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SWTOR is proof subscription MMOs have peaked, says Pachter

Tuesday, 10 July 2012 15:16 GMT By Stephany Nunneley

Analyst Michael Pachter believes subscription MMOs have peaked, stating that if BioWare couldn’t make a success out it with Star Wars: The Old Republic, “then no one can.”

“I thought SWTOR would make it big, but it didn’t,” he said. “It looks like subscription MMOs are as big as they’re going to get – there are only 6-7 million people willing to spend $15 a month.

“If Star Wars couldn’t do it, made by Bioware, then no one can do it.”

Pachter said during a lunch with John Riccitiello, he told the EA CEO the reason no one was buying stock in the firm was do to being in the “fifth year of a three year turn around.”

Riccitiello reportedly told the analyst: “I thought new consoles would be out around 2010-2011,” but Pachter said the reason publishers like EA and Activision are unwilling to take risks on new IP is due to the “over-stretched console cycle.”

Thanks, PCGamesN.

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38 Comments

  1. DSB

    “Pachter said during a lunch with John Riccitiello”

    So that explains everything.

    #1 3 years ago
  2. Deacon

    it proves nothing… fucking chumps.

    #2 3 years ago
  3. OlderGamer

    Seems like everywhere you go, you read that people are complaining about this gens long life cycle. From gamers wanting better games, to analyst, to pubs.

    Perhaps shorter lifecycles with cheaper hardware, oh wait…something like Nintendo has been doing…hmm.

    #3 3 years ago
  4. Phoenixblight

    @3

    Again Sony and Microsoft have been making a profit off each console sold after the first few years where Wii has stopped to a crawl after a few years. Each business model has its perk and cons. Sony and Microsoft still feel the long cycle is worth going for with them making the next gen console with this in mind.

    #4 3 years ago
  5. OlderGamer

    They won’t if people stop selling/buying games.

    #5 3 years ago
  6. TheBlackHole

    “Riccitiello reportedly told the analyst: “I thought new consoles would be out around 2010-2011,” but Pachter said the reason publishers like EA and Activision are unwilling to take risks on new IP is due to the “over-stretched console cycle.””

    Well, no shit.

    #6 3 years ago
  7. DSB

    He’s right though OG. Nintendos strategy has gotten them absolutely nothing. They’ve made 0 dollars and 0 cents since the Wii.

    #7 3 years ago
  8. Phoenixblight

    @5

    Yes because that will totally happen. Been standing out in the sun too long with your doomsday sign?

    #8 3 years ago
  9. OlderGamer

    @DSB what?

    @PB down 34% year on year. That is 1/3rd less then last year. And % have been droping every month from Nov onward. Are you reading, just today several posts touching on the subject. Don’t troll me, your not that good.

    Edit: and before you jump up and try and take everything in a word for word fashion PB, obviously I was talking in abstract, when I said “if no one buys em”. Of course I was refering to the decline and drop off in sales. Not sugesting that people will wake up one morning and noone will play a single game or buy a single game or some such sillyness.

    #9 3 years ago
  10. Phoenixblight

    @9

    Its YoY its a snapshot of this period this year compared to last year. We have had very few game released these last few months. Just Max Payne 3, Diablo 3, Lollipop Chainsaw, Ghost Recon and Spec Ops. Where Last year we had more releases at this time period. Its the summer hole and not only that its the last year before next gen comes in.

    #10 3 years ago
  11. OlderGamer

    Yep, and I said the samething over here PB, http://www.vg247.com/2012/07/10/pachter-predicts-34-yoy-decline-in-npds-june-sales-report/ that you just said.

    I am not saying that the end is nigh and games will go away forever all that such crap. Just saying that several factors contribute to the over all picture we have today. And the extended life cycle is one of them.

    http://www.vg247.com/2012/07/10/square-enix-this-generation-has-been-way-too-long/#comments

    “This generation has been way too long, and I say this because you have a lot of developers that work on a new platform, and perhaps will not succeed, so they will wait for the next generation, and will jump on that platform. You could not do that with this generation though. So these developers went elsewhere to see if the grass was greener. They found web browsers, they found iOS, they found other things and a lot of them won’t come back to the hardware platforms…” __Julien Merceron, the director of worldwide technology at Square Enix.

