Ouch.....EA continues to get publicly lashed....

[Mizzou B-ball fan]

It would seem that the quality issues with EA's games the past couple of years and their penchant for squeezing money out of franchises is finally getting called out by most gamers on a regular basis.

http://www.joystiq.com/2006/10/04/ea-sports-perfecting-mediocrity/

http://www.joystiq.com/2006/10/04/eas-premium-ripoff/

[wade moore]

Man, are you president of the "I hate EA" club?

[QuikSand]

"Most gamers" don't read about these things, don't post on internet forums, don't pay attention to people who do, and don't seem to have any problem paying sixty bucks for a pile of shit year after year.

[TroyF]

Seems like as good of a spot to post this as any. . . I'm actually impressed with the ESPN video game review section. They shredded NBA Live and gave NBA2K7 a great score.

As for the rest, QS is right.

[wade moore]

"Most gamers" don't read about these things, don't post on internet forums, don't pay attention to people who do, and don't seem to have any problem paying sixty bucks for a pile of shit year after year.

I've been trying to get this point across in this forum for awhile.

In the big picture, EA puts out games that makes the consumers happy. "hardcore gamers" just can't accept that and understand how it works in the marketplace. EA is most certainly not headed for a downfall, or even their EA Sports division.

[Pumpy Tudors]

Man, are you president of the "I hate EA" club?
He's not only the president. He's also a client.

[Subby]

Does an article on joystiq.com really count as being publicly lashed? What do you think their readership numbers look like?

[Bee]

The equivalent of being publicly lashed in Podunk, Wisconsin?


edit: And I'll never forget that night...

[Pumpy Tudors]

I'm going to be publicly lashed in Latrobe, Pennsylvania, in about 25 minutes. Latrobe is the birthplace of the first all-pro football team, Mr. Rogers, and Arnold Palmer. Arnie used to buzz people's houses in his plane many years ago, and then they went and named their local airport after him.

Anyway, the lashing starts soon, so come on over. We're expecting a crowd of about 15 or 16 people.

[wade moore]

Does an article on joystiq.com really count as being publicly lashed? What do you think their readership numbers look like?

Another very valid point. Even among the "hardcore gamers" joystiq.com doesn't exactly rank as the top few sites... top 5 even...

[Mizzou B-ball fan]

He's not only the president. He's also a client.

Certainly true. I haven't bought an EA game in over 2 years (nearly 3) for that reason. I'm just surprised that it's taken so long for most gamers to notice the steep decline in the quality of their games. Certainly, their exclusive NFL license did nothing to enhance their image. It's a shame because I think that most of us would say that EA is the reason that sports games were great on consoles like the Genesis/SNES and Playstation.

[Mizzou B-ball fan]

Another very valid point. Even among the "hardcore gamers" joystiq.com doesn't exactly rank as the top few sites... top 5 even...

Certainly agree with that as well. But where there's smoke, fire usually emerges sooner or later. As bad as EA's games have been this year, especially on the 360, there's going to be a lot more scrutiny of their upcoming updates in 2007.

[wade moore]

Certainly agree with that as well. But where there's smoke, fire usually emerges sooner or later. As bad as EA's games have been this year, especially on the 360, there's going to be a lot more scrutiny of their upcoming updates in 2007.

They will still be by far the most powerful gaming coming out there and have the most powerful sports gaming division.

Again, as much as we have nitpicks about these games, the general public loves them. Go down to your local high school and talk to the Freshman, I bet they all LOVED Madden on the 360.

[QuikSand]

I'm going to be publicly lashed in Latrobe, Pennsylvania, in about 25 minutes. Latrobe is the birthplace of the first all-pro football team, Mr. Rogers, and Arnold Palmer. Arnie used to buzz people's houses in his plane many years ago, and then they went and named their local airport after him.

Anyway, the lashing starts soon, so come on over. We're expecting a crowd of about 15 or 16 people.

