Interesting console news from EA
 

Being a stockholder of EA, I recieved their annual report in the mail this week. Normally these things aren't too interesting but there were some parts worth mentioning:

* In terms of console sales, PS2 accounted for 37% of EA sales; Xbox 9%, Gamecube 7%
* There was mention of the lack of support for Xbox Live, saying right now it is undetermined if they will support it in the future. Their reason was they didn't think adding support would increase sales enough to make up for the added development.

That's about it, except the latest news from today's newswire which states Need for Speed: Underground, which was originally slated for 2004, will be released this fall.

Jeremy

Re: Interesting console news from EA
 

Where's the rest (47%) of the sales going?

Only 7% for Gamecube. Seems to me that Nintendo is going the way of Sega.

Re: Re: Interesting console news from EA
 

They are!?! What other financial business savy do you have to share with us Mr. Groucho?!? Do you think I should invest in Enron?!? I mean you seem to have all the answers.

[homer]In case you didn't realize it, I was being sarcastic[/homer]

Re: Re: Re: Interesting console news from EA
 

I think he was too :)

I read a really interesting article about Xbox Live/EA stuff in the latest XBN (I have no idea why this magazine shows up at my doorstep either.)

Basically it said that Microsoft wasn't willing to share any of the subscription fee revenue with EA. Sony was willing to let EA deal with all of the revenue. So from a business standpoint, EA hasn't wanted to commit to Xbox live, since there is NO incentive for them to do so. Which is probably true, since I think EA sports games will sell regardless of Xbox live content.

The unaccounted for percentage would be mostly PC games and "other"...

EA announced they weren't gonna support Xbox Live at E3... not really "breaking news" but I hadn't seen the percentage breakdown - interesting.

But I thought PC gaming was far less popular than console gaming...this seems to suggest otherwise?

I guess "Other" would be GBA games and toys.

Re: Re: Interesting console news from EA
 

Well, I would agree the Gamecube seems to be going the way of the Dreamcast. Losing 3rd party support for one. The other seems to be the glut of clearance titles I haven't seen since the days of the DC (which was awesome, BTW). It seems a Gamecube title has a shelf life of about four weeks, after which it is severely discounted.

I don't have it in front of me but the rest is most likely PC software sales, since THQ handles all EA properties for the GBA. Makes sense when you have the biggest selling game of all time in your PC portfolio (Sims).

Jeremy

Yeah - stick a fork in PC gaming - it's done - nobody plays PC games anymore. PC gaming is gonna go the way of Dreamcast.

I imagine it's split between the GameBoy Advance and PC with a few percentage points still going to the PS1 even. EA does makes alot of PC titles. I picked up Freedom Force this week ( on the recomendation from a few DVDtalkers) and that was an EA title. So is Shogun Total War I believe.

Remember those are just EA's sales figures. Another company would have a different sales breakdown regarding where the focus is.

Their booth at E3 was mostly PC games I think. Battlefield and Medal of Honor and Sims 2 and a bunch of other stuff.

That 47% is for The Sims Expansion Packs alone... :D

Thats true. :lol:

Re: Re: Re: Re: Interesting console news from EA
 

Bull*****...I really really really want to buy NCAA 2004 and/or Madden 2004, but I highly doubt it since it is not XBOX Live. I had to convert myself to NFL 2K3. I think it's a decent game, but i always liked the Madden series....but I really like online play. So, the only way i get MAdden is if it's cheap i suppose....

oh well, my 2 cents

The reason EA dropped Live support is because they wanted a special deal from MS. MS gives every developer the same deal, but Sony kisses the ass of certain key developers giving them special deals while Nintendo buttrapes developers. That's why Sony has the best support and MS has average support and Nintendo has crappy support from 3rd parties. I think MS should be kissing asses in the beginning here... following Sony's lead on such things. Then, once they own everything - they can go back to the "same deal for everyone" thing.

or alternatively, MS could just buy EA and kank all ps2 on-line developement (or developement period!). :-)

gc is becoming very dc-like... but thats ok, I have been out of the gaming scene for a lil while and it'll allow me to pick up all the stuff i want dirt cheap. Some people cry when it happens, but I love it when a system starts to go belly up. cheap games/accessories for every1! :-)

j

I know you're being sarcastic.
 

:lol: Uh huh.

I know of a few people trying to spread the word on boycotting EA because of no online play for the Xbox. :\

I had heard that MS has a much stricter control over what gets put over Live, and they want to approve every little thing, while Sony is a little less restrictive about what goes over their network. Just what I heard, though... could be completely wrong.

I thought the reason was EA has plans for their own Pay-to-Play network, and they thought it was unrealistic that consumers will pay for their online games on top of the MS fees.

That wasn't the problem EA had with MS on this deal. My friend who works for MS gave me this info at E3 right after coming from the meeting. MS is a little bit anal about their Live service - but none of the developers seem to have a problem with it - EA is being babies about the fact that MS won't cut them special consessions and discounts. I think MS should cave in a little to pick up key developers and I also think EA should stop acting like babies.