    Alot more goes into it of course. But long extended lifecycles don’t help. A continues console lifecycle is bad. it works on PC because PCs are upgradable and backwards compatable, games are scalable. And, well it is a PC. A different beast all together. Consoles need new hardware every 5 years or so, give or take in order to remain viable, imo.

    #11 3 years ago
  12. DSB

    @9

    Nintendo shareprice 2006: 13 dollars and 65 cents

    Nintendo shareprice 2012: 14 dollars and 46 cents

    So they’ve made maybe a million dollars since the Wii, but that’s still disappearing day by day.

    Their shareprice hit a high of 80 dollars in 2007. So they’ve lost more than 90% of the money they made on the Wii and DS over the last five years.

    #12 3 years ago
  13. ManuOtaku

    #12 DSB i dont think is fare to compare nintendo stocks shareprices in order to discuss the economical income and or success of the wii and the ds for that matter, because shareprices also includes decisions made in other revenues like 3DS, gaming division, also external factors, etc, therefore they indicate the overall strategy as a business company, but doesnt indicate a clear picture for each console or handheld, for example the mistake of the 3ds price did affected the shareprices a lot, therefore for wii or ds purposses is not fair to show this, having said that those numbers are a great thing, because they indicate their overall way of doing business, but for each consoles we have to go with direct and indirect costs vs overall money from sales in order to see which fare better

    #13 3 years ago
  14. Phoenixblight

    “Consoles need new hardware every 5 years or so, give or take in order to remain viable, imo.”

    You keep beating this drum but SOny and Microsoft financials say otherwise. If they had stuck with the 5 year plan they would continue to stay in the red and never making a profit off their systems.

    The 10 year term has proved to make a profit for both manufacturers where they are earning a profit for every console sold not only that making money off the devs who pay for the dev kits and license also to get on to their digital stores one thing Nintendo has yet to grasp.

    #14 3 years ago
  15. OlderGamer

    I think, though DSB, that is as much of a reflection on the economic climate then hardware lifecycles. Surely if Nintendo stayed with Wii, things would only get worse for them. They, like MS and Sony, need new hardware.

    If you look at sales figures they are still miles ahead of sony and MS. Right now they are in a transition year between one gen of Nintendo hardware and the next. I would expect sales to continue to dip for MS and Sony in the coming year or two leading upto the release of their new hardware too.

    Important to remember that Nintendos hardware lifecycle is on a different scheduel then the other two guys. They are just at the end of that cycle.

    #15 3 years ago
  16. DSB

    @13 It’s an overall measure of their performance, and considering that they outrank their nearest competitor 2:1 in terms of consoles sold, I think you might expect that they’d made some money on that.

    They haven’t, unless you think that the 3DS has cost them enough to swallow every single cent they ever made on the Wii and original DS. I really doubt that’s the case.

    They have no online component worth speaking of, and their disc license is practically worthless to a third party. I think that’s a fair an accurate analysis.

    The only third party game selling more than 2 million on the Wii is Just Dance. As a publisher, why would you ever pay Nintendo for the chance to sell maybe 1.5 million copies on an exclusive?

    @15 Like I say to Manu, the sales figures just makes it look even worse. They should be making money on the 100 million consoles sitting in peoples homes.

    Disc licenses from third parties, and revenue from games sold online. I don’t think they are.

    The vast majority of companies have rebounded from the credit crunch. Stock is trading at the same prices it did in 2007. So that’s not it.

    #16 3 years ago
  17. OlderGamer

    Your completly missing the big picture PB, your only grasping on to sound bytes and bits to suport your view.

    If you read thro my posts on the subject you will also see that along with the shorter lifecycles, I advocate less expensive less tech laden hardware. If you can’t turn a profite on hardware till year four or five, your not adapting to the current global conditions. Your forcing something onto the market that MAY have trouble earning you a profit and sustaining itself long term.

