What to make of EA?

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Robotnik1
Posts: 15
Joined: December 31st, 1969, 7:00 pm

What to make of EA?

Postby Robotnik1 » May 8th, 2012, 5:35 pm

http://gamasutra.com/view/news/169949/EA_shares_lowest_since_99__is_it_now_a_takeover_target.php

Shares opened Tuesday at $14.25, a level the company hasn't seen since July 1999. In the past five years, EA shares have lost nearly 70 percent of their value.

But EA is a company that has failed to deliver for its shareholders again and again. Analysts are still acting as apologists for it, but even they are showing signs of frustration. With a few key stumbles and another major hit to the stock, EA could find itself fighting to remain in charge of its own destiny.


Read the article, if you like. Speculation about EA being bought out. Speculation on the famous EA 'transition' to mobile games and if that will continue to grow, and when will it offset its continuing retail decline and franchise bungling?

I have never seen a major publisher/game maker with such a poor track record that keeps getting propped up by the game media and analyst on how smart they are. When will EA bottom out? Is EA doing things right, or are they just slowly falling apart until some huge foreign investor buys them on the cheap for their brands?

EA, how far have you fallen. Another example of a western flop of a gaming company, and the gas bag of console gaming being ripped asunder by those who should be pumping it up.

Suplexmachine1
Posts: 88
Joined: December 31st, 1969, 7:00 pm

What to make of EA?

Postby Suplexmachine1 » May 8th, 2012, 7:35 pm

It's amazing to me that a company like EA, who makes money hand over fist with titles like Madden, is doing so poorly.

I boycotted EA from 1996 until 2008, when they started actually releasing new IP's like Mirror's Edge and Dead Space.

Pacman0001
Posts: 263
Joined: December 31st, 1969, 7:00 pm

What to make of EA?

Postby Pacman0001 » May 8th, 2012, 8:07 pm

Their low stock price is simple to explain.  They treat their customers poorly; their customers return the favor, and their stock price responds.  I don't know why the analysts think they're  good.  Perhaps the analysts see that EA is taking advantage of new trends and assume that's a good thing.  Very well.  The analysts got FMV games wrong; they can get this wrong too.

(Note: I have nothing against EA.  Any time a game company hurts it's sad.  Even Active Enterprise's story is sad.)

Atarifever1
Posts: 3892
Joined: December 31st, 1969, 7:00 pm

What to make of EA?

Postby Atarifever1 » May 8th, 2012, 9:20 pm

[QUOTE=Robotnik]http://gamasutra.com/view/news/169949/EA_shares_lowest_since_99__is_it_now_a_takeover_target.php

Read the article, if you like. Speculation about EA being bought out. Speculation on the famous EA 'transition' to mobile games and if that will continue to grow, and when will it offset its continuing retail decline and franchise bungling?

[/QUOTE]
Man steer, any news about mobile seems to be bad news according to you.  The article points out that the "famous" transition to digital is one of their few bright spots, with large revenues.  It includes "mobile" in with digital, as it only even says "mobile" once or twice, and uses that interchangeably with "digital."  There's no speculation on that point or on the point of if it will continue to grow, which is the third example I have seen of you mis-stating what is in an article in about three days. 

[QUOTE= "The article in question]
Meanwhile, the publishing side of the business -- the bread and butter for any traditional game company -- continues to be battered by sluggish retail sales.

There are some advantages, though. EA has bet heavily on digital distribution and has expanded its focus into other areas, such as mobile, that are starting to show payoffs. The numbers speak for themselves: In the first fiscal quarter of 2011, EA recorded digital revenue of $209 million. In the second quarter, that jumped to $216 million, then $377 million in the third quarter. And it wrapped up the year with $425 million in digital revenue.

That speaks well for Origin, which (with 11 million registered subscribers) is still dwarfed by Steam, but still produces a healthy income (generating $150 million in 10 months).

Also, while EA could be pointed at as one of the reasons mobile and social developers are being paid astronomical amounts of cash in today's buyouts, it has finally realized the ridiculousness of those valuations and isn't likely to be jumping into the fray again soon.

"We don't need to buy a brand just to get a temporary lead on top of the charts for whatever is hot this quarter," said CEO John Riccitiello on yesterday's earnings call. "That doesn't mean that we would never buy or never invest. We would. But right now, what I'm starting to see is valuation expectations that assume that these things are all hockey stick moving up into the right with no end in sight, and I think those are bad assumptions."

So there are definite pros and cons to the company. The question is: Does this make it an attractive target for potential buyers?
[/QUOTE] 

That is not speculation it won't continue to grow.  That's saying it is one of their main bright points and they have, thankfully, stopped buying stuff that was over-valued as well.  Where you got "speculation over if it can continue to grow" would be beyond me, were you not in the habit of doing this sort of thing all the time.

I find it especially funny because there is a link embedded in that story early on that leads to a further story that says:

[QUOTE= "Story Steer didn't link"]Looking at the full fiscal year, numerous games and services contributed to EA's overall growth in the digital sector, but EA's FIFA 12 in particular was a major contributor, as game downloads and microtransactions brought in more than $108 million during the fiscal year. In addition, EA's all-digital FIFA Ultimate Team service was the second best-selling EA product in the UK during this period.

