viedogame: Star Wars: The Old Republic annual profit to hit $80 million - Analyst

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Star Wars: The Old Republic annual profit to hit $80 million - Analyst Dec 1st 2011, 23:33 Wedbush's Pachter believes EA will pay LucasArts 35% in licensing fees; EEDAR's Divnich sees "little risk of failure." As the noise surrounding Activision Blizzard and Electronic Arts' latest military shooters fades, the battleground is shifting to the massively multiplayer online role-playing market. Earlier this week, Activision Blizzard president Bobby Kotick projected EA won't get much benefit from Star Wars: The Old Republic due to LucasArts' licensing agreement. However, a handful of analysts feel that Kotick missed the mark with that assessment. Analysts agree: EA's Star Wars MMOG will be massively profitable. Speaking with Eurogamer, Wedbush's Michael Pachter said that he expects EA to pay out 35 percent of SW:TOR's earnings to LucasArts, after the publisher has recouped its own costs. "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," he said. "If LucasArts gets 35 percent and if EA incurs around 35 percent operating expense, they make 30 percent, or around $80 million per year, in profit. That's not bad." Electronic Entertainment Design and Research's Jesse Divnich also believes EA stands to turn a hefty profit on its upcoming MMOG, telling Eurogamer that he expects the game to draw 3 million subscribers by next June. "We see little risk of failure for The Old Republic," he said. "Kotick's comments are valid in the sense that licensors do take a piece of the pie and is an economical hurdle that entertainment has been struggling with for years. In the same respect, how successful would EA's MMO be without the Star Wars brand?" "It's a give and take scenario, but given EA's historical ability to negotiate favorable license terms, I don't believe Lucas's share is a detriment to the game's profitability," he continued. "Taking into account multiple years in service and expansion packs, $500 million in total revenue is not a far stretch. If an MMO can't be profitable at $500m in revenue, then we are all doomed." Star Wars: The Old Republic is expected to launch on the PC December 20. For more on the game, check out GameSpot's previous coverage. Watch this video in High Def

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