    That is where I think(and this is just my opinion I am not a self proclaimed expert lol), Nintendo has the better strategy. Cheaper hardware. Shorter lifecycles. And Nintendo doesn’t need to rely on 3rd parties to sell units or make money. Nintendo will likly make money on every WiiU system they sell, day one. They make money on 3DS.

    Can’t say that about MS or Sony. I think in the day and age of rampant second hand sales, and tough economic climates that the 1995 way of thinking on hardware costs and sales needs to change.

    #17 3 years ago
  18. DSB

    Actually, strike that last bit. EA are doing terribly it seems. They’re really going down. Activision seems to be the only one that’s actually close to where they were before the crash.

    Ubisoft are stable but not great (scum floats, and all that).

    Microsoft are obviously fine. Sony are having trouble selling anything but PS3s.

    #18 3 years ago
  19. OlderGamer

    Alot of companies are doing much worse today then when this gen started. Kind of puts Nintendos financials in perspective. I think they are weathering the storm just fine.

    As for Acti it is easy. CoD, Wow, Diablo III and to a lesser extent Star Craft II. Funny tho, mostly this is about consoles(conversation) and a lot of actis cash flow comes from its PC Blizzard related games. Still CoD is a monster franchise.

    #19 3 years ago
  20. DSB

    @19 If you compare it to EA or Ubisoft, then that’s fair.

    But if you consider the fact that they have the best selling console this generation, I don’t think you can say they’re doing fine.

    People don’t buy into businesses to have them go nowhere. They want cents on the dollar. In this case they’ll be lucky to walk away with a dime.

    #20 3 years ago
  21. ManuOtaku

    #16 yes i agree, but i meant there are a lot of external factors as well,just like investors perception,outside perception as well, and overall state of the economy, etc, that incides on those shareprices, moreso than any especific console or product done by them, i think for example the message sent to this external factors, regarding the reduction of bonusses and monthly payment for their staff, did make an impact on those numbers,therefore this external situations or factors should not be directly translate to an especific nintendo console, because in the end is more akin to their overall strategy rather than an specific product.
    Also For the upcoming things, we dont know how the online component will be and overall strategy, therefore we dont know how much they had invested, which could also incide on those numbers, there are a lot of factors rather than the wii and ds performance

    #21 3 years ago
  22. DSB

    @21 Perception is reasonably short term though. At the end of the day, investors look at the facts when they put down their money. They don’t have the same loyalties or concerns that fanboys do.

    I didn’t really bother to check gaming in general though, which seems to be in a pretty serious crisis right now, so walking away with a dollar extra on the shareprice actually isn’t bad.

    I do think they need to bring it home with the third parties and online for the next one if they want to avoid flunking. And I don’t think it’s as obvious to Nintendo as it is to us.

    #22 3 years ago
  23. OlderGamer

    Yeah, I see what your saying DSB. But at the same time, at a time when many companies are bleeding money, making a dime or two looks pretty good.

    #23 3 years ago
  24. DSB

    Yeah, on closer inspection that’s certainly true OG.

    But now the challenge for Nintendo is to avoid going the way of the brick and mortar.

    I don’t think people are going to rekindle their love for plastic packaging and peripherals.

    It’s all about the apps and the webs.

    #24 3 years ago
  25. OlderGamer

    I think you could be right, DSB, Nintendo could struggle next gen. Tbh, I kind of expect them to. I hope not, I love their products. But next gen could be trouble for both Sony and Nintendo. MS seem to have a good strategy and solid direction. They seem tough to beat. Then again we all thought Sony would be unstopable coming off of both PSx and PS2.

    Will be interesting to say the least.

    #25 3 years ago
  26. ManuOtaku

    #22 Yes is true, perception is short, but i put it there, because most of the time, lets call it a 50%/50%, investors go with their guts and with what their instinct told them to do business, and for that perception plays its part, of course they see the facts as your rightly put it, but that will depends on how they read those facts, sometimes for example the reduction of their payment , in nintendo case in my previous comment, can be see in different light, it will depend on their guts, instinct or perception, and in how they read those facts.

    #26 3 years ago
  27. GrimRita

    How does Patcher even dream of all this bull shit? SWTOR is not proof at all. If you make a below average game, have the cheek to charge a premium monthly fee, people wont pay it.

