Darth Hater

Electronic Arts held their Q3 FY12 earnings call this afternoon, and Darth Hater was on the call to pick up the highlights. The launch of Star Wars: The Old Republic was touted as largely successful. Server stability during the launch period exceeded internal expectations, allowing BioWare to push out additional copies that were expected to be held in reserve until Q4.

Key Statistics:

• 2,000,000+ copies sold – 40% sold through Origin
• 1,700,000+ active subscribers – 1 million concurrent
• Average session time was four hours during the first month and a half
• 99.5% Server Uptime

Additional key points from the conference call can be found after the jump.

UPDATE: Exact quotes pulled from the "Prepared Comments" document are now also available after the jump.

Plans For the Future:

As a result of greater than expected earnings in Q3, EA will increase the marketing budget for Star Wars: The Old Republic in Q4. Additionally, BioWare will release a new game update (larger than 1.1) in March. In the coming months, they will discuss an ambitious plan to reach the global market, as well as elaborate on future content updates and expansion content.

Q&A:

Q: When we will start to see the effect of the 1.7 million subscribers? What’s the impact of on-going R&D for providing the new content?
A: It's still very early. It is hard to extrapolate where those 1.7 million subscribers lead or mean, but it’s a great start. We have huge plans. Lots of end-game content and even expansion packs. It will involve R&D post launch and we took care of some of it pre-launch. It’s a little early to identify what those all will specifically be and what our goals will be. as mentioned, we will be increasing marketing support.

Q: Are these 1.7 subscribers paying?
A: Active subscribers means anyone paying or in their trial period. Most of those 1.7m are paying at this point

Q: How is TOR contributing to these earnings? This year vs next?
A: We don’t generally break out profitability on individual titles. In terms of TOR, we need to know more about the trajectory of the business before giving more guidance. The lion's share of revenue is in the subscriptions. It was only 4 months this year and 12 months next year. This should be more positive in FY13.

Q: What are your plans at expanding the global market?
A: We are looking at the Asian market. Expanding into Australian market on March 1st. We’re looking specifically at opportunities to expand in the Asian market.

Q: How long will it take to get into the Asian market?
A: Australia/New Zealand is the low-hanging fruit. Think in months rather than weeks. Individual Asian markets will be announced in the future, we’re bound by confidentiality agreements. When WoW was introduced in 2004, they were in Korea shortly after, and 9 months after in China. It was easier in those days – server outages were considered par for the course, that is not the case today. We hope to execute as well in Asia as we did in the NA/Europe launch.

Q: You've previously said you need about a half million subscribers to be profitable, is that still the case?
A: At 500,000 subscribers, we'd break even. At a million, we'd be making a profit but nothing worth writing home about. As it scales up from there, we're talking about a nice profit. At this point with the successful launch, we can take the worst case scenarios off the table.

Prepared Comments

John Riccitiello

At the end of the quarter we launched Star Wars: The Old Republic recording strong initial results with this very important digital service. Two million people have purchased the game – from our retail partners and via direct digital downloads on our Origin system. This great launch makes Star Wars: The Old Republic the fastest growing subscription MMO in history. We’re incredibly pleased to see this great game from BioWare off to a very strong start. Both Frank and Eric will share further details in their prepared comments.

First, retail demand for Star Wars: The Old Republic was strong and we shipped units right at the end of December that we anticipated shipping in early January

Eric Brown

Our Star Wars launch was more successful than we anticipated. During the course of December, server performance and stability exceeded our expectations, allowing us to make more product available to our consumers at launch and through the end of the December quarter. To date, we have sold through more than 2 million units. Our sell through success to date is not as apparent to the public because nearly 40% of the December sell through went through Origin, which is not recorded by third party data services. This was achieved with a level of Q3 marketing well below that of a AAA holiday quarter launch.

We previously envisioned having a more limited Star Wars launch through December. However, during the critical launch period, the servers stood up to the challenge, and were able to withstand the heavy utilization – as we announced in our December 26 th momentum release. This gave us the confidence to make additional product available to our consumers, more than we had initially planned, and a portion of expected Q4 sales were realized in Q3

Frank Gibeau

Our third global blockbuster in the quarter was Star Wars: The Old Republic. You’ve heard all the superlatives, the only thing I can add is BioWare/Austin has delivered a game that millions of people are going to be playing for a very long time.

Let me offer some metrics on purchase and subscription that will help you understand this business. As John stated, we have sold through two million units of the game since December. We currently have a little over 1.7 million active subscribers. The rest have either not started playing yet or have opted out.

This is an outstanding start for an MMO and the metrics on engagement suggests players are loving this game: unique log-ins are averaging about one million per day and their average play time is approximately four hours per day.

And throughout the launch, server performance and stability exceeded our expectations, allowing us to accelerate the introduction of new players in December.

Outside of scheduled maintenance, our servers have been up and running at 99.5 percent of the time – which is a big win in and of itself. Every major MMO launch has had significant service issues—until now. Star Wars: The Old Republic broke that cycle, leading PC Gamer to write: “BioWare hit a big homerun with server stability.”

I want to take a second to correct the reports which speculated that a lack of congestion was a sign of slow participation. Shortly after launch, we doubled the efficiency of each server, allowing us to handle twice as many players and remove the waiting lines. The lack of congestion is a function of great engineering.

In the next phase, our goal is to grow the number of subscribers with frequent releases of content that make the game even more exciting. With this in mind, BioWare has just released an extensive game update that provided additional, higher level group missions and new game features to keep players engaged. We plan on delivering another major update, even larger than the first, in March.

In summary: we nailed the launch. Adoption and daily usage among core MMO users are trending very favorably. More people are buying the game and subscribing. More content is on the way.

Going forward, we have an ambitious plan to reach the broader market – the millions of Star Wars fans all over the world. You’ll be seeing that very soon.