I can't make it, but please have a Rolling Rock for me.

[Pumpy Tudors]

I can't make it, but please have a Rolling Rock for me.
Good call. Sadly, they closed the brewery a couple of months ago. :(

[Mizzou B-ball fan]

They will still be by far the most powerful gaming coming out there and have the most powerful sports gaming division.

Again, as much as we have nitpicks about these games, the general public loves them. Go down to your local high school and talk to the Freshman, I bet they all LOVED Madden on the 360.

Disagree with your first point. The most powerful gaming company (in your opinion) lost over $80 million dollars and expects to have another losing year this year. I'm guessing that stockholders don't see that as a rosy future for a company who was a cash cow as little as 4 years ago.

As far as kids go, I have 3 cousins who are several years younger than me and in high school. In years past, they always bought the NCAA and Madden games. This year, they just bought the NCAA game and hear through their friends that the Madden game wasn't as good. Granted, this is a VERY unscientific survey, but it does seem to jive with what most are saying about Madden.

I would also say that many rely on the fact that they can buy the game on release and then sell it back to Gamestop if they don't like it. If the quality continues to trend downward, I think you'll see more people tend to wait and not buy upon release and instead buy the barely used copies that flood the stores 2-3 weeks after release. This would save them at least $10 and give them time to hear if the game is any good.

[Pumpy Tudors]

Disagree with your first point. The most powerful gaming company (in your opinion) lost over $80 million dollars and expects to have another losing year this year. I'm guessing that stockholders don't see that as a rosy future for a company who was a cash cow as little as 4 years ago.
When it comes to sports video games, I would say that EA is the most powerful. I believe I said this in a Madden thread a few months ago, but they could show a commercial consisting of 29 seconds of Michael Vick taking an enormous shit, and then flash "Madden 08" on the screen for 1 second. The next day, EB and GameStop would be flooded with calls asking about preorders.

The week before the NBA games came out this year, I went to GameStop and said that I might be stopping in there to get NBA 2K7. The manager said that he would be picking up NBA Live from the distro center so he wouldn't have to wait for a shipment to come in. He admitted that NBA Live is shit, but so many more people would pick EA's game that he needs to have it early. NBA Live is (IMO) by far the worst of the EA Sports franchises, yet people continue to jump on that game year after year.

If that's not power, I don't know what is.

[wade moore]

Disagree with your first point. The most powerful gaming company (in your opinion) lost over $80 million dollars and expects to have another losing year this year. I'm guessing that stockholders don't see that as a rosy future for a company who was a cash cow as little as 4 years ago.

As far as kids go, I have 3 cousins who are several years younger than me and in high school. In years past, they always bought the NCAA and Madden games. This year, they just bought the NCAA game and hear through their friends that the Madden game wasn't as good. Granted, this is a VERY unscientific survey, but it does seem to jive with what most are saying about Madden.

I would also say that many rely on the fact that they can buy the game on release and then sell it back to Gamestop if they don't like it. If the quality continues to trend downward, I think you'll see more people tend to wait and not buy upon release and instead buy the barely used copies that flood the stores 2-3 weeks after release. This would save them at least $10 and give them time to hear if the game is any good.

A few things to point you too..

http://www.gamespot.com/news/6156916.html?q=sales - Gamestop article that makes the main point of, "Though the franchise has always performed well in retail during its 17-year career, EA's estimation makes Madden NFL 07 the best-selling game in the franchise's history of first-week performance."

Having trouble finding charts, but for instance here are USA charts for all formats April 20, 2006 - http://www.gamesindustry.biz/charts.php this has 7 of 20 by EA...



Anyway, I'm having a hard time finding good charts, if someone can point me to a good site that would help.. Point being, EA consistently has up to 50% of the top selling games on any given week, month, year chart... They have the top selling franchise of all times (The Sims) and I think probably Madden is not far behind..

