Courtesy of the folks (or folk) at Information Arbitrage, EA, developer of video game titles from the Madden franchise to Gantchiqui Dithurbide’s Professional Jai-Alai 2005, is quickly trying to rethink its next gen console strategy, with a surging Wii and struggling PS3. EA’s success during the last generation of consoles was attributable to its releases on the PS2, which dominated the gaming market by shipping over 100 million consoles worldwide. Fair enough, this time around, EA similarly bet on the success of the PS3. Whoops. Since late November EA has suffered a significant loss in share price ($8) and subsequently almost 15% of its market cap (over $3bn).
Wii is outselling the PS3 in the US and in the last month, Wii is outselling the PS3 by 3:1 margin in Japan (Microsoft continues to struggle in Japan, with Xbox 360 sales a distant third). Games for the Wii can also be developed at almost 50% of the cost per title than games for other systems, a fact that THQ and Ubisoft, game developers with successful Wii titles in the market, are realizing with profit and margin increases. EA has 25 titles in development for the PS3 and only 6 titles expected for the Wii by the end of the current fiscal year.
EA released FY Q3 earnings on 2/1 and posted nearly flat revenue for the period compared to a year ago but lower adjusted earnings. Its shares initially gained 6% upon the announcement, but those gains were erased in the ensuing week. EA (Nasdaq: ERTS) is currently up over half a per cent in daily trading at $50.44 per share.
EA Revisited: Playing Catch Up on the Wii, Waking up to the Failure that is PS3 – [Information Arbitrage]
Posted by Texas Energy , Feb 08, 2007 11:27AM
Good post
Posted by beanspants1 , Feb 08, 2007 7:48PM
i haven't been a gamer since the SNES, but I played a Wii the other day, and the Wii is awesome.
The PSII, PSIII, and XBOX are cool, but the Wii is a game changer.
Posted by Wiinis , Feb 09, 2007 9:11PM
Wii don't need no ejaculation 8===>
Posted by Dave , Feb 09, 2007 9:32PM
Best. Title. Ever.
Posted by d0x , Feb 09, 2007 9:41PM
My primary gaming platform is Xbox360 but I also own a Wii which I got pretty much just for Zelda and despite having rented every game via gamefly Zelda is still the only game i want to own.
The PS3 is bombing for many reasons but its not too late (yet) for Sony to turn it all around and surprise everyone. I myself wont buy one until the premium edition is sub $300.
Posted by Tiger Naku , Feb 09, 2007 10:15PM
I used to have a SNES myself, but since I don't have that one anymore I have a PS 2 which I still play and I also have a Wii, it's great fun, I like playing the sports, and Zelda is really good too :), I was going togo for an Xbox till I saw the Wii.
Posted by jonesy , Feb 09, 2007 10:26PM
EA may enjoy the sales of there games previously to the release of the Wii but now they must adapt and if you knew how they treated their employees you would know that they make to much money not to ... I have worked in their building in Burnaby BC and I must say those people are treated well, they have a full gym ( I mean huge) as well as a full size indoor b ball court, an out door fooball / soccer field and beach volley ball section as well as street hockey and b-ball courts , inside they have a milk shake bar out side the gym (of which is enclosed by giant glass walls) and wicked granite spiral stair cases going up 4 levels , suspended and sourounded by nothing Beutiful.... not too mention the gaming lounges the theatre, and the motion capition center where the employees are free to hit the skate ramps tennis courts and whatever else trickles into there hands .... anyway EA makes to much coin as is so tell them to adapt to Wii"s ways or find another market.
Posted by Machine Operator , Feb 09, 2007 10:34PM
It's pretty feckin' obvious, isn't it folks?
PS3 IS FOR NOOBS.
Posted by JK87 , Feb 09, 2007 10:37PM
jonesy...usually the companies that give their employees these silly perks are doing it for a rEASON. Because they seriousl lack on the BASICS, like a god salary, benefits package, or reasonable hours.
