Star Wars Galaxies

Fifty-four million dollars.

That's how much the NGE will cost SOE in its three years of existence.

According to Dan Rubenfeld, SWG had 250,000 subscribers when the NGE went live.

Let's assume he was exaggerating and that pre-NGE SWG only had 200,000 saubscribers, each paying $15 per month.

That's an annual subscription revenue of $36 million dollars a year.

Well, we now know that the NGE led to a catastrophic fall in subscriber numbers. Estimates vary but many authoritative industry analysts suggest that subscribers were reduced to between 25,000-50,000.

But, for the sake of this model, let's say that since NGE-Day 2005, SWG retained a consistent subscriber base of a very generous 100,000

OK, let's say each one of those subscribers paid $15 pcm over three years (I am suggesting that subscribers lost by natural wastage were replaced by others by natural accretion). That's means a revenue of $18m a year.

So - if SOE had kept its pre-subscriber levels of 200,000 over three years, it would have earned the SOE/LA partnership $108,000,000

Since subscriber levels fell to $54,000,000, SOE actually lost $54 million dollats.

LET ME REPEAT THIS:

THE NGE COST SOE/LA FIFTY-FOUR MILLION DOLLARS AMERICAN BETWEEN 2005-2008

HERE'S THE NEXT QUESTION:

HOW COME JOHN SMEDLEY AND JULIO TORRES HAVE NOT BEEN HELD TO ACCOUNT BY THEIR RESPECTIVE COMPANIES FOR THIS EXTRAORDINARY LOSS?

I like those figures, makes me happy to think that $OE lost that much  money due to their greed and malpractise. Those numbers though are being very very generous to the NGE subscription levels. So chances are they have lost more money.

Then when you think of the damage done to the $OE brand and reputation the amount of future earnings lost due to this is huge, but obviously can't be verified what that is.

$med survives because he makes out that the NGE was a brave thing to do and was needed, unfortunately it didn't work and they learned from the mistakes of implememnting it wrong. Never actually admitting that it was the biggest blunder in MMO history and a total mistake guided by greed.

Heres hoping that his new bosses read up on this and actually look at the figures instead of accepting his BS.

Originally posted by hubertgrove

Fifty-four million dollars.

That's how much the NGE will cost SOE in its three years of existence.

According to Dan Rubenfeld, SWG had 250,000 subscribers when the NGE went live.

Let's assume he was exaggerating and that pre-NGE SWG only had 200,000 saubscribers, each paying $15 per month.

That's an annual subscription revenue of $36 million dollars a year.

Well, we now know that the NGE led to a catastrophic fall in subscriber numbers. Estimates vary but many authoritative industry analysts suggest that subscribers were reduced to between 25,000-50,000.

But, for the sake of this model, let's say that since NGE-Day 2005, SWG retained a consistent subscriber base of a very generous 100,000

OK, let's say each one of those subscribers paid $15 pcm over three years (I am suggesting that subscribers lost by natural wastage were replaced by others by natural accretion). That's means a revenue of $18m a year.

So - if SOE had kept its pre-subscriber levels of 200,000 over three years, it would have earned the SOE/LA partnership $108,000,000

Since subscriber levels fell to $54,000,000, SOE actually lost $54 million dollats.

LET ME REPEAT THIS:

THE NGE COST SOE/LA FIFTY-FOUR MILLION DOLLARS AMERICAN BETWEEN 2005-2008

HERE'S THE NEXT QUESTION:

HOW COME JOHN SMEDLEY AND JULIO TORRES HAVE NOT BEEN HELD TO ACCOUNT BY THEIR RESPECTIVE COMPANIES FOR THIS EXTRAORDINARY LOSS?

i know this is a game forum, but i applaud your analysis. in the real world of business strategy, this is the correct perspective that competent senior management should take.

however, you need to go one step further and take a look at the margins, not the gross revenue. if the gross margins were 10%, then they lost $5.4 million.

if SWG was not really profitable (say 1%), then they only lost $540 K.

the one thing we don't know for sure is if SWG was unprofitable. if the time spent per subscriber was extremely high because it was so addictive, this would result in high maintenance costs for SOE (servers, bandwidth, debugging, customer services, etc.). what if the new craptastic NGE took SWG from unprofitable per customer to a slight profit per customer?

we don't know what the real situation is.

I remember before the CU there was talk that they needed to keep 100k subs to stay profitable. If that changed after the cu or not I dont know. I do know there maintannence costs went down after the nge thats for sure. Plus I am sure there was a contract change after the nge came out.

