Lucas Arts to Force Pull 35% of TOR's profits

[Martok]

The following news article from TorWars http://torwars.com/2...of-tor-profits/

Following our report a few days ago on Activision CEO Bobby Kotick’s claims that Electronic Arts will not make any money from Star Wars: The Old Republic because of George Lucas taking all the profits, we have further details to give you. According toreports by Eurogamer, LucasArts stands to take around 35% of the overall SWTOR profits, but only after EA has earned back on its investment. 35% may seem like a lot but EA still stands to make quite a profit.

Here are all the gory and admittedly boring details (assuming you are not an investment banker):

“The revenue split is around 35 per cent to LucasArts after EA earns back their investment. That means EA keeps most of the revenue from disc sales (they have marketing expenses and need to staff up the server farms), so they should earn a nice profit there.

Keep in mind that EA expensed the development cost when incurred, so much of the disc sales revenue will be profit.

On an ongoing basis, they will split revenue from running the subscription business. My best guess is that they will attract 1.5 million subscribers paying around $15 a month, so they should generate around $270 million in revenue. If LucasArts gets 35 per cent and if EA incurs around 35 per cent operating expense, they make 30 per cent, or around $80 million per year, in profit. That’s not bad.”

The past subject of subscriber numbers to be profitable is also clarified:

“Most MMOs require around 250,000 subscribers to cover the direct operating expense of the server farms. Given LucasArts’ revenue split, SWTOR would require around 400,000 subscribers to break even. That means they make money at 500,000 subscribers.

Based upon user commentary and consumer surveys, the profit potential for The Old Republic is high. We see little risk of failure for The Old Republic.”

You can view the rest of the article here.

[Balandar]

I read somewhere they expect over 2 million copies sold by the 20th. WoW's peak subscriber base was around 12 million I think. I bet SWTOR will surpass that.