The layoffs have me confused more then anything else. Help?

The 80 + 20 is how much EA directly paid into the project after purchasing Bioware and the rights to TOR. People seem to forget that's money EA paid out after spending $860 million to acquire Bioware in the first place. It does not include how much Bioware had already spent on the Bioware-Austin studio, a studio built exclusively for TOR development that was finished before EA bought Bioware, or on the initial development of TOR prior to being acquired by EA, nor how much of the $860 million EA paid for Bioware was to obtain the rights to TOR.

Anyone who thinks this game didn't have a direct + indirect cost well in excess of $300 million knows nothing about business. EA didn't spend $860 million on Bioware for ME and DA.

Does that mean that WoW is currently in dire straights? They've had more "free game time" specials than I can count, so that must mean they're in serious trouble.

As I said before, they clearly state in the shareholders' materials that the 1.3 million is composed of a much higher number of paying subscribers & regular/hardcore players VS casual (apparently referring to time spent playing the game). If you have a better source, the one where you get the info about the number of "real subs" being "a LOT less than 1.3M" aside from a practice that's almost universal throughout the industry, please provide it.

http://investor.ea.com/annual-proxy-..._Arts-2011.pdf

According to this, their business is primarily "hit" driven. According to them, only a certain number of "hit" titles account for the large majority of income generated among game sales. As such, they focus on developing and/or as many "hit" titles (including those which can have sequels made) as possible. That's the primary drive of their business. As such, it's not unusual to assume that the newer games would be placed on a higher priority, particularly when EA has already discussed gearing up production to be ready for the next generation of console games. Also by the way, SWtOR IS in their top ten list, just not their top 5. Considering they have more than 5 big-name titles coming up, that's not surprising.

(Also, it's not surprising that the next Warhammer installation would make the same list with SWtOR, as developing online and digital distribution/gaming properties is one of their big goals for the next year. Honestly, did you read these materials first?)

Actually, I was warning against taking the numbers of the loss in and of themselves without context, not trying to make a direct comparison between the games. Also, I doubt Blizzard would have really been killed by a failure of WoW when they have plenty of IPs they could rely on otherwise (or, worse comes to worse, license out/sell).

I've only seen $80M - $200M, never as high as $300M. Could you cite your source on that one?

I'd also appreciate your source on how many people were on the SWtOR team. I can't seem to find any statements concerning the number of people on the SWtOR development team except for the wikipedia article on Bioware itself, which quotes a total employee count of 800. If so, that would seem to almost imply that the majority of the Bioware developers were working on SWtOR at the same time they were working on several other projects, which would make your analysis ineffective.

The cost of a product is recorded as direct materials, direct labor, and overhead costs (indirect costs & costs to maintain production facilities) used to produce that product and ONLY that product. Without a more precise quote on how much was spent for direct materials, how many hours of direct labor it took, etc, there's no way of knowing just how much of that was put into the development of SWtOR and no meaningful way to decipher development costs aside from guesswork. Taking the count of employees over that time, assuming an average salary, and then deriving production cost from that ignores several other possible factors, and frankly wouldn't be considered acceptable in any analysis.

True, or it could be less based on the fact that an MMO is an ongoing property with more potential for long-term revenue. I'm as in the dark on this as you are, but judging from the accounting records they've published thus far, their marginal costs are quite a bit lower than their marginal revenues (well, they'd have to be, otherwise they'd report a net loss).

However, I don't think anybody's tried to make a guess at the contribution margin of SWtOR's monthly fees. Most of the discussion in this area has centered around the comment that SWtOR only needed 500k subscribers to remain profitable. I'd assume this would include factoring in the various licensing fees.

Yoda would say "Difficult to see. Always in motion is the future".

When dealing with LUCAS ARTS and this particular IP....THE FUTURE IS UNCERTAIN.

In short, OP, it means that BW needs to consolidate its team and do a hard reset.
There were, for example, a disgusting number of posts following the announcement directed at the former Community Manager that were mocking, taunting, insulting, or downright rude. These would indicate to me that at this point in the game's development, player expectations and realistic development time frames are not lining up, and for Bioware, the best bet is to trim excess and change the faces of some of its PR, just to temper the mood.

I don't like it, but I don't think it's doom. Just disappointing. (This is my first MMO, and I'm afraid that all I've heard of the "mmo types" seems to be true)

https://performancemanager4.successf...5CPJjfXB4JY%3d

Actually, there are 8 upper-level positions available specifically at Bioware Austin, with the "careers" page encouraging anyone interested in a position to send a resume to a specific email address depending on the studio they wish to work at. Now, if you look at the job-search function on EA's page, you'll notice something peculiar- out of the 692 listings they have, only 185 are for "software engineering". If you look further at Bioware's listings, most of the listings for items related to game programming are attributed to their headquarters in Alberta, Canada (including the only "Programmer" listing). The language of these listings doesn't seem to indicate positions that are unique to the Bioware Austin location. There's also this bit from a listing for the "programmer" position in Edmonton, Canada:

So, yeah, I doubt Austin's the whole story.