    However, if scores of people found value in it, then it wouldnt drop 700k players inside its opening few months.

    Thats the truth.

    And it also proves another thing, no matter how much money EA spent paying off the gaming media to give this mess a high review score, it didnt work. Go check that Patcher and report back.

    #27 3 years ago
  28. Puggy

    Really? I mean does it come down to “If we can’t do it, nobody can.”? I would not say subscription games have peaked, it is more like that people are not satisfied that easily anymore. Sure back in the old days you offered a little bit and were praised for it, people paid your fee even if you offered nearly nothing (compared to nowadays at least). But that changed.
    We as costumers have seen that there is a way to offer quality, that there are some features in games that make them more accessible and more entertainable.
    Back then people just did not log in for some weeks or months without cutting their Subs, nowadays, if you do not like the game, you cut your sub and be done with it.

    I doubt that there are not enough people who would pay a monthly fee to play a game, it is just that people want to see something for their money, beside being allowed to log in.
    For me at least those things are games and I pay to be entertained. Not to do something I do not like for days just so I can enjoy myself for some minutes each week. That’s what I got a job for.

    Still remember the good old discussions about a LFG tool for SWTOR, people complaining about it ruining community, saying it destroys communication and all that. Though what did it get the game to not have a proper lfg tool? Sure, there were ways, looking for groups, like whispering everyone in a level range, spamming in… yeah, some place where people might gather, possibly friends lists and guilds, but it was not for the big crowd as it seems. Since they were used to LFG auto grouping tools. Maybe they be good or bad does not matter. If I go see a doctor with some nasty disease I want some proper medicine and not have him or her offer me some herbs or eels. Sure it worked back then, but… yeah.

    So just saying, just because a game does not do well, doesn’t mean people in general are not willing to play sub based games anymore. It just means that what you offer is not worth what you want to take in retrun… in the eyes of those not playing at least.

    #28 3 years ago
  29. OlderGamer

    Puggy +1

    I also dislike games that focus so intently on end game, yet make end game so hard most players can’t do it. I always enjoyed building more then grinding for points to buy better gear in order to be able to grind for a different kind of points, to get different, better gear, and so on and so forth.

    Drives me nuts, I am looking at you WoW.

    #29 3 years ago
  30. Ireland Michael

    @29 “I also dislike games that focus so intently on end game, yet make end game so hard most players can’t do it.”

    Unfortunately, it’s the one thing that works, without going free-to-play.

    People aren’t leaving because MMOs because they’re inherently bad. They’re leaving them because once you reach the end, there is nothing left to do. So what else is the consumer going to do besides cancel their subscription?

    If you have some other magic solution, feel free to share it.

    End game content is the one thing WoW gets rights and every other MMO gets wrong. It’s just such a pity that the game itself has gone down the toilet.

    #30 3 years ago
  31. DSB

    @30 Absolutely.

    It makes sense, though. Anyone can make an MMO with a bunch of mobs to grind. That’s not hard. What’s hard is making encounters that rely on teamwork, coordination and individual ability, that’s really when an MMO goes from a chore to an actual challenge, gameplay wise.

    The biggest mistake Blizzard ever made was making WoW casual above all else. I’m not sure staying the course would’ve kept subs up, but it would’ve kept them from going down as fast. It certainly would’ve kept me going for longer.

    I’m not saying people shouldn’t enjoy casual, there were lots of casual players in WoW too. But there are also lots of casual MMOs out there, and I think that’s because endgame is too difficult for most of those developers.

    #31 3 years ago
  32. OlderGamer

    There is a whole empty world, where once a game stood. In wow.

    The key is expansions, new content. New races, new classes, new lore, new content. And more levels.

    The problem I have with wow at this point is that I am frankley bored. It is a great game, don’t get me wrong. But grinding out my lvl caped toons while waiting 3 years or more inbetween expansions isn’t doing it for me.

    Don’t read too much into my wow comments, I don’t expect more out of the game and fully understand that after so many years(what is it 10years?), any game is going to get old.