As I and a few others on this forum has theorised, this is exactly why they won't rollback. IF they released Classic Servers and the were more successful than the NGE (which c'mon, we know the subs brought in would easily outnumber the NGE numbers), then it would be tangeable proof that the NGE was to blame for the loss in subscriptions. Whoever spearheaded the NGE would be held liable for that revenue. So with your figures taken into account, it would be MUCH cheaper for SOE to simply let SWG festor and die a slow painful death at the hands of the Meatlump King than pay LEC's cut of the $54 million (plus legal fees since you know this would become a costly court battle).

Originally posted by Bob_Blawblaw

As I and a few others on this forum has theorised, this is exactly why they won't rollback. IF they released Classic Servers and the were more successful than the NGE (which c'mon, we know the subs brought in would easily outnumber the NGE numbers), then it would be tangeable proof that the NGE was to blame for the loss in subscriptions. Whoever spearheaded the NGE would be held liable for that revenue. So with your figures taken into account, it would be MUCH cheaper for SOE to simply let SWG festor and die a slow painful death at the hands of the Meatlump King than pay LEC's cut of the $54 million (plus legal fees since you know this would become a costly court battle).

you sir may be onto something.  I haven't thought about it from this angle.  Like you said, if a pre Cu server were made, and the masses came flooding back. That would definitely raise some eyebrows in the company.  Some one with a higher pay grade than mine would say ....Ummm Why haven't we done this all along, better yet who was the Numbskull who pushed this NGE atrocity out the door in the first place. Heads would roll.  you know what they say self preservation is the first rule. Smedley seems to be a Ninja, or he has compromising photos of the boss, with a Sheep.

Originally posted by jonawiki

Originally posted by hubertgrove

Fifty-four million dollars.

That's how much the NGE will cost SOE in its three years of existence.

According to Dan Rubenfeld, SWG had 250,000 subscribers when the NGE went live.

Let's assume he was exaggerating and that pre-NGE SWG only had 200,000 saubscribers, each paying $15 per month.

That's an annual subscription revenue of $36 million dollars a year.

Well, we now know that the NGE led to a catastrophic fall in subscriber numbers. Estimates vary but many authoritative industry analysts suggest that subscribers were reduced to between 25,000-50,000.

But, for the sake of this model, let's say that since NGE-Day 2005, SWG retained a consistent subscriber base of a very generous 100,000

OK, let's say each one of those subscribers paid $15 pcm over three years (I am suggesting that subscribers lost by natural wastage were replaced by others by natural accretion). That's means a revenue of $18m a year.

So - if SOE had kept its pre-subscriber levels of 200,000 over three years, it would have earned the SOE/LA partnership $108,000,000

Since subscriber levels fell to $54,000,000, SOE actually lost $54 million dollats.

LET ME REPEAT THIS:

THE NGE COST SOE/LA FIFTY-FOUR MILLION DOLLARS AMERICAN BETWEEN 2005-2008

HERE'S THE NEXT QUESTION:

HOW COME JOHN SMEDLEY AND JULIO TORRES HAVE NOT BEEN HELD TO ACCOUNT BY THEIR RESPECTIVE COMPANIES FOR THIS EXTRAORDINARY LOSS?

 

i know this is a game forum, but i applaud your analysis. in the real world of business strategy, this is the correct perspective that competent senior management should take.

however, you need to go one step further and take a look at the margins, not the gross revenue. if the gross margins were 10%, then they lost $5.4 million.

if SWG was not really profitable (say 1%), then they only lost $540 K.

the one thing we don't know for sure is if SWG was unprofitable. if the time spent per subscriber was extremely high because it was so addictive, this would result in high maintenance costs for SOE (servers, bandwidth, debugging, customer services, etc.). what if the new craptastic NGE took SWG from unprofitable per customer to a slight profit per customer?

we don't know what the real situation is.

Actually, there are several things we don't know.  Among those were the costs to sustain the pre-cu code base and the churn rate of subscribers heading to WoW.  There very well could have been another set of projections which convincingly posited that the NGE changes would be necessary to the survival of SWG and considerably more profitable in the long run.  Given the fall out, at least one would hope that there existed best and worst case scenarios that fell in line like this and SOE just chose wrong.....

The only things proven were that SOE lost many customers quickly and yet SWG still runs today with some amount of subscribers.  Scoff if you will but Smed and Torres could always say things would have been much worse had they not implemented the NGE, that the departures were inevitable. Of course, by worse I mean shut down already as it's about the only situation that would be "worse". 

One of the things with the NGE is that bandwith usage per character went skyhigh...

So the only reason bandwith costs might not have gone up with the NGE is because they lost so many customers.

THO considering that the servers are so laggy with so few people suggests that net bandwith went up anyway heh.