I don't know what their $$$ figures look like, but if they are losing money I'm sure that the NFL deal is part of that... I'd love to see a link to prove that $$$ lost...

They continue to buy up smaller companies, like DICE that made BF2, they just bought that.. when it comes to volume of sales, no one comes even CLOSE to EA, there is no questioning that - they are THE powerhouse in gaming.

[Mizzou B-ball fan]

A few things to point you too..

http://www.gamespot.com/news/6156916.html?q=sales - Gamestop article that makes the main point of, "Though the franchise has always performed well in retail during its 17-year career, EA's estimation makes Madden NFL 07 the best-selling game in the franchise's history of first-week performance."

Having trouble finding charts, but for instance here are USA charts for all formats April 20, 2006 - http://www.gamesindustry.biz/charts.php this has 7 of 20 by EA...



Anyway, I'm having a hard time finding good charts, if someone can point me to a good site that would help.. Point being, EA consistently has up to 50% of the top selling games on any given week, month, year chart... They have the top selling franchise of all times (The Sims) and I think probably Madden is not far behind..

I don't know what their $$$ figures look like, but if they are losing money I'm sure that the NFL deal is part of that... I'd love to see a link to prove that $$$ lost...

They continue to buy up smaller companies, like DICE that made BF2, they just bought that.. when it comes to volume of sales, no one comes even CLOSE to EA, there is no questioning that - they are THE powerhouse in gaming.

I don't disagree with any of the information that you have provided here. They do often have 50% of the sales charts covered. Madden did sell more units than any of the past years (though some of that does have to do with the overwhelming number of consoles that they produce for and the lack of competition over the past year). They certainly have not received nearly the boost in sales that they thought they would get by signing the exclusive license.

They are currently paying $60 million/year for the exclusive license. EA lost $80 million last year and is expected to lose a similar number this year. Even netting out the license, they still lose $20 million last year. Also, if they didn't sign that agreement, they probably wouldn't have sold as many units because they would have had a strong competitor. That was EA's fear and they're having to deal with that in the form of a $60 million loss each year in the form of a check to the NFL.

If anything, this information shows just how badly run this company is more than anything else. Imagine if they controlled their spending AND provided new innovations in their games. Right now, they're spending a ton in marketing to generate enough sales to cover the fact that the quality of their games are in decline. Who knows how long that band-aid will stay on before something has to give?

[wade moore]

I don't disagree with any of the information that you have provided here. They do often have 50% of the sales charts covered. Madden did sell more units than any of the past years (though some of that does have to do with the overwhelming number of consoles that they produce for and the lack of competition over the past year). They certainly have not received nearly the boost in sales that they thought they would get by signing the exclusive license.

They are currently paying $60 million/year for the exclusive license. EA lost $80 million last year and is expected to lose a similar number this year. Even netting out the license, they still lose $20 million last year. Also, if they didn't sign that agreement, they probably wouldn't have sold as many units because they would have had a strong competitor. That was EA's fear and they're having to deal with that in the form of a $60 million loss each year in the form of a check to the NFL.

If anything, this information shows just how badly run this company is more than anything else. Imagine if they controlled their spending AND provided new innovations in their games. Right now, they're spending a ton in marketing to generate enough sales to cover the fact that the quality of their games are in decline. Who knows how long that band-aid will stay on before something has to give?

I would still like to see a reference to this money lost.

But anyway, given the above, I don't see how you can argue with the fact that EA is the most powerful gaming company out there. I didn't say they were the most financial sound, I said most powerful. No one is even CLOSE in the weight that they pull in the gaming industry.

[grisha]

NCAA 2007 is the greatest game ever invented.

[cartman]

And to think, EA started out as Dr. J vs. Larry Bird, One on One.

http://www.bigredandshiny.com/issues/issue33/pix/column/FROM_THE_EDITOR_18152345_01.gif

[Pumpy Tudors]

And to think, EA started out as Dr. J vs. Larry Bird, One on One.
That game was awesome, but the sequel with Michael Jordan and Larry Bird was terrible except for the dunk contest.

