EA Profitibility & the real reason for the free month

Just did some quick math on EA and posted it on the forums in response to someone:

Originally Posted by Rooks_THX
They're not doing it to retain subscribers. They're doing it to pad the numbers for the shareholders report. They know the ship is sinking, and instead of actually trying to fix it, they're telling the passengers everything is fine, just to remain in their cabins, while the captain and crew run for the lifeboats.

This is very true. EA's year ended on March 31st and their annual report will be coming out during the first part of May. They have already banked their revenues for the 1st quarter so the freebies given in April won't hit until their next fiscal year. 

When they have a meeting with the investor community in May the biggest question will be how many subscribers do you currently have in SWTOR since the 1.2 patch? Considering that annual revenue for EA last year was about $3.5 billion and based on their last conference call SWTOR's annual revenue should equate to $300+ million ($15/month x 12 months x 1.7 million subscribers from last report) it is a huge part of their business. 

EA has spent a ton of money for infrastructure, programming, support and advertising on this game and it will have a huge effect the entire company if this game appears to be heading down the same path as Warhammer. The difference between SWTOR and that game is the amount of money invested and if it looks to be failing investors will crucify the stock which will cause some really tough questions from the board. 

EA realizes all of this and are hoping to buy as much time as possible to fix the issues before the board tells them to make drastic changes to improve shareholder value. I hope they are successful because despite everything else, EA/Bioware make a lot of game I like and I want that to continue.

Despite the fact that I didn't get a free month, I do hope Bioware is able to fix this mess before headquarters is forced to tell them to start tightening their belt.  The first clue will be if we hear about downsizing in the next few months.  It will be especially bad if it is released before the May conference call as that means they are proactively making changes which means internally they know thebattle is over and upper management is working to save their jobs.