"Harry Potter" game was going to bring in $120 million, $41 million profits

The fact that Electronic Arts today officially delayed its "Harry Potter and the Half Blood Prince" game from November to next summer is of course not news at all, since anyone who did just a bit of reporting and had a smidge of common sense would have known that was happening the moment Warner Bros. delayed the movie last month (as I wrote at the time).

What is interesting, however, is that the delay has forced EA, in an SEC filing, to disclose exactly what kind of revenue and profit it expected from the game. And it's impressive: $120 million in revenue and a profit of 13 cents per share, which, based on a simple calculation, looks like it would be about $41 million. While it's tough to say how many units $120 million equals, given the varying prices for different SKUs and the various players (retailers, console makers, licensor Warner Bros.) who get a cut, but suffice it to say, that's many millions. Plus a very healthy profit margin of around one-third of revenues, which is very impressive and indicates that the game doesn't cost that much to make (perhaps not a surprise for a licensed sequel).

EA will of course be fine, with the same revenue and profits just pushed back to its next fiscal year. But it's pretty impressive that this one game represents about 2.5% of this mega-publisher's expected revenue and a much more hefty 10% of profits (both on a non-GAAP basis, for the accountants out there).

Goes to show that despite all the talk about the importance of original IP, a license based on a hit property with broad appeal around the world and in all demo's can be extremely valuable to a videogame publisher.

On a related note, Reuters' assertion that the delay is the reason for a 3% drop in EA stock today seems highly dubious. Anyone who trades EA shares and didn't immediately assume the the movie's delay last month meant the same thing for the game would have to be a total fool.