[Mizzou B-ball fan]

I would still like to see a reference to this money lost.

But anyway, given the above, I don't see how you can argue with the fact that EA is the most powerful gaming company out there. I didn't say they were the most financial sound, I said most powerful. No one is even CLOSE in the weight that they pull in the gaming industry.

Here's a quote from 1st quarter numbers from this year. The numbers aren't huge because that's obviously a slower quarter, but the trend in dollar amount mirrors what happened in other quarters last year and thus far this year.....

"EA has posted a $16 million net loss for the quarter. During the same quarter in 2005, they reported an $8 million net profit. Translation: after expenses, the company made $24 million less than it did during the same period of time in 2005. One factor they contributed to the reduced revenue was EA's move to cut the price of many of its new current-generation console releases by 20 percent in February."

One other thing to note from this info is that EA is having to cut its current release prices sooner and sooner each year. Never a good thing when you're trying to maximize profit.

Certainly, no one can argue that they still hold a lot of control over the market. But there are many game making companies that went from being big to being nothing in a big hurry by being complacent. EA is doing that and it's going to nip them in the backside if they don't control it.

[wade moore]

Where are you getting these quotes from?

[wade moore]

I'm trying to research this information...

I came across this...

http://finance.yahoo.com/q/co?s=ERTS

Unless I'm reading it wrong, that says to me that EA has a $213M net income compared to $22M for Activision and -$89M for Take Two.. with an industry average of -$20M...

[wade moore]

And here is a more specific break-down..

http://finance.yahoo.com/q/is?s=ERTS&annual

[wade moore]

Forbes shows over $200M http://finapps.forbes.com/finapps/jsp/finance/compinfo/CIAtAGlance.jsp?tkr=ERTS

As does Hoovers http://www.hoovers.com/electronic-arts/--ID__14059--/free-co-factsheet.xhtml


I really want to know where you're getting your facts from.

Edit: Deleted one article because I just realized it was from 2003.

[wade moore]

I finally found something with your data -http://www.orlandosentinel.com/business/orl-electron0406may04,0,7274521.story?coll=orl-business-headlines

A loss that included a $600M+ purchase... You cannot predict the demise from 1 bad quarter, that's just silly.

Edit: A quarter in which they were hurt by the debacle that was the XBOX360 release.

[Anthony]

forwarded by my marketing guru friend:

Video game advertising integrations are becoming much more robust. For example, anyone who purchases Electronic Arts' basketball game NBA Live '07 for Microsoft's Xbox 360 or Sony's PlayStation 3 will be able to unlock a host of sweet items and game features in the game from Adidas. As part of its sponsorship, there are more than 100 Adidas-specific elements hidden in the game that can be unlocked using simple codes, available through retail, online and real-world events. Gamers will be able to unlock five NBA players: Tim Duncan of the San Antonio Spurs, Tracy McGrady of the Houston Rockets, Kevin Garnett of the Minnesota Timberwolves, Gilbert Arenas of the Washington Wizards and Chauncey Billups of the Detroit Pistons.

The players will wear custom Adidas uniforms, touting the retailer's latest marketing slogan, "It Takes 5IVE." They can take on any five players in the game in an exclusive, branded Adidas arena. "We worked very closely with EA over the past year to implement this into the game," says Ryan Morlan, global communications manager for Adidas Basketball, who added that the broader marketing program features the same five players. This is much more than two-dimensional brand placements or free power-ups and other goodies; it's really a true crossover of marketing and content. It remains to be seen how players react to it. The game only just hit shelves, but what Adidas and EA have done is to create an advergame within a game. Study after study shows how many gamers feel that real-world ads enhance the realism of certain games. Marketers are clearly starting to take note, and are now producing some unique stuff.

[Desnudo]

And here is a more specific break-down..

http://finance.yahoo.com/q/is?s=ERTS&annual

Click on the "Quarterly" link. I agree though that you can't judge results based on one quarter.

