Four months after Electronic Arts Inc. (Nasdaq: EA) announced that BioWare’s massive multiplayer online (MMO) video game “Star Wars: The Old Republic” was transitioning from the genre-standard business model of monthly subscription fees to a free-to-play distribution model, EA has finally revealed that the switch will take place next week on Nov. 15, one week from the Thursday’s announcement.
The switch comes at a time when EA needs to reassure concerned critics and investors following the company’s worse-than-expected third quarter earnings report released late last month.
The free-to-play (FTP) system will function similarly to the existing subscription model, and players will be able to follow the same class storylines that exist in the game already and bring their characters to the current level cap of 50.
As a thank-you gift to current customers for their loyalty, existing and previous subscribers will be given a chunk of “Cartel Coins,” the virtual currency with which EA plans to monetize the game following its transition. The amount of coins players will receive is variable depending upon how long they have been registered in the game.
“Star Wars: The Old Republic” had only spent eight months on the market when EA decided to transition the MMO to a free-to-play model, raising many eyebrows in the industry about the projects future viability or its potential to hold its own against the entrenched industry rival Activision Blizzard (Nasdaq: ATVI), whose “World of Warcraft” still holds the genre’s record for highest subscriber count.
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‘The Old Republic” was well received by critics and attracted over one million users in its first month on the market, according to The Verge. But this didn’t prove to be enough to offset the unprecedentedly high production costs: An L.A. Times report from January revealed that "The Old Republic" cost EA nearly $200 million in the six years it took to complete the game.
The transition to free-to-play was therefore taken by many as a sign of EA’s failure. The fact that BioWare lost its “Star Wars” studio’s general manager and company co-founder Dr. Greg Zeschuk shortly after the game’s transition was first announced didn’t do much to allay these concerns. Nor did the announcement less than a week later that another one of their flagship Bioware products, Command & Conquer, was also being made into a free-to-play game.
EA, for its part, has maintained that freemium business models are simply the way of the future in their industry thanks to the “choice and flexibility” that it offers to attract a wide tract of players.
“With free-to-play, our blockbuster franchises become even more accessible and available to all types of gamers,” Sean Decker, vice president of EA’s PlayFree portfolio, told me in September for a story about the freemium marketplace for video games. “I think you will continue to see EA release more free-to-play titles as long as we are confident that players want that and that we can create a great experience to match their expectations.”
Even “World of Warcraft” has been shedding paying subscribers at an increasing rate since the game’s all-time-high of 12 million monthly active users (MAUs) in October 2010, a trend that was only partially offset in the third quarter thanks to the release of the “Mists of Pandaria” expansion pack to the game. In general, the subscription model is still under siege by its free-to-play counterparts, a trend that may ultimately vindicate “The Old Republic’s” current struggle. Either by pure coincidence or artfully subtle public relations planning to herald this industry-wide shift, "Angry Birds: Star Wars," a "Stars Wars" branded version of one of the most successful freemium apps ever created, was released the same day as "Star Wars: The Old Republic's" FTP transformation was finalized.
Shares in Electronic Arts fell in Thursday trading, dropping nearly four percent to $12.91 per share.