Posted by bhart , Feb 09, 2007 11:05PM
I like my PS3 very much. As far as it being sold for $300, I hope that it takes years for the price to come down so that the price complaining wankers never buy one. I'm so sick of you out there who think that somehow the game manufacturers i.e. Sony owe you a free lunch. Get a job you louses.
Posted by clemens , Feb 09, 2007 11:16PM
You do realize that if there is no critical mass all you'll have to play in your elitist PS3 owners circles are the games that publishers made while there was still distant market hope for the door stopper?
Posted by Cam , Feb 10, 2007 1:00AM
Looks like EA will be increasing the amount of titles in development for Wii over the next several months. It only makes sense. Sony better hurry up with that price drop.
Posted by terry , Feb 10, 2007 1:31AM
Hey Bhart,
Go back to bed, your mommy will be mad you passed your curfew.
Most people live in the real world and have to make grown up decisions. While chronic wankers who live on the net might think that paying close to a thousand bucks (700 canuckies plus a game, second stick and the 15 sales tax and its almost there) for a video game is pushing it.
As a non-gamer friend who bought a PS2 for his nephew last summer for about 115$ Canuckies asked me "Is it worth the price difference?" between a PS2 and 3.
It depends to whom. To the 'gamer' who spends 20-30 hrs a week, they would probably sell a family member if they had to.
To a normal person who has to deal with bills, mortgages and spouses, not as much.
As for EA games, Ive been wondering if FIFA, NBA and NHL can somehow be modified to take advantage of the Wiimote (as well as not kill out of shape gamers with the high aerobic content of those three sports).
I can see leisurely activities like golf, darts, bowling, shuffleboard working but those three...not so sure.
Definitely enjoy the Wii but since sports games are the PC games I've always played the most, Im leary of what Wii can do with sports titles.
Posted by Oliver Tani , Feb 10, 2007 1:39AM
I can respect the PS3, but mainly because it is a Sony product. When it comes to video games, I'm no hardcore gamer or anything, but I've always been a Nintendo fan. I think the Wii is really cool, but I agree with terry on this one, I'm a bit leary of what it can do with sports games.
When it's time for me to get some Madden loaded up or NBA Live, I gotta say, I'm stickin' with my Xbox and/or the 360. Just my $.02.
Posted by Thabor , Feb 10, 2007 1:55AM
You gotta be kidding me. EA's biggest franchises are released on every single console they can manage. You're smoking something if you believe that is going to change. And its pretty potent if you actually believe the PS3 is bombing at all.
Posted by dudewtf , Feb 10, 2007 2:10AM
Well to those that wonder if the sports games like NBA/NFL etc series will work cause of the wiimote what about the fact there is a wii classic controller and that gamecube controllers are supported i doubt the gamecube ones will end up being used but im sure that some titles will be sure to take advantage of the classic controller
Posted by Captain Obvious , Feb 10, 2007 2:21AM
wHILE nINTENDO pROVIDES vALUE,
sONY iS rUN bY bLOODSUCKING jERKS tHAT sCREW cONSUMERS fOR eVERY lAST pOSSIBLE pENNY.
sTOP rAPING cONSUMERS sONY!
sONY sHOULD bE iN jAIL fOR tHE sECRET bACKDOOR tHEY iNSTALLED. iF i dID tHAT, i wOULD bE.
bUT tHEY kEEP tHE lAWYER mAFIA HAPPY, sO nO pROB, jUST a wRIST sLAPPING...
i sHALL sHYTE uPON sONY'S gRAVE, sOON eNOUGH.
Posted by rvoelker , Feb 10, 2007 3:02AM
Does anyone have an HD television, are games based on graphics, the ps3 is competitively priced with the xbox when considering the hard drive, the blu-ray player, wireless, HELLO.