    #32 3 years ago
  33. Ireland Michael

    @31 @32 What WoW got right when it was at its best (Burning Crusade) was the balance between casual play and hardcore play.

    It had dailies and five mana for people who just wanted to log in and have fun. It has the five mans for people who wanted to play with friends. It had heroics for those who wanted a challenge (when heroics were actually still a challenge). It had 10 mans for the small guilds, and 25 mans for the hardcore guilds.

    But then, for some stupid reason, Blizzard decided that everyone needed to see everything. And so they did. And having been giving the ability to see everything, they got bored and left. See, for a lot of people it was never actually about the “phat loot”. It was about the simple fact of being able to beat the challenges in front of you.

    Adding half a dozen layers of challenge on top of that (higher difficulties, bigger risks, etc.) doesn’t matter. Because one they’ve beaten the boss, thats enough for them.

    By making everything accessible, they took away the most defining part of the game… a sense of accomplishment. And nothing is more fulfilling than a sense of accomplishment achieved with your friends.

    Now? Now it’s just rushing through the same easy dungeons over and over again with complete strangers every day, so you can get your tokens to cash in for the welfare epics that you never actually deserved in the first place. Suck at the game? Thats okay, just wait until the next patch, and you can have those welfare epics for even less! Everyone is a winner!

    Ugh.

    #33 3 years ago
  34. DSB

    @33 Yeah, I agree. The prestige was good for the ego, but it had little to do with the game, or your friends. The accomplishment is what stayed with you.

    That being said, Burning Crusade certainly had the best looking loot I’ve ever gotten.

    Phoenix fists + full Deathmantle gear. Eventually got the bow too :D

    #34 3 years ago
  35. Ireland Michael

    @38 Ah, yeah. As a hunter main, getting a new bow (any bow) in endgame Burning Crusade was always epic. Nothing ever looked cooler, except maybe Illidan’s weapons.

    They’ve never succeeded in making a hunter armour set that doesn’t completely suck though. *sad face*

    #35 3 years ago
  36. TheBlackHole

    I’m sorry, but Pachter is missing the main point here…

    Subscription MMOs will always be here and always be succesful. The real difference is the genre. Now you have 20m people playing CoD games, and 1.5m paying a sub for ELiTE, and that’s not even paid to play the game!

    #36 3 years ago
  37. TheWulf

    Eh, all I know (and I do know this) is that Guild Wars 2 found another solution. It made the entire game end-game, and allows one to benefit at any level playing any content. If I go back and play level 10 content as a level 80 player, it reduces my power level to that of a level 10 player, but it gives me rewards that are helpful at level 80.

    Sure, this makes levels less important, but that’s how it should be. The only thing (the only thing) that levels are useful for is level-gating content. If you don’t put clear signposts on that then you end up with a clusterfuck like The Secret World. (And there have been complaints about that.) Or you end up with a snorefest like Oblivion and its levelled lists. So there’s really no good way to do things otherwise.

    But if you make it so that all the content can be played at the highest leve without a detriment to anyone, then the entire game is end-game. You just play the content that you like, whenever you want.

    From what I played in the beta (and I played a lot of the beta), it really works.

    So basically I’m with OG. It’s a fair point that making end-game the only fun content in the game and then making the rest of the game a massively uncomfortable and monotonous grind (hey WoW) is not the only way you can do things.

    GW2 proves there are other ways. It proves it on so many levels. It’s easy to stick one’s head in the sand and pretend as though GW2 doesn’t exist (WoW fans do like to do this), but it’s there. And it’s doing it all better.

    I hope GW2 is the new standard, frankly.

    No subscription, no ELEETz-ONLY* end-game, and just a generally enjoyable time for everyone who plays.

    * ELEETz – A group of people whom are able to spend far too much time in a game, doing activities like raiding, to the detriment of their social life, their personal relationships, their friends, their responsibilities, their job, their health, and whatever else they should be taking care of.

    #37 3 years ago
  38. Ihtecribabies

    Fucking ToR crybabies LOL… You’re all a bunch of losers who can’t take the fact that your game is DONE. Shut the fuck up already and deal!!

    #38 3 years ago

Comments are now closed on this article.

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