Even A Jedi Can't Keep EA Stock Above $21 On Gaming Battlefield

Electronic Arts wants to leave no stone unturned in the promotion of its biggest 2011 release, Star Wars: The Old Republic (SWTOR).

SWTOR

The company gave early access on December 13 to its upcoming massively multiplayer online (MMO) game, giving customers that pre-ordered the opportunity to play the game, one week before its scheduled launch.

SWTOR was a highly anticipated MMO, which will put EA directly in competition with its arch rival Activision Blizzard’s World of Warcraft (Wow). We believe the move will not just help EA in managing server volumes thereby helping to ensure a smooth day-one experience, but also an ideal marketing platform if the game strikes a positive chord with early gamers.

Trefis’ EA price estimate stands at $20.62, which is in line with its current market price.

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Star Wars vs. World of Warcraft

Star Wars: The Old Republic marks EA’s first big aim into MMORPG space, an area heavily dominated by Blizzard with its World of Warcraft franchise. SWTOR holds immense importance to EA. The fact that the game development alone ran EA $135 million makes it the costliest game to date.

The pre-sales reception of SWTOR has been phenomenal, with the game sweeping many prestigious video-gaming awards till date. Additionally, SWTOR has managed to generate a frenzy amongst MMORPG gamers with pre-sales numbers already nearing 1 million. 

The SWTOR hype has also helped in a big way to boost EA’s stock during 2011, with EA outperforming most of its peers on the stock market in 2011. Gaming critics along with investors are giving SWTOR an early push, banking on the notion that WoW is long in the tooth and vulnerable to losing gamers to more advanced MMOs like SWTOR.

Supplanting the incumbent Warcraft will not be easy for EA. Blizzard is considered to be a pioneer of MMORPG gaming and considering the clout of WoW in MMORPGs and its huge loyal customer base, WoW can give SWTOR a run for its money.

Another important factor to consider is the importance of WoW for Activision Blizzard. World of Warcraft is a money minting machine for Activision Blizzard. Look for Blizzard to come out with some enhancement to WoW in order to protect its most important game from the increasing threat of SWTOR.

Early game access of SWTOR, What can be the implications?

With the announcement of early game access of SWTOR to players on SonyPlaystation and Microsoft Xbox users, we believe EA is targeting two major objectives. First, EA wants to ensure that the mega launch of SWTOR on December 20th should be glitch free. The company wants to remove server volume management problems, if there are any alongside removing any other technical bugs that may come in the game play.

Second and equally important, the company wants to promote SWTOR through word of mouth marketing. MMORPG gamers are always characterized by their involvement in gaming community forums, and a satisfied bunch of pre-order gamers can greatly help EA in pulling additional customers towards SWTOR. However, the move may backfire if the gamers fail to strike a note with SWTOR.

EA has already experienced this scenario in Battlefield 3, when its beta version drew sharp criticism from gamers, which ultimately impacted the sales ofBattlefield 3. But we believe the risk is worth taking, considering the importance SWTOR holds for EA and the scale of money and effort that EA has put into it.

Via: Forbes