In addition, the publisher noted that full game downloads increased 76 percent year over year during the fourth quarter, as players were able to download major titles like Mass Effect 3 and Star Wars: The Old Republic. In all, EA's downloadable games brought in $60 million in the fiscal fourth quarter.

EA's Play4Free titles, like Battlefield Heroes and Need for Speed World, have also performed quite well, and the Play4Free brand currently generates more than $2 million in revenue per week. EA's recently launched Origin platform has also seen some healthy success, as it has pulled in $150 million in the 10 months since its launch.[/QUOTE]

It must really burn you that the "pond for scum to grow on" free to play games generate $2 million a week.  Though you probably read that as "Free to play pond scum from EA couldn't break $3 million a week.  Analysts assume this means free to play as good as dead." 

The best part of all though is that what little "speculation" there is in the article is the website's attempt to make a buyout look likely after a bunch of stories were run about EA being bought, that were in fact really, really stupid.  This was all started (the other hyperlink brings you to this information) because of a three's company level whacky misunderstanding. 

[QUOTE= "jumping the gun"]Seoul-based online game publisher Nexon is not looking to buy out Electronic Arts, as recently rumored, but rather the two companies have been discussing the distribution of FIFA Online in Asia, according to media sources.[/QUOTE]

So this is another look at some small amount of speculation based on the dumbest possible misunderstanding.  EA (a giant game publisher, distributor, and developer) is in talks to expand their business in another market by distributing ONE online soccer game through someone else in that one market.  Somehow that becomes "EA for sale."  This is the kind of "wishful story fulfillment" only the games industry can provide.  Imagine if Pepsi were in talks with Sobey's Canada to sell one new flavour of Pepsi, manufactured in the Province of Newfoundland and Labrador.  And imagine the story that turned into was "Atlantic Canadian grocery store chain in talks to acquire entire Pepsi company."  Then, once it was shown to be wrong there was still an article about how Pepsi could still end up being sold anyway.  Yeah, it could be.  But nothing about that other story made it worth writing the new one.
 

Sp what you have linked to is a weak follow-up fluff piece to a dumb misunderstanding.  I find it particularly interesting that the authour of this piece of fluff links to a story called "EA sees record year after digital push" with the text "outlook is tepid."  That is making something from nothing if ever I saw it.  (God I love that a liberal science degree makes you develop the habit to check every source all the time).

And even this piece of silly fluff does not say what you said it says, but says either nothing on the points you made, or the opposite of what you said.  And the only real figures in this story or the other one it links to are not speculative about mobile and digital, but rather seem to be implying that digital and mobile are EA's main hope. 


Anyway, I'm tired of this correcting your misreading of anything with the word "mobile" in it.  I play over 90% of my games on console, and on consoles 90% of what I play is a physical game disc.  I'll leave it to people who play iOS games, or who love computer gaming more than console gaming to take over from here.  I don't care enough about the topic to correct you anymore. 

Greisha1
Posts: 707
Joined: December 31st, 1969, 7:00 pm

What to make of EA?

Postby Greisha1 » May 8th, 2012, 11:39 pm

It seems like EA made a few too many bad gambles. Time to consolidate around those yearly sports titles and PopCap, and cut out those mega-budget titles.

Maybe we will see football games other than Madden soon? Please?

ajsmart1
Posts: 609
Joined: December 31st, 1969, 7:00 pm

What to make of EA?

Postby ajsmart1 » May 9th, 2012, 3:26 pm

[QUOTE=Atarifever]I don't care enough about the topic to correct you anymore. 
[/QUOTE]

 Damn.  I don't care about his crusade either, but I'll miss your corrections.  You really dismantled him in this one.

HardcoreSadism1
Posts: 526
Joined: December 31st, 1969, 7:00 pm

What to make of EA?

Postby HardcoreSadism1 » May 10th, 2012, 12:00 am

Electronic Arts will likely be a worse cancer come Playsation 4 and Next Xbox. Perhaps they'll do whatever it takes to completely screw over used games distribution. 

soporj1
Posts: 556
Joined: December 31st, 1969, 7:00 pm

What to make of EA?

Postby soporj1 » May 10th, 2012, 12:10 am

[QUOTE=HardcoreSadism]Electronic Arts will likely be a worse cancer come Playsation 4 and Next Xbox. Perhaps they'll do whatever it takes to completely screw over used games distribution. [/QUOTE]

I doubt games for the next generation will be delivered on physical media that can be sold "used".

Pacman0001
Posts: 263
Joined: December 31st, 1969, 7:00 pm

What to make of EA?

Postby Pacman0001 » May 10th, 2012, 11:04 am

[QUOTE]I doubt games for the next generation will be delivered on physical media that can be sold "used".[/QUOTE]

Then I may never get to own a next generation game.  I'm usually a generation behind the times; this is the first generation where we've had a current system (a Wii and a PS3).  If I cannot buy used games, I'll be stuck in 2006 for a very long time. 

alvatron1
Posts: 28
Joined: December 31st, 1969, 7:00 pm

What to make of EA?

Postby alvatron1 » May 10th, 2012, 11:19 am

Man, how many different handles does this steer guy have? 



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