EA Banks on Scarcity to Drive Sales of New Star Wars Game

Limited release also could limit typical MMORPG startup problems

   

Electronic arts sign Flickr 630 300x200 EA Banks on Scarcity to Drive Sales of New Star Wars GameScarcity hasn’t been a tool for driving video game demand in 20 years or more. High-profile video game consoles have seen supply problems that have whipped consumers into a frenzy. Nintendo‘s (PINK:NTDOY) inability to produce enough Wii gaming machines kept consumers rabid for the device from 2007 until 2010, but even then the actual games for the device were easy to find and plentiful.

The most popular gaming devices of the past 12 months, namely Apple‘s (NASDAQ:AAPL) iPad and iPhone, have kept consumers lined up around city blocks for weeks trying to get a hold of these coveted devices near their respective release dates. The apps and games for those devices, though, aren’t even available as physical retail products, so scarcity is never a question. So it is with some curiosity that investors should observe Electronic Arts‘ (NASDAQ:ERTS) new massively multiplayer online role-playing game Star Wars: The Old Republic – It might just be the first game to be marketed as a limited item.

That isn’t explicitly true. As of now, Electronic Arts and the game’s developer, BioWare, have said only a limited number of copies, both digital and boxed retail, of The Old Republic will be available when the game is released later this year. If the allotted games are sold as pre-orders before its release, so be it. An EA representative said to website Gamasutra, “Once they’re gone, they’re gone.”

The stated reason for the restricted distribution is reasonable. The release of major online role-playing games like Activision Blizzard‘s (NASDAQ:ATVI) World of Warcraft, as well as Sony (NYSE:SNE) and Time Warner‘s (NYSE:TWX) DC Universe Online are almost always hampered by technical hiccups that are impossible to address before the game is available to the average consumer. Crashed servers on the game publisher’s end blocking access or even something as simple as long wait times for logging in are common occurrences when a major online game is released and millions of players around the world are trying to access it simultaneously. By selling an unspecified but set number of copies of the game at release, EA is promising that players will have a “smooth and high-quality game experience and service at launch.”

What EA isn’t publicly discussing, though, is how limiting access to their new Star Wars game will automatically drive interest in the game. The pre-order promotion for the game already is based around giving players a VIP experience. Those who order a copy of the game ahead of time will be able to log into the game when it opens in the order that the pre-orders were placed. It is a literal first-come, first-served strategy.

Now that the company is saying there is limited space in total, the intended audience of Star Wars fans and Warcraft subscribers it’s hoping to capture will be given incentive to purchase as soon as possible. That EA isn’t openly stating how many copies it has limited itself to makes the plan feel even more like a marketing plan as well as product quality concern.

Wedbush Morgan analyst Michael Pachter said in May that he believes EA only needs between 350,000 and 500,000 subscribers to The Old Republic to see a return on in its investment of around $80 million in development. Cowen & Company anlyst Doug Creutz projects that EA will net itself 2 million subscribers this year. It’s likely EA has the space open for that many players, but by leading the public to believe it doesn’t, it might find even greater success during the fourth quarter of 2011.

As of this writing, Anthony John Agnello did not own a position in any of the stocks named here. Follow him on Twitter at @ajohnagnello and become a fan of InvestorPlace on Facebook.


Article printed from InvestorPlace Media, http://investorplace.com/2011/08/ea-banks-on-scarcity-to-drive-sales-of-new-star-wars-game/.

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