[Flasch186]

a lil tidbit of info i found out about the NFL's exclusive license with EA. First it was pursued heavily BY the NFL so that they could gain more control over their product....AND more importantly the NFL is requiring 4 NFL games/ year thus putting an emphasis on quantity over quality or innovation. So youll likely see the backyard series (being purchased by EA) perhaps, or a kids game of their own, the Street franchise, Madden, and Head Coach for as long as the exclusive contract is in play.

[Mizzou B-ball fan]

a lil tidbit of info i found out about the NFL's exclusive license with EA. First it was pursued heavily BY the NFL so that they could gain more control over their product....AND more importantly the NFL is requiring 4 NFL games/ year thus putting an emphasis on quantity over quality or innovation. So youll likely see the backyard series (being purchased by EA) perhaps, or a kids game of their own, the Street franchise, Madden, and Head Coach for as long as the exclusive contract is in play.

A real shame if true. Certainly not a good thing for the consumers. I'd rather have one great game than 3-4 so-so games.

[Eaglesfan27]

a lil tidbit of info i found out about the NFL's exclusive license with EA. First it was pursued heavily BY the NFL so that they could gain more control over their product....AND more importantly the NFL is requiring 4 NFL games/ year thus putting an emphasis on quantity over quality or innovation. So youll likely see the backyard series (being purchased by EA) perhaps, or a kids game of their own, the Street franchise, Madden, and Head Coach for as long as the exclusive contract is in play.


I'm curious, what is the source that the NFL is requiring 4 games/year?

[wade moore]

Click on the "Quarterly" link. I agree though that you can't judge results based on one quarter.

Yeah, that's what I'm finding.. what Mizzou is staing holds true for one individual quarter. Again, which had some understandable challenges..

I have some issues with EA in general, but the claims of their demise are absurd.. they are selling games at an unprecedented rate.

[Flasch186]

I'm curious, what is the source that the NFL is requiring 4 games/year?

An anonymous friend of mine who works for them in Orlando/Los Angeles. S/He worked on HC for a week or so before being moved to another sport-non-sports product but s/he said that everyone knows what everyone is doing and everyone talks about stuff that their team isn't necessarily working on.

[QuikSand]

Even when Flasch writes only one sentence I still can't understand WTF he's saying.

*shurg*

[Mizzou B-ball fan]

Click on the "Quarterly" link. I agree though that you can't judge results based on one quarter.

This is probably the best info that I've found. First, this details the revenue/profit margin.....

The full fiscal year results were also released and showed a six-percent decline in revenues and an even greater fall in profits. For the 12 months ending March 31, 2006, it profited $236 million from $2.95 billion of income, versus the $504 million it made from $3.13 billion of revenue the year previous.

I'm pretty sure that I saw an $80 million loss somewhere. My guess after seeing this is that last year they had an $80 million drop in profit in a given quarter (since for the year their profit dropped $268 million).

Also, I did find this site where the stockholder and financial information for EA is kept. Feel free to sort through the large documents at your leisure. :)

It would appear that EA has a big problem controlling expenses from what I glanced at. If I see more in the document, that sticks out in particular, I'll post it.

http://investor.ea.com

[Anthony]

An anonymous friend of mine who works for them in Orlando/Los Angeles. S/He worked on HC for a week or so before being moved to another sport-non-sports product but s/he said that everyone knows what everyone is doing and everyone talks about stuff that their team isn't necessarily working on.

HUH??? that made as much sense as the immortal words of Jet Screamer, who sang famous song Eep Opp Ork Ah Ah (http://www.youtube.com/watch?v=0B47xFlRHE0)

[Deattribution]

I have some issues with EA in general, but the claims of their demise are absurd.. they are selling games at an unprecedented rate.


They also spend an insane amount of money on these games not only in producing them, but licensing them and marketing them - if it doesn't sell they take a bigger hit than most companies.

