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

Scarcity hasnt 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, arent 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 isnt
explicitly true. As of now, Electronic Arts and the games 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 theyre gone, theyre 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 publishers 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 isnt 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 its hoping to
capture will be given incentive to purchase as soon as possible. That EA isnt
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. Its
likely EA has the space open for that many players, but by leading the public to
believe it doesnt, 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