Posted by itstheinputstupid , Feb 10, 2007 4:06AM
while I definitely agree that Sony got a slap on the wrist for that heinous rootkit fiasco, they make a large variety of (for the most part) high-quality electronics products. the PS3 is no exception. I've owned (and then sold) one, and it was a nice piece of hardware, with a full set of multimedia capabilities. It can slice and dice huge, complex levelsets, moving objects everywhere, way out to the distance, etc.
but Sony was never a value-added leader in the gaming marketplace. and now it shows.
they focused all their attention on computational capabilities that only a small subset of the market could appreciate at the time, while MS and Nintendo focused on elements of the experience that everyone would be able to understand and immediately appreciate. For MS, it was maximizing their leverage with the Live service. For Nintendo, they put everything into developing the input device. Sony's emphasis on raw computational power had only the geeks drooling. But some horny Linux enthusiasts on Slashdot excited about getting to play with a Core does not a critical installed base make. In fact, as soon as all the horses were out, the geeks immediately took to the amazing capabilities of the Wii remote. The $40 Bluetooth Wiimote is already being interfaced with desktop PCs of all flavors, and with full systems for $250, weighing the investment isn't a full-time chore. Nerds know a deal when they see one.
after only a few weeks of looking at what people are doing with multi-contactpoint touchscreens these days (Apple's iPhone is but one of many. check out Perceptive Pixel ;) it's safe to say that 2007 will be a killer year for user interface design.
Posted by tim , Feb 10, 2007 6:04AM
OKAY RETARDS HOW MUCH DOES THE PS3 COST 600(about yen) HOW MUCH DOES THE WII COST 200 (about yen) 3 X 200 = 600 NOOBS
Posted by Josiah Pugh , Feb 10, 2007 6:48AM
Preeeety much. Though, I feel sad for Blu-Ray. Go Blu-Ray go!
Posted by , Feb 10, 2007 9:33AM
Well Sony made a bold move and they will pay for it. The release of the PS2 was considered a bold move for the price, but I think they went a bit far in the price range. Yes it will be a kick ass machine 4 years from now-but if people aren't buying it in the numbers like PS2-you really don't have much.
Posted by , Feb 11, 2007 3:31AM
It really doesn't matter because the games that matter by EA are sub-par right now, especially Madden, ever since they got the NFL exclusive, they've done nothing but shovel out a pathetic game to it's wide fan base that IS going to buy it, I mean come on, give me some new mini-drills, create-a-whatever options, it's not a good game by any means, for any console. As well as NCAA, which SUCKS for 360 IMO, and is only decent on the PS2. And those are the only two titles I'd buy from EA, maybe NASCAR as well, but that's it. I just wish 2k was still making football games.
Anyways, I'm still a supporter of the PS3, as I say give it time, and it will come full circle and overtake the competition, just give it the time it needs to get better titles out. They went for quality, while the Wii went for quantity and a wider target audience with it's price, which was smart, as well as sony taking a chance with blu-ray. Oh well, I'm happy with my investment, and can respect others to be happy with their own choice. But I still do not see the PS3 as 'bombing' or a failure, stop overreacting people!!!
Posted by Lee D , Feb 12, 2007 10:16AM
The PS3 was Sony putting an enormous amount of eggs in one basket in an attempt to be king of the mountain. Unfortunately, they matched their massive investment of resources and capital to a never-ending litany of development, production and distribution woes. Not only does the PS3 need to be #1, but they also need to move more units than they are currently able to ship in order to make their investment really pay off. That said, I don't consider them down and out, either.
Speaking as an Ex-drone for Sony (I only bring it up because no one who knows me ever lets me live it down), their biggest stumbling block is their perception that they can make a market any time they want: Sony creates a category, and believes that consumers will buy it because a new need has been defined for them. This worked in the past, like when Akio Morita brought the Walkman to market. However, that was a long time ago, and aside from the WEGA flat-front picture tubes I can't think of any Sony-only initiatives (DVD was a collaborative effort) in the last fifteen years that has been an unqualified success.