[Flasch186]

it makes sense, but I wanted it to be blurry since S/he's a friend of mine and the people at EA do have internet access.

Im saying that all the people that work there talk about projects that they aren't necesaarily attached to, so they hear whats going on on other projects even if theyre not on it. this is how I found out about the NFL stuff.

[Mizzou B-ball fan]

Here's some info I found going through the financial report......

I always like to look through the exec compensations. This is one that really stuck out to me. It must have been a bad year for this to occur......

As a result of EA's financial performance in fiscal 2006, Mr. Probst did not receive a cash performance incentive bonus for fiscal 2006.

Here's a good deal for this guy. $2M tax-free? Gotta like that.....

On June 24, 2002, we hired Warren Jenson as our Chief Financial and Administrative Officer and agreed to loan him $4 million, to be forgiven over four years based on his continuing employment. The loan does not bear interest. On June 24, 2004, pursuant to the terms of the loan agreement, we forgave $2 million of the loan and provided Mr. Jenson approximately $1.6 million to offset the tax implications of the forgiveness. The remaining outstanding loan balance of $2 million was forgiven on June 24, 2006. No additional funds were provided to offset the tax implications of the forgiveness of the remaining $2 million.


Another interesting trend with expenses versus revenue/profit....

Revenue the past 5 years (in billions, 2002 listed first): 1.7, 2.5, 2.9, 3.1, 2.9
Expenses the past 5 years (in billions, 2002 listed first): .7, .9, 1.1, 1.3, 1.4
Operating profit the past 5 years (in billions, 2002 listed first): .1, .3, .5, .5, .2

As you can see, a pretty disturbing trend. Revenue and profit margins have a diminishing return while expenses continue to climb steadily upward.


I found my $80 million in the decrease in revenue in North America. Knew I had heard it somewhere.......

Overall, net revenue decreased $81 million, or 5 percent, as
compared to fiscal 2005.



I found this to be very interesting. This is information regarding license costs that they have already agreed to in the future. Being an accountant, I quickly noticed they are really backloading these contracts. Looks good now, but really going to hurt when they finally record these expenses in the future. 2011 could be a real problem.

2007 155M
2008 144M
2009 152M
2010 144M
2011 275M
Beyond 700M

[Pumpy Tudors]

I found this to be very interesting. This is information regarding license costs that they have already agreed to in the future. Being an accountant, I quickly noticed they are really backloading these contracts. Looks good now, but really going to hurt when they finally record these expenses in the future. 2011 could be a real problem.

2007 155M
2008 144M
2009 152M
2010 144M
2011 275M
Beyond 700M
They'll just waive the contract after 2010 and take the one-year cap hit.

[Vinatieri for Prez]

It's all about market share. You see, you spend big bucks in marketing and exclusive licenses. You lose some money but after you have wiped out (or severely damaged) your competitors, you clean up after that. I frankly think their marketing strategy is very good. They could stand to make the games better as that would make things better. But they're doing alright, believe me.

[Bee]

They'll just waive the contract after 2010 and take the one-year cap hit.

Dan Snyder has taken over EA!

[Bee]

It's all about market share. You see, you spend big bucks in marketing and exclusive licenses. You lose some money but after you have wiped out (or severely damaged) your competitors, you clean up after that. I frankly think their marketing strategy is very good. They could stand to make the games better as that would make things better. But they're doing alright, believe me.

I agree. They are wiping out the competition and still making money, it's really hard to fault their business strategy even if it's not in the best interest of the consumers.

[wade moore]

Mizzou, too much to quiote, so i'll just respond without quoting..

