By Alex Pham
5:22 PM EDT, July 31, 2012
Online games, it seems, just want to be free.
Electronic Arts on Tuesday announced that it will offer up substantial portions of its "Star Wars: The Old Republic" multi-player online game to players for free starting this fall. A premium version with unlimited access to all levels, plus any new content, will still be available for $14.99 a month.
The move by the Redwood City, Calif., game publisher is an acknowledgment that the current economic climate makes it virtually impossible for a subscription business model to thrive on the Web, where thousands of free games now compete aggressively for attention.
"Players want flexibility and choice," Matthew Bromberg, general manager of BioWare Austin, one of several studios that developed the game, said in a statement. "The subscription-only model presented a major barrier for a lot of people who wanted to become part of the 'Old Republic' universe."
In July, EA cracked open the game's first 15 levels for free in hopes that would bring in more players.
Other companies have made similar moves. Sony Online Entertainment, which operates "EverQuest 2," "DC Universe Online" and many other online games, has gradually made its entire catalog of titles free to play over the last year, choosing instead to make money by selling virtual items for use in the games.
Only Activision Blizzard's "World of Warcraft" has been able to maintain its ability to charge players a monthly fee to play, although that title has seen its subscriber base shrink to just above 10 million this year from a peak of 12 million in 2010.
EA also announced first-quarter sales fell 4% to $955 million, down from $999 million a year earlier. Net income was $201 million for the quarter ended June 30, down 9% from $221 million last year. To bolster its stock price, the company said it plans to buy back $500 million of its own shares in the coming weeks.
EA's shares, which lost 21 cents to close at $11.02, bounced back in after-hours trading, gaining 27 cents to $11.29 immediately following the earnings report. Its 52-week high was $25.20 on Nov. 4.
With a development and marketing budget of more than $150 million, “Star Wars: The Old Republic” was EA’s costliest game to produce. The decision to throw the title open to free players is not expected to alter EA’s financial performance this year because all of that cost has already been accounted for in previous quarters.
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