I wrote a few weeks ago describing the lengths that EA has gone to keep their current subscribers. I'm sure EA realized a long time ago that their biggest hurdle was going to be their profit call for the quarter/year ended on March 2012. That's because the game was released in December and which meant that the December profit call would have good numbers. Everything they've since that time has been done to make the March numbers look as good as possible.
That's why 1.2 was realized in April. That's why a free month was given. That's why they had a guild summit in March.
On the surface it appears their efforts were unsuccessful as the the LA Times is reporting that current subscribers dropped from the January number of 1.7 million to 1.3 million in April. This is even worse when you consider that a large percentage of people only kept their subscription in April because they got a free month if they were subscribed on the 25th (FWIW, my subscription ended on the 23rd and I was seriously considering cancelling but re-upped to get one month free. I will reconsider on June 23rd depending on features added in that time).
The most interesting statement from the LA Times article is that SWTOR needs 1 million active subscribers to pay for operating costs to keep the game running. Keep in mind this means that at 1 million subscribers they aren't getting any payback for the cost to develop the game. This level only keeps the lights on to pay for the month to month costs. If you consider that 1 million subscribers equals $15 million in revenue a month, that means their operating costs are around that level which equates to about $180 million annually.
That's a big problem. EA/Bioware is painfully aware of what happened last year with Rift. In their first quarter they peaked at 600,000 subscriptions but two quarters later they dropped to 250,000 and are still falling. The same trend happened with Warhammer - peak of 850,000 with a drop to 300,000 six months later and 175,000 within a year. Age of Conan followed a similar pattern - peak of 700,000 with a drop to 410,000 in 4 months and around 100,000 within 8 months.
One of the lead developers on the game recently said they are spending all their development time on a looking for group feature. Given the numbers above that is no doubt a lie. A few weeks ago I stated that the 10% reduction in staff was a sign that upper management was taking proactive steps in preparation for the May profit call. If 1 million is the break even for operating costs then the #1 priority of the SWTOR team is reducing operating costs and that means server transfers / merges.
That's actually a good news. One of the biggest issues facing the game right now is even though there are 1.3 million active subscribers, they are spread unevenly over 200+ servers. With the number of people that are playing they only really need about 100 servers which means they are paying for twice as many servers as they need to and getting to this level will not only reduce costs but go a long way in addressing one of the biggest problems in the game.
As for me I need some information that both server merges and a looking for group feature will be in the game by the end of the summer or I'm going to let my subscription lapse. I'm sure many other people that still have faith in Bioware feel the same. The next 3 months are vital if the game is going to have a future or the August profit call will be fortunate to hit 500,000 active subscriptions. If that happens EA will be losing at least $3 million on the game every month1, so drastic action will need to take place in June/July or the 10% drop in EA's stock that happened today will seem mild in comparison. Anyone who's ever been in a publicly traded company knows that spells doom for any project and development will be severely curtailed which would kill any remaining hope for the game.
1 - I arrived at this number by starting with their number of 1 million people needed to break even which would mean a monthly operating costs of around $15 million. If the subscription number plummets to 500,000 monthly revenue would drop to about $7.5 million. One of the reasons many developers get into MMOs is because costs are pretty fixed in terms of support and developer costs. The only savings I can see is bandwidth along with servers (if they can get the programming to work to make this happen) but there is no way they can reduce costs enough to totally offset the reduction in revenue. That means the monthly loss on the game will be anywhere from $3 million (assuming bandwidth/server costs are 30% of total) to 7.5 million (no cost reductions).
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