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Rumor: EA putting itself up for sale

Justin Olivetti — Fri, 17 Aug 2012 16:00:00 EST

Filed under: MMO Industry, Legal, Miscellaneous

Electronic Arts, long known for assimilating numerous studios under its label, may be putting itself up for sale in return. The New York Post reports that EA is looking into such a deal with various interested firms, such as KKR and Providence Equity Partners.

One of the Post's sources said that EA would be willing to sell to such a firm at $20 a share, even though the company's share value is currently just north of $13. Its stock fell from $25.20 nine months ago, although industry analyst Michael Pachter predicts that EA's stock should double within a year.

EA isn't the only company looking to shore up its future, as the videogame market is slumping worldwide since last year. One bright spot is its digital sales, which are up over 2011's numbers and resulted in a $324 million revenue in the first quarter of 2012.

EA refused to comment on the rumor, as did KKR and Providence Equity.

Rumor: EA putting itself up for sale originally appeared on Massively on Fri, 17 Aug 2012 16:00:00 EST. Please see our terms for use of feeds.

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Investment group predicts positive returns for Star Wars: The Old Republic following free-to-play announcement

Eliot Lefebvre — Wed, 01 Aug 2012 19:30:00 EST

Filed under: Sci-Fi, Business Models, MMO Industry, News Items, Free-to-Play, Star Wars: The Old Republic

Yesterday's bombshell from Star Wars: The Old Republic has prompted the usual spirited debate among fans over the game: Is this a last gasp before it dies or a smart move in the current MMO marketplace? Wedbush Securities believes it's the latter, with analyst Michael Pachter stating that the news from Electronic Arts is positive and that the change in business models should result in a significant profit for the game.

Pachter described Wedbush's reaction as "incorrigibly positive," with specific emphasis on EA's digital catalogue and the free-to-play shift for Star Wars: The Old Republic. According to his analysis, the change in business models will remove the most significant hurdles from potential players, leading to a net increase in revenue from the game. The market as a whole responded positively to the financial news, with EA's stock rising six percent as a result of the call. Pachter has previously been critical of the MMO market, having claimed in early July that subscriber numbers have peaked for the industry as a whole.

Investment group predicts positive returns for Star Wars: The Old Republic following free-to-play announcement originally appeared on Massively on Wed, 01 Aug 2012 19:30:00 EST. Please see our terms for use of feeds.

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MMO subscriber numbers have peaked, says industry analyst

Justin Olivetti — Tue, 10 Jul 2012 15:30:00 EST

Filed under: Business Models, MMO Industry, Star Wars: The Old Republic, Miscellaneous

Whether you love him, hate him, respect him, or ignore him, when Michael Pachter speaks, his voice carries. So it's of note that everyone's favorite videogame analyst is back with a few more controversial remarks concerning the growth -- or lack of it -- in the MMO market.

Speaking at the Evolve Conference, Pachter said, "It looks to me as though the MMO market is as big as it's ever going to be -- as far as subscription MMOs. People willing to play $15 a month, there are six or seven million of them. Period. If Star Wars couldn't expand it, when it's made by BioWare, nothing can do it. That's why Curt Schilling's 38 Studios went out of business, because he couldn't get financing."

In May, Pachter proclaimed that nobody was buying MMOs after Star Wars: The Old Republic's launch.

MMO subscriber numbers have peaked, says industry analyst originally appeared on Massively on Tue, 10 Jul 2012 15:30:00 EST. Please see our terms for use of feeds.

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Analyst says no one is buying MMOs after SWTOR fizzled

Jef Reahard — Wed, 23 May 2012 11:45:00 EST

Filed under: Sci-Fi, Business Models, Economy, MMO Industry, News Items, Star Wars: The Old Republic

Wedbush Securities analyst Michael Pachter has a dim view of MMO assets following the lukewarm performance of Star Wars: The Old Republic. "Nobody is buying MMOs after Star Wars fizzled," Pachter told Joystiq. The context surrounding the statement involves the valuation of 38 Studios in the wake of its Copernicus melt-down.

"There is just no demand for game assets right now, as THQ proved when it tried to sell the Warhammer MMO. I think [Electronic Arts] could step in, since they are the publisher, so you might see some alternative way to get 38 some bridge financing," Pachter said.

Analyst says no one is buying MMOs after SWTOR fizzled originally appeared on Massively on Wed, 23 May 2012 11:45:00 EST. Please see our terms for use of feeds.

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Analyst: SWTOR caused Dragon Age III delay

Justin Olivetti — Tue, 08 May 2012 15:30:00 EST

Filed under: Sci-Fi, MMO Industry, Star Wars: The Old Republic

There's been a lot of discussion following the recent EA earnings report in which the company announced that Star Wars: The Old Republic has 1.3 million subscribers, down from its previous 1.7 million mark. We've heard from the fans, the critics, and the studio itself -- now it's time for the analysts to contribute their side of the conversation. According to Wedbush Securities analyst Michael Pachter, EA's investment in SWTOR has caused a delay in other projects at BioWare, particularly in Dragon Age III's case.

The analyst noted that Dragon Age III's expected release window was delayed, and he says this is due to the enormous undertaking of SWTOR. "We believe that a significant portion of the BioWare team responsible for the game was reassigned to Star Wars in order to create content and fix bugs to keep the game's audience engaged," Pachter said.

Delay or no, Pachter is upbeat about EA's future, especially in light of the earnings report's news that the company turned a profit. He says that the company will continue to grow, make money, and be a good bet for investors.

Analyst: SWTOR caused Dragon Age III delay originally appeared on Massively on Tue, 08 May 2012 15:30:00 EST. Please see our terms for use of feeds.

