By Liana B. Baker and Malathi Nayak
LOS ANGELES, June 4 Electronic Arts Inc
plans to offer a big part of its "Star Wars: The Old Republic"
online game for free and licensed the rights to produce
videogames with the "Ultimate Fighting Championship" brand,
hoping to breathe life into efforts to secure steady long-term
EA announced the licensing agreement with Zuffa LLC on
Monday. The licensing rights were previously held by THQ Inc
, which received an undisclosed cash payment, Zuffa and
EA has struggled to get "Star Wars: The Old Republic", the
massively multiplayer role-playing game based on George Lucas'
science-fiction movie, off the ground since its December launch.
The company announced last month it had lost 400,000
subscribers in its fiscal fourth quarter.
Video game companies have been trying to turn gamers from
one-time purchasers into subscribers who generate a steady and
predictable revenue stream.
From July, EA will offer 15 "levels" for free, meaning
gamers will be able to join and play the beginning phases of the
game without paying. That might be the jumpstart the game needs,
"Part of it is just trying to be promotional, trying to keep
the game alive," said Sterne Agee analyst Arvind Bhatia. "We've
got a little bit north of a million subscribers on average for
the year, and if it goes down too much it increases the risk of
the game going away.
"It's a little bit desperate but it's showing us where the
industry is going: people are not ready to pay."
On Monday, EA also announced a $50-a-year premium service
for "Battlefield 3", the first-person shooter game that competes
with Activision Blizzard Inc's popular "Call of Duty"
More than 15 million copies of "Battlefield 3" have been
sold. Bhatia said EA might be hoping a portion of those players
sign up for the premium service, which offers five new expansion
packs or additional content.
THE STAKES WITH STAR WARS
EA shed 36 percent of its value in 2012, hurt by worries
about its ability to deliver growth and compete with Activision.
The acquisition of the "Ultimate Fighting Championship"
license will also bring on board a signigicant slice of annual
revenue. Analysts estimate the UFC games generated about $100
million in revenue for THQ.
EA has spent more money on "Star Wars" -- some analysts
estimate $100 million to $300 million -- than any other game in
Wall Street is watching to see if the game can succeed and
bring EA steady subscription-based revenues for years to come.
EA had been hoping to take on its biggest rival, Activision,
which had more than 10 million subscribers to "World of
Warcraft" last quarter.
"Warcraft" is the 7-year-old Internet game that re-energized
the market and is Activision's most profitable franchise. It
only recently opened up its starting levels to gamers for free.