing in common: they see a game like a consumer product, they talk about it like consumer product. But that is just one aspect of it and the other aspect (more important) is often neglected or overseen. A really good game is like a good movie or a good song it's an art, not a recipe and its all about what's in the game. If a game is really good you can choose any business model you want even the worst one..it will sell like hell. Not many decision makers seem to have understood that now...it used to be the case in the past though.

Edited 1 times. Last edit by Dany Boolauck on 6th November 2010 1:58am

Posted:3 years ago

#19

Greg Wilcox
Creator, Destroy All Fanboys!

2,130 1,038 0.5
@ Matthew:

Wellll... sometimes, a game is just poorly made and I don't think that has much to do with business management ("YOU there, programmers and artists! MAKE this game stink, and make it stink FASTER! We need to ship last month!").

APB in it's former form wasn't stellar thanks to not much to do other than play cops 'n robbers over and over (which, surprisingly, gets old pretty fast) and Final Fantasy XIV is just annoying to even set up and when you finally do get in.... yikes, it's a sin and a crime in one fell swoop. As a fellow editor said as I watched him struggle through the first few hours "Who play-tested this meat-pile? Some kid with a Chocobo hat?" Ouch.

Amusingly enough, when I first heard about APB, I thought it was an MMO based off the old arcade game mixed in with GTA-style gamplay. The game was a bit ahead of its time and is still pretty surprising in how many secrets and hidden missions there were to find.

Silly me...

Posted:3 years ago

#20

Kim Soares
Lead Designer

13 0 0.0
@Greg:

Wellll..... so you are saying that poor games are result of poor programmers and artists? So either 1) the developers are lazy and don't give a crap about the game they are making or 2) business management has hired incompetent developers (which has evertyhing to do with business managament).

It might also be a case that developers are top notch, but business management cuts budget, publisher decides to rush the project, just to name a fewa examples. It might be that all disciplines from developers to publisher are good, but because of some reason publisher needs to cash in fast and so rushes the project.

Posted:3 years ago

#21
Subscription based games create a high anticipation towards quality and customer attention. Even though many games based on Free to play / Freemium are successful, no one has high expectations towards these games.

The common notion for complaints in quality or technical issues is always "Well what do you expect? You're not paying on a monthly basis/anything". By these standards, a F2P game will always beat a subscription model as soon as it isn't on par with customer expectations. Only several F2P MMOGs actually manage to cover these areas and these few are well established.

Although nothing has been announced yet, the best move Bioware could make is to offer superb quality, customer orientation and offering their game as a service. A mixed subscription/item shop model l(filled with fluff items, no game changers) might to be a good mix and clearly distinguish themselves from the mass of F2P MMOGs.

Posted:3 years ago

#22
There are lots of games where the f2p model is implemented badly or too agressively. Many of them use the f2p system to disguise an otherwise pretty obvious cash milking concept that forever evolve around the same basic game mechanics. It seems that the f2p desing concept puts too many limitations on the game design with the major focus on the "milking". I guess, there is still a lot of room for a good subscription based game with gameplay instead of conversion as core desing driver. I'd pay for it.

Posted:3 years ago

#23

Andrew Ihegbu
Studying Bsc Commercial Music

436 146 0.3
I still wish this never happened and kotor 3 was coming out instead. I think one of the biggest consistent points that bioware had down pat was storyline and i fail to see that replicating in an mmo environment. Had they decided to finish the kotor trilogy i may have thought otherwise, but right now this screams cash cow and feels to me like it will do badly.

The bottom line is that the fans loved the IP for its storyline, gameplay mechanics and npcs, all of which i cannot see succesfully translating. Good luck bioware, don't drop the ball now.

Posted:3 years ago

#24

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