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Pachter says rumored Nexon buyout of EA 'cannot happen'

Jef Reahard — Thu, 26 Apr 2012 14:00:00 EST

Filed under: Business Models, Economy, MMO Industry, News Items, Rumors, Miscellaneous

Forbes reported on a rumored takeover of Electronic Arts by Nexon earlier this morning. The magazine noted that EA shares spiked following a supposed bid by the Korean gaming giant.

Wedbush Securities analyst Michael Pachter weighed in on the rumors at GamesIndustry.biz, saying that the deal "cannot happen." He guesstimates that EA will balk at any such deal because "Nexon couldn't pull off a stock-for-stock deal [...] and would have difficulty financing an all-cash deal to make EA shareholders happy."

Pachter floats a few numbers in his analysis, and he also notes that EA CEO John Riccitiello isn't likely to cede control of the company to anyone outside of EA management.

Pachter says rumored Nexon buyout of EA 'cannot happen' originally appeared on Massively on Thu, 26 Apr 2012 14:00:00 EST. Please see our terms for use of feeds.

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'Little risk of failure': Analysts predict SWTOR will turn a healthy profit

Justin Olivetti — Thu, 01 Dec 2011 10:30:00 EST

Filed under: Sci-Fi, MMO Industry, Star Wars: The Old Republic

Worried that Bobby Kotick has the right of things and that Star Wars: The Old Republic won't make bank for Electronic Arts? Market analyst Michael Pachter disagrees, saying that he not only predicts that EA will cover the costs of SWTOR's development, but come out just fine even with LucasArts taking its share.

Pachter says that LucasArts will claim 35% of SWTOR's revenue: "The revenue split is around 35 percent to LucasArts after EA earns back their investment. That means EA keeps most of the revenue from disc sales (they have marketing expenses and need to staff up the server farms), so they should earn a nice profit there. Keep in mind that EA expensed the development cost when incurred, so much of the disc sales revenue will be profit."

Pachter's predictions for the title are sizable yet reasonable; he thinks that SWTOR will get 1.5 million subscribers. This translates to $270 million per year in revenue, $80 million of which will be pure profit for EA after LucasArts and operating costs take their share. Even if SWTOR only draws in -- or sustains -- merely 500,000 subscribers, Pachter says the game will be sitting pretty.

Other market analysts, such as EEDAR VP Jesse Divnich, support the notion of SWTOR's profitability. "Based upon user commentary and consumer surveys, the profit potential for The Old Republic is high. We see little risk of failure for The Old Republic," Divnich stated.

'Little risk of failure': Analysts predict SWTOR will turn a healthy profit originally appeared on Massively on Thu, 01 Dec 2011 10:30:00 EST. Please see our terms for use of feeds.

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World of Warcraft will reign for another 20 years according to industry analysts

Justin Olivetti — Thu, 09 Dec 2010 13:00:00 EST

Filed under: World of Warcraft, Fantasy, MMO Industry

With all of the recent focus on World of Warcraft following its latest expansion, it's no surprise that the industry leader is at the center of another round of "What will topple WoW?" discussions.

In an article on Eurogamer, industry analysts and developers lend their thoughts as to what made World of Warcraft so dang popular to begin with, and what it will take -- if anything -- for another game to beat its popularity, subscription numbers and cultural footprint. Wedbush Morgan analyst Michael Pachter declared that nothing will top the title for at least 20 years due to an insurmountable lead, although this became debated by the other participants.

Cryptic's Jack Emmert thinks WoW will be "chipped away at" instead of toppled. Age of Conan's Craig Morrison thinks that nobody can consciously plan to overcome WoW's lead saying, "You don't topple a cultural phenomenon. But you can join one." GamersFirst's Bjorn Book-Larsson doesn't think there's a need for WoW to be toppled due to the size of the market.

Codemasters' Dave Solari imagines that the winning formula "would have mass market appeal, with instant accessibility, would work on all platforms, particularly mobile, be incredibly viral and social -- like a feature-rich FarmVille." Undead Labs' Jeff Strain thinks that MMO studios should be looking at it a different way: "They should instead be striving to achieve the same level of success with their own game ideas."

Some even speculate that Blizzard is the only studio capable of besting its own game, perhaps with its second MMO that's due to be announced in 2012. Head on over to Eurogamer for the full discussion.

World of Warcraft will reign for another 20 years according to industry analysts originally appeared on Massively on Thu, 09 Dec 2010 13:00:00 EST. Please see our terms for use of feeds.

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Analysts praise free-to-play MMOs, casually insult MMO players

Michael Zenke — Mon, 02 Feb 2009 11:00:00 EST

Filed under: Business Models

A thoughtful Reuters piece explores a concept that MMO players have themselves been talking about since the economy began to take a downturn. Free to play MMOs, which have been gaining in popularity in the US for years, may be one of the biggest winners of this depressed financial situation. The article explores the benefits and increasingly high quality of online titles that don't require a subscription fee. While South Korea and other Asian countries have long enjoyed a strong connection with inexpensive social online gaming, that message is only just reaching saturation here in the states.

What's troubling to this blogger is that amid this very common-sense analysis, one of the most well-known commentators on videogaming sees fit to take a cheap swipe at a cross-section of gamers. Said Michael Pachter, an analyst at Wedbush Morgan: "I don't think (online multiplayer games) get impacted at all, because people who play them are addicts ... Losing their jobs makes them more likely to play because they have more time to play." It's frustrating that one of the few business analysts out there in the business world that understands gaming could be so dismissive of the online gaming genre. We'd like to suggest he do a bit more research in the future on this subject before making snappy statements like that.

Analysts praise free-to-play MMOs, casually insult MMO players originally appeared on Massively on Mon, 02 Feb 2009 11:00:00 EST. Please see our terms for use of feeds.

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