More assumptions, more false accusations and more self-proclaimed expertise. Again, your little school book has taught you little and now you're just being naive.

I'm not offended, I just have better things to do than be called a troll (which I think you misunderstand the definition of what a troll actually is), and/or be lectured by a young man who's portfolio more than likely has no actual real money associated with it. (See, I can make assumptions too!)

The point in this entire thread is this ... layoffs have been made, subs are declining at a rapid rate, consumers are not happy, stock value is down, investors aren't happy and EA is doing nothing more than posturing in their attempt to recover by saying they're "restructuring."

Could you cite a source for the claim about the EA president stating that their goal was 11 million subscribers in 2008? The only references to this I can find refer to SWtOR competing with WoW, which had 11 million subscribers at the time.

So, EA is being honest when they say they're reallocating resources, but being dishonest when they say that one of their priorities over the next year is to enhance SWtOR's profitability through new content releases & developing their online/digital offerings? How does that work?

By the way, general operating procedure is to maintain any project whose marginal revenues exceed marginal costs. This is true for all businesses. Any profit is a profit. The profits from SWtOR don't amount to a great deal when compared to the total of EA's profits (which isn't surprising. How many games has EA released over the past year?), but it certainly isn't chump change. Considering the fact that the game has more potential profitability, and they'll probably wait to downsize in the event that patches 1.3 & 1.4 fail to start attracting back subscribers. However, that's just guessing on my part.

Could you cite a source for the $18.2M figure?

Which is why most companies don't do that for failing projects. Again, WoW has done this before, and some games like Eve have the potential to give away several months for free assuming you accumulate enough in-game money to purchase PLEX. That doesn't indicate bad health on either WoW's or EVE's part, so why should it be so for SWtOR?

You mean a game that has finished primary development and been released didn't get mentioned in their development priorities? The horror!

By the way, citation pl0x? Just about every piece of investor material listed SWtOR in the top ten of their priority list, above Tiger Woods which is important to them as a part of their business focus (the "hit" games that can generate multiple sequels). Every piece of information about SWtOR emphasized the future development and specific content initiatives. If SWtOR was in as much trouble as you claim, you'd expect them to be making claims about redirecting SWtOR's resources to other projects, or that they intended to just maintain its profitability rather than work on increasing it.

EA categorically denied the specific rumor that layoffs had already occurred, not that there were no layoffs or restructuring in the future. There's a difference between the two that I'm sure you're capable of noticing.

Also, didn't you already claim that EA was restructuring rather than making net layoffs based on what was stated in their shareholders' conference? Do you just pick and choose different contradictory premises to support different arguments?

You've failed to demonstrate any trends, cite any sources for the majority of your claims (and when you did, you either quoted incorrectly from the shareholders' information or attributed statements to them that weren't there), made multiple assumptions without proof, and made contradictory statements for different arguments.

And we're not talking about specific investor behavior here, we're talking about EA's behavior. The only reasoning you've given involves making assumptions concerning their actions that would apparently ONLY apply to this game, as they don't hold up when applied to other MMOs. That's an error in logic, and I think I've adequately demonstrated the other problems with your statements here.

If thats the point of the thread than it should be locked. 99% of EA holdings are held by long term investors (like the rest of the stock market) or owners/principles in the business. SWTOR has absolutely 0 effect on the price of EA stock. Zero zip nada. EA stock has lost half its value over the past two years because of the #1 overall softness of the market and #2 by losing ground in console sales. If you ask any major investor in the stock market they will tell you they do not buy and sell on whims. They also do not care about SWTOR its not even in the top 5 as far as profitability over at EA.

So to sum up SWTOR has absolutely nothing to do with EA stock tanking. It has been down since before SWTOR even came out.

And, as has already been pointed out to you, the layoffs were an expected element of the "restructuring" to increase the ratio of software engineers to other employees and was announced in the beginning of May.

I never said you were a troll. I said I doubted your credentials when you claim to be an investor but were apparently clueless of larger market trends until I pointed them out to you and you continue to insist that their latest actions have only been "posturing" when the only way to reach that conclusion is to make presuppositions about other information that is either unavailable or untrue.

Frankly, I don't care who or what you are. I care about what you said and whether or not it holds water, and it frankly doesn't.

Sorry man these layoffs were not normal. They also were not expected. You dont normally lay off QA people on salary (not contract) and you def do not lay off your head CM. While I agree with you on the stock market these layoffs are because EA has thrown 300 million at this and it STILL lacks basic MMO functions. I said in another thread I would be laying off a ton of people including the head guys if I was able to.