In my last post, I described - at some length - the various shenanigans surrounding the Star Wars Galaxies revamp. This time, I'm more interested in how the history of SOE:SWG conforms absolutely to the behaviour of a company in crisis, and in what it might mean for other virtual world citizens.
The Pathobiology of Company Failure...
My post-grad uni course was St Andrews University's generalist humanities course in "Management, Economics and Politics". I well remember one of our lecturers describing what I'd call the pathobiology of companies in crisis. Let's 
say that Acme Explosives Co. depends on its Bangalot(TM) product for the bulk of its profits: a problem in itself, but one which they tell themselves and the market is not an issue because of various market conditions: protective patents, recent strong explosives sales in the middle east etc, etc... At this point they believe their own press. they are lying to themselves.
Next, sales start to suffer for some reason. Perhaps tightened safety regimes, a strong new competitor, or product faults. Sales fall, liabilities increase, customers leak, but the board believe they can cover this until things turn around, so long as their sources of capital don't dry up. So they move some debt off-balance-sheet, boost sales and turnover by selling at a loss through various promotions, and generally employ smoke and mirrors to lie to investors and customers.
But things get worse. It becomes impossible to play the shell game with funds and customer numbers. They're not the XBox division of Microsoft, so infinite subsidisation isn't possible. So Acme Explosives decide something must be done. Perhaps they do an Enron, and set up a pyramid borrowing scheme to continue the deceit. Or maybe they hire new tech staff to come up with new products. Perhaps they find a *** buyer and hope the paint job of the last year works long enough for golden parachutes to open.
...As Applied to SWG
This is where the SWG division of SOE are now. They've been through the phase of denial: of singing loudly of success and refusing to acknowledge the litany of problems. As I mentioned, the game could be fun, but it had areas - expensive areas - that needed improvement, mainly based around content and class balance.
And they've been through the second phase - that of dissimulation and artifice - where they issue press statements about continuing strong sales and simultaneous user figures. Impressive figures in themselves, but they ignore the influence of the Star Wars brand in providing an unusually strong newbie hose (a Bartle term, I think, but see page 18 here): the brand draws in large numbers of purchasers who seem to churn in a relatively short amount of time, whereas the profit model of MMORPGs depends on strong subscription retention for 'teh win'. If your churn figures are high you're just filling the pool of potential subscribers with large numbers of "never again" ex-customers. Vocal ex-customers, since hell hath no fury like a fanboi scorned. And the Station Pass SOE offers allows them to mask SWG figures behind those of EQ and EQII.
Botched Reform
So SOE have decided to address the problems. Whether this is because subscriber numbers are actually plummeting, or merely that they have been revealed as incredibly poor in contrast with Blizzard's World of Warcraft (c.4 million subscribers worldwide compared to what I guess are probably about 175,000 (+- 25,000) for SWG: hurry up Sir Bruce) is moot, due to the lack of any honest assessment or discussion of the issues from SOE. They've announced a coup de main, a timescale of a few weeks then a complete game-structure redesign to be rolled out.
Something was needed: the redesign itself contains elements referred to with a startling degree of presience by erstwhile SWG player Khaldun (aka Timothy Burke) in a series of posts on the SOE forums (more - the "seven deadly sins" series of posts - were lost when SOE (understandably, perhaps) wiped the forum that housed their fiercest critics). But some posts survive: one on his own site describing where the game went wrong, and another on the official forums here, where he describes the main plank of the eventual revamp: a "partial character wipe" and consolidation of classes from 34 to 11 (I believe SOE have gone from 34 to 9 [Edit: They have, in fact, gone to 11 as well, with a surprising similarity to Burke's list]).
I assume that the management team were prepared for the raging firestorm of responses. But they act as if they are still a little taken aback.
Half-Hearted Palace Coup
Team members - including primary points of contact with the public - have been fired, after the announcement. This should have been done before the proclamation: every dictator knows that you purge then reform, not vice-versa. The night of the long knives comes first. Panic-mode management has predominated. The user base went understandably berserk over the delay of the announcement until a few days after the billing date for the expansion pack. Cue money-back offer. It was discovered that you needed another expansion pack to even test the new game on the test servers (as a developer myself, I can so see how that happened). Cue sudden announcement of free upgrade for all users. Do these before they are needed, included in the announcement, along with sops such as the second character slot, and the community would have been far easier to mollify. Do it afterwards, in a panic, and the community have a mixed sense of being deceived and toddler-in-a-rage power. Despite being chastised for my cynicism by Abieleno, I maintain that some of these crises were born of attempts at sharp practise, but others are sheer incompetence.
Possible Consequences for Other Worlds
Practical and dramatic consequences will arise out of the success or failure of SOE's "New Game Experience" gamble. I'm not talking, here, about the sort of effects on governance and the normative creation in virtual worlds that I am surprised Terra Nova haven't leapt on already. Rather than any contract between avatar and world-authority, I merely mean the contract between player and code-owner. If this works, other games will feel it is worth the gamble of losing current subscribers to gain eventual market share by substantially rewriting their games.
This is an issue with virtual worlds in a way it is not with other games. If Civilisation IV had been <shudders> an RTS instead of turn-based, I would have been horrified. But I could have gone back to Civ 3, or Call To Power, or Alpha Centauri, and continued playing that. That is not an option where the game "occurs" in distant, centralised servers. A huge investment of time (and sometimes of cash) will be written-off when players find themselves no longer Jedi Masters, but essentially newbie characters. If I have paid through the Sony Exchange marketplace for a new weapon, and Sony change that game the next day in such a way that the weapon is substantially less valuable, do I have any enforceable rights under that game's constitution (the holy End User License Agreement)?
Frankly, I would rather the NGE failed than it succeeded, and thereby opened up the possibility that any online game I have invested my time into could be radically altered by a bunch of chuckleheaded devs who think that because something is neat, it should be done. Oops, did my neutrality slip there?
Fortunately, it won't work. I hugely doubt if the game will collapse dramatically, but I think it rather likely that user figures will dip, then briefly spike, then trail away into Planetside-type insignificance.