Old Republic MMO Losing Subscribers Faster Than Expected, Hurting EA's Stock in the Process

Less than 6 months after launch, Electronic Arts' Old Republic has slipped from 1.7 million to 1.3 million subscribers, which is a drop much faster than expected -- as I noted last week, analysts expected it to fall to 1.25 million subscribers by 2013. At a reported budget of up to $200 million (plus tens of millions of more in marketing), and such a fast loss of paying subscribers, it's now worth wondering whether Old Republic will not break even (or at the very least, make enough profit to justify such a massive investment). The stock market is definitely worrying about just that thing: "[T]he drop in [Old Republic] subs -- as well as the company's reduced financial outlook -- have caused shareholders to offload stocks tonight," reports Gamasutra. "As of this writing, shares are down over 7 percent in after hours trading." Which brings up another reason to think the subscription-based model for MMOs is now dead as dead:

Not only are there hundreds of freemium alternatives, even the perception that an MMO is losing subscribers can hurt a company. Far better, again, to go freemium, which has a far better track record now of growing user numbers and revenue.

Tweet

Comments

[Adeon Writer]

What kind of payment plans were available? Couldn't this just be first-time hype train bi-annuals not renewing? (Assuming that was an available plan.)

[Pussycat Catnap]

This is just counter-hype taking its inevitable swing.

1.3 million is not a small number by any measure.

The game's lost its initial crowd of 'must try every possible WoW killer' fans, and has settled into a size most of its competitors dream of obtaining.

I suspect it will now start to settle in around this number, and become a stable offering.

Granted because its PC only, I never got on the hype wagon for it to begin with. And I suspect a lot of those who have left it did so because the graphics have a certain uncanny-valley problem common in MMOs (I think WoW succeeds because it is cartoony).

Further, Star Wars fans who are not Star Wars geeks were likely disappointed that it lacks Storm Troopers and Vadar... Never underestimate the value of a casual fan who doesn't really care that there were no Storm Troopers before the Clone Wars... they just want the movie in a game... The same can be said of any highly branded concept... Most of your fans will -NOT- be obsessed lore-geeks. They will just want the magic that brought your concept to their attention in the first place. In this case, Storm Troopers in funky 70s plastic suits and James Earl Jones voice overs.

Investors should realize that once the 'Star Wars lite' folks leave, the remainder is likely to be dedicated to the deeper lore, and less likely to abandon ship.

In this case while the game has failed to capture the magic for the casual-lite-fans, it has managed to capture something the deep-in-the-lore fans, the people with Darth Vadar underwear, are interested in. At least 1.3 million of them.

[Ezra]

You still seem wholly confused by what freemium means. It's a combination of the word "free" and "premium". It means customers can access a service at a limited free tier, and graduate to a subscription for the full service.

With MMOs, this is how Dungeons and Dragons Online, Lord of the Rings Online, Champions Online, City of Heroes, Age of Conan, and other "freemium" MMOs work. Free with restrictions, subscriptions for the full game.

[Emperor Norton]

Insane way to do a business,it has to be a block buster or it's a financial disaster.

[connie Arida]

Star Wars isn't "uncanny valley"... this is http://droarty.cgsociety.org/gallery/1012695/