Sunday, May 13, 2012

The Woes of EA, BioWare and SWTOR

By: Martin Coronell-Rodriguez/The Galactic Press

Image Courtesy of EA/BioWare.
These past few weeks have been pretty rough for BioWare Austin, the developer company for Star Wars: The Old Republic, and the publishing company Electronic Arts. From the rumored layoffs of 500–1,000 employees EA was going to do to the subscriptions of SWTOR going down nearly 25%, there hasn't been much of a positive outlook for the game nor for EA or BioWare.

Approximately four weeks ago, a Startup Grind report claimed EA was going to layoff 5–11 percent of its workforce, which would equal about 500–1,000 employees. Layoffs would begin as soon as the end of the week of April 8th.

The story is written by former EA employee and Burnout franchise Product Manager Derek Andersen, and cites multiple sources within the company for the news. Andersen pointed out what have contributed to the layoffs, noting that the MMORPG Star Wars: The Old Republic did not meet internal sales estimates and is facing declining subscription numbers. Additionally, he pointed to Battlefield 3's post-launch marketing campaign, which he reported at an estimated $30 million.

However, EA responded and denied the unconfirmed reports claiming it would lay off 500–1,000 of its employees.

Despite the article explaining the negative contributions of SWTOR and Battlefield 3 and the ongoing internal pressure CEO John Riccitiello is going through, the publisher offered the following statement to MCV after denying the news:
"There are no layoffs as such, we always have projects growing and morphing. At any given time there are new people coming in and others leaving. EA is growing and hiring and building teams to support the growing demand for digital games and services."
And although "seasonal roll-offs" are nothing new for the publisher, it's been a while since mass layoffs hit the company.

Here is also an update that was sent to Joystiq by EA Corporate Communications:
EA is growing and looking to hire hundreds of people for our digital, console, mobile and social games. Like all game companies, we make occasional adjustments to resize teams as projects are completed and new priorities are established. Overall, we expect that headcount will be up at the end of this year.
A while after EA denied the report of its mass layoffs for the company, a confirmation from the publisher indicated that a "small" number of layoffs had been put into effect for the MontrĂ©al branch of EA—the branch with the same minds behind Army of Two, SSX and Need for Speed. However, EA noted that the number wouldn't be as expansive as the original numbers that were originally rumored.

According to International, they received word from EA Corporate Communications that...
"EA Montreal is reorganizing some teams to focus on digital initiatives, including new mobile and social projects," ... "These are routine changes which address the cyclical nature of the game industry. A very small number of employees will be impacted - many will be assigned to new projects at EA, others will leave the company."

"Overall, we expect that EA's headcount will be up at the end of this year."
This basically reinforces what EA stated before, that they would be hiring more than firing by the end of the year.

No official number on the "small" number of layoffs, so there's no way to verify just how many employees have been fired. However, this does contradict what EA had reported denying the rumors saying that "There are no layoffs as such, we always have projects growing and morphing...", which they released to a number of sources.

Regardless, EA had no choice but to deny the layoff reports for the sake of protecting resources, and ensuring that public perception of the publishing company wouldn't be tarnished any further than it already is, which in turn could affect the company's already-low stock price, which has steadily declined by a few points since the Mass Effect 3 fiasco that began in early March.

What the future population of SWTOR might look like.
And if all of that isn't bad news enough from EA, but Star Wars: The Old Republic has lost 400,000 subscribers (a 24% drop of subs), which leaves subs totaling at around 1.3 million active subscribers. That is quite the drop from the 1.7 million reported in February.

EA also blames these drops in subscribers on the casual gamers leaving the sci-fi MMO, and the Eurogamer article highlighted some quotes from an investor call. EA Games Label President Frank Gibeau said this about the significant loss of subs:
"When we launched the product back in December, it was an event launch. We brought in a lot of users, and with a brand like Star Wars, it reaches out much past the hardcore MMO fan base into the broader market."
"And as the service evolves from here, what we're seeing is that some of the initial casual customers have gone through a billing cycle and decided not to subscribe to the game."
I find this quote to be quite interesting, due to the fact that it would traditionally be the hardcore players that would be harder to retain, as opposed to the casual crowd. They grind through the content at a faster pace, and are generally more critical of changes inside a game.

Additionally, EA CEO John Riccitiello made a few statements towards the amount of attention SWTOR is receiving:
The Old Republic is in EA's top 10 franchises in terms of profitability, "but it's not in our top five". "So it's a business contributor, while important, is not as important as Medal of Honor or Battlefield or FIFA or Madden or The Sims or SimCity, but it's more important than Tiger Woods PGA Golf."
"So while I understand there's an enormous amount of interest, I don't know that it warrants as much as what we're seeing right now. But we love the franchise, we're going to grow the franchise and just like we want to see Tiger Woods Golf grow or SSX grow, or Madden for that matter, we're going to drive this one for growth."
I found this really disappointing to hear. It sounds like EA is making the subscriber loss and the potential of the game in general very insignificant—which it isn't at all. Regardless if this is truly the case or if they're adjusting to the current situation, it remains to be seen, but EA should devote a ton of their time and effort into SWTOR. The sci-fi MMO has only been out for less than 5 months, and it has to expand in many ways in order to keep current subscribers, to receive new ones and to regain ones that were lost.

Even though analysts were right with the declining subscriptions, I'm hoping for the best for this game as it has a lot of potential and could bring in a ton of more money for EA and BioWare in the years to come.

Be sure to stay tuned for my appearance on The Star Wars Underworld Podcast, where I'll be talking about Game Update 1.2: Legacy instead of writing it, and get to hear lots more like a more in-depth look on the history of the Old Republic era and already-known information on Game Update 1.3: Allies.

To keep up with all the latest news and updates about Star Wars: The Old Republic, be sure to 'Like' us on Facebook. And for everything that the rest of the Star Wars universe has to offer, please 'Like' The Star Wars Underworld, also on Facebook. Comment, share, and 'like'!


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