I dont' disagree with any of the facts you've laid out there. What I disagree with is that it pionts to some major downfall. Their expenses have gone up, sure, but partially to stem losses to competitors (namely with the Madden Franchise). As you have pointed out, a large percentage of their increased cost/decreased net income is due to the contract with the NFL. That contract stemmed a tide in which sales were shifting to Sega. In addition, the NFL was the one (as others have mentioned) looking for an exclusive deal. If EA doesn't sign with the NFL, then someone else (say Sega/Take Two) does and they lose a LARGE portion of their revenue. So it's kind of spending money to make money type deal.

I think you're really making a jump to say they're on the demise and all of this "bad press" is causing it. That's all I'm saying. EA will be the dominant force in games next year by volume just as they were this year.

[Mizzou B-ball fan]

It's all about market share. You see, you spend big bucks in marketing and exclusive licenses. You lose some money but after you have wiped out (or severely damaged) your competitors, you clean up after that. I frankly think their marketing strategy is very good. They could stand to make the games better as that would make things better. But they're doing alright, believe me.

Here's the problem with that theory. If you take the losses and then later figure out that that you really didn't gain that much by your action, you're in a bit of a bind. Certainly, their revenue and expense trends seem to indicate that their gamble hasn't worked so well. They were supposed to be making loads of money now that they have bought out some of their competitors. So far, it hasn't panned out.

Atari and Sega played the game the same way. Now, neither of them are a major factor in the industry. Nintendo is honestly the only major player that has shown they know how to run a strong company without taking losses just for the sake of trying to push someone out. I'm not a fan of Nintendo games personally, but they surely know how to run a solid company in the video game industry.

[Mizzou B-ball fan]

Their expenses have gone up, sure, but partially to stem losses to competitors (namely with the Madden Franchise). As you have pointed out, a large percentage of their increased cost/decreased net income is due to the contract with the NFL. That contract stemmed a tide in which sales were shifting to Sega. In addition, the NFL was the one (as others have mentioned) looking for an exclusive deal. If EA doesn't sign with the NFL, then someone else (say Sega/Take Two) does and they lose a LARGE portion of their revenue. So it's kind of spending money to make money type deal.


You've basically proven my point. They didn't 'spend money to make money' in that case. They spent money to keep the same revenue or avoid losing revenue. That's fine in the short run, but they're going to have to show an increase in revenue to justify that major expenditure. The fact that revenue has reversed its course and is actually declining since that transaction is not a good sign at all.

In addition, early indicators show that they're going to see a double digit loss in the number of units of NBA Live sold this year. That's not a good sign either, especially with the stiff competition that they face with the 2K sports NBA franchise that is actually favored by Xbox/Xbox360 owners.

Look, I understand that they are making millions at this point. It seems like tons of money. How could they ever fall from that lofty revenue level, right? With that said, I fumble through a lot of these financial reports because I'm an accounting geek and like to look. There are some worrysome numbers in that report that I already cited that could cause major problems if they aren't reversed.

[wade moore]

You've basically proven my point. They didn't 'spend money to make money' in that case. They spent money to keep the same revenue or avoid losing revenue. That's fine in the short run, but they're going to have to show an increase in revenue to justify that major expenditure. The fact that revenue has reversed its course and is actually declining since that transaction is not a good sign at all.

In addition, early indicators show that they're going to see a double digit loss in the number of units of NBA Live sold this year. That's not a good sign either, especially with the stiff competition that they face with the 2K sports NBA franchise that is actually favored by Xbox/Xbox360 owners.

Look, I understand that they are making millions at this point. It seems like tons of money. How could they ever fall from that lofty revenue level, right? With that said, I fumble through a lot of these financial reports because I'm an accounting geek and like to look. There are some worrysome numbers in that report that I already cited that could cause major problems if they aren't reversed.


Fair enough.

But, what I'm still driving at is questioning this statement:

They will still be by far the most powerful gaming coming out there and have the most powerful sports gaming division.

Disagree with your first point. The most powerful gaming company (in your opinion) lost over $80 million dollars and expects to have another losing year this year. I'm guessing that stockholders don't see that as a rosy future for a company who was a cash cow as little as 4 years ago.

