EA lowers MMO expectations
EA’s CEO John Riccitiello said:
500,000 subscribers will be substantially profitable, but it’s not the sort of thing we would write home about… Anything north of one million subscribers is a very profitable business. Essentially it turns on a dime from being quite sharply negative in terms of its EPS impact to positive the day the product ships.
500k subs is low even compared to Warhammer, which had over 1M presales, let alone users. The real problem is that after the initial free month, most new MMOs implode leaving both players and publishers with a bitter taste.
So what’s John up to? Two things: 1) manage investor expectations who hope every new MMO is the mythical WoW-killer; and 2) inflate stock price when 500,000 sales are surpassed (almost certain it will sell more than that). What happens 6 months post-launch is left to EA’s next CEO.
Update: Sure enough, the stock was up 16% today!