I haven't seen anything to disprove this fact. Could they be heading down a slippery slope and fail eventually? Yes. Will they be overtaken in the next year or two by some other company? Heck no.

[Mizzou B-ball fan]

Fair enough.

But, what I'm still driving at is questioning this statement:

I haven't seen anything to disprove this fact. Could they be heading down a slippery slope and fail eventually? Yes. Will they be overtaken in the next year or two by some other company? Heck no.


Totally agree. In the next year or so, they'll be fine. If that's what they're shooting for, they are on target. IMO they are far too comfortable in their position. Most of the current EA staff is underpaid and overworked. They're tired of the situation. Combine that with all of the financial data and the quality of the games, and you've got problems beyond 1-2 year.

Fear is a great driving factor. EA does not have the fear of failing right now. You should always maintain that fear in your organization even when things are going well. The ambition is simply not there.

[Pumpy Tudors]

I don't think it's significant that most of the EA staff is underpaid and overworked. If somebody decides to quit, there are dozens of other people dying to take that place. It's like ESPN. ESPN could screw somebody over bigtime, and there are tons of people fresh out of Syracuse with shiny new communications degrees who are ready to take over, management be damned.

If you have the power, you don't really need anything else.

[Anthony]

I don't think it's significant that most of the EA staff is underpaid and overworked. If somebody decides to quit, there are dozens of other people dying to take that place. It's like ESPN. ESPN could screw somebody over bigtime, and there are tons of people fresh out of Syracuse with shiny new communications degrees who are ready to take over, management be damned.

If you have the power, you don't really need anything else.

exactly, i don't think EA will fail from a lack of demand for their positions. shit, i'd work at EA if i did something they deemed valuable.

my belly button lint is stinky beyond all heck, if they value that then i'll pack my bags and sleep with the devil.

[kingnebwsu]

Interesting thread.

I don't see EA failing anytime soon/ever. They're going to keep buying up the smaller companies so they have a huge warchest of games/licenses.

The NFL 2k series wasn't selling very well, despite several critically acclaimed entries in the series (the madden 2005 vs nfl 2k5 was like a 8:1 or 9:1 ratio as far as sales went).

I predict that NBA Live 07 will outsell NBA 2k7 on all consoles by at least a 3:1ratio...and I think that's being generous to 2k. It's good to see that 2k is at least putting some commercials on ESPN to get their brand name out there. I think their NBA game deserves it, since it was (IMO) the best console sports game of 2005 (and possibly 2006).

Regardless of how much we bitch in this thread about the quality of EA games, they will still continue to sell like hotcakes. ESPECIALLY Madden/NCAA football. Just check out how long the threads are on FOFC for this year's version of the EA sports games and you'll see that our community isn't immune to the hype/excitement that the new EA football games bring every year.

[kingnebwsu]

hxxp://www.gamespot.com/news/6159362.html

Just saw this article.

"Electronic Arts' NBA Live 07 debuted solidly in second (PS2) and fourth (Xbox 360) places, while rival NBA 2K7 from 2K Sports wound up in third (Xbox 360) and seventh (PS2). "

To me this indicates that the hardcore crowd recognizes that NBA 2k7 is the better game (Xbox 360 owners, 2k7 was 3rd vs Live's 4th) but the mass market crowd (PS2 owners) were more likely to pick up Live (2nd vs 2k7's 7th). Obviously the PS2 has a bigger user-base, so if this trend keeps up then Live will definitely outsell 2k7.

I know it's just one week from one store, but I think this is a pretty good indicator of what the end result will be.

[Logan]

I found my $80 million in the decrease in revenue in North America. Knew I had heard it somewhere.......

Wait...so you called a $80MM drop in revenue the same as a LOSS of $80MM.

And you say you're an accounting geek? Did you work for Arthur Andersen?

[Raiders Army]

Funny cartoon

http://ctrlaltdel-online.com/comic.php?d=20050218