I don't think EA is being "babies." If the X-box only accounts for 9% of their sales, they have no reason to support live without MS giving them some extra incentive. As stated in a post above, they probably wouldn't sell enough copies to recoup the costs of implementing Live in their games.

Both MS and Nintendo should be bending over backwards to please third parties, yet both continue to shoot themselves in the foot and let Sony get further and further ahead (or at least lose no ground).

I think Nintendo has been bending over backwards for EA. EA could have easily dropped Cube support (at least sports), but they have stayed aboard like they did with the N64. Nintendo must have a heck of a relationship with EA.

EA was the company that declared the Dreamcast a dead console before it was ever launched and declared they would never support it. They have the opposite attitude about the Cube even though its in much the same boat.

True. I was mainly refering to Nintendo still charging the highest of the three companies in licensing fees to third parties (assuming that this is true, I've never seen actual numbers for this generation).

They must have some special deal with EA though, either lower fees or no fees etc.

I heard the problem with EA and Live was that they wanted to run their own servers and not have MS between them and their customers.

Jack Welch from GE said that you never let anyone come between your company and your customers. And he is one person that almost every other business leader listens to.

if you're not getting the sales you want, chopping yourself off at the knees probably isn't the best way to improve the situation. Fact is, pretty soon all the other major sports franchises on xbox will be live compatible and the ea ones won't. This clearly puts the ea sports titles at a significant disadvantage, especially as the xbl base grows larger and larger. Like I said, intentionally putting your self at a disadvantage is not the best way to get higher sales numbers.

j

yeah, thats pretty much the lamest thing a developer has done in the history of consoles. I don't buy much EA stuff... and their attitude towards the dc and the xbox is one of the big reasons why.

j

If you made 100 dollars a week from cutting lawns at a buck a lawn, would you piss away 9 dollars a week just because one of your neighborhoods doesn't kiss your ass and give you more lemonaid than they give other kids who mow lawns in the neighborhood? If yes, then you're being a baby. EA isn't the only game in town for sports (pun coincidental) and yet they act like they are. You weren't in on the meeting (not that I was either, but I've heard a first hand account of it), so you don't know. MS needs to loosen up their policies to draw in the key developers and EA needs to stop being babies. Perhaps another important question could be - what percent of MS Xbox related sales does EA account for? I imagine less than 9%.

Well, the XBox and the GCN are still selling just as well as the PS2 when you look at the numbers of units.

PS2 51.2
XBox 13
GCN 9.4

Worldwide as of 3/31/03 according to EGM.




And in terms of bargains, the XBox has just as many cheap games as the GCN and the PS2 has much more bargains than do either of the two and the GBA has about twice as much as that (no i don't have numbers just look around). So you really can't tell the success of the platform by how many bargains are out there.

The shelflife of Video games are not what they used to be. Console games are almost catching up to the PC in terms of shelf life.

I honestly don't think EA's refusal to use Live will affect their sales that much. They will still sell a ton of PS2 titles, maybe even more since multi-console owners with internet will probably want the PS2 one.

Madden absolutely destroyed 2K last year, and the games were very similar. The name recognition is what appeals to the average gamer. And, like it or not, even on the Xbox online gamers are the minority. If Live compatibility would've cost too much money or even delayed the game, they made a good decision. Also, if they're game sells just as well, it'll give them leverage for next season's games... as Madden on Live will surely sell a lot of subscriptions.

Madden Online is 1 of 2 reasons im thinking about picking up a ps2(so i can kick my old roommates ass again!) other is metal gear solid 3..

Im pissed as hell that its not on xbox live, part of me wants to wait til next year but i already did that with 2003 and its still not on live :(

Why is everyone so down on PS2 online? I understand that XB Live is pretty cool, but from what I've read, the new EA games will pretty much do everything that XB Live does: Voice chat, leagues, matching, stat keeping etc. On top of that it's all free!
I guess I understand if you only have an XBOX then not having online support sucks, but PS2 online is still pretty fun and efficient.

Also I feel bad for Sega if they think first person mode and including the ESPN monkier will sell more games. Heck, even ESPN uses Madden for it's football commentary sometimes.

True, but probably not many will boycott EA an not buy the games at all. Not too many people out there only own an X-box or GC (compared to those that only own a PS2).

So those with a PS2 will buy the PS2 version, and most of those with an X-box and PS2 will buy the PS2 version for the online play.

So they're not really losing many sales in the end in all likelihood, whereas in your example I'd be losing the $9.

They have monks on ESPN :hscratch:

All I was trying to illustrate was that 9% isn't just something to turn your nose up at... hell, even 1% is a big deal. If I'm following what you're suggesting here now, you're saying that people will still go buy the EA games for another system and that 9% will just shift from Xbox to PS2. I don't buy that. I never said anything about a boycott, but if xbox owners don't have the opportunity to buy EA games, they'll just buy something else.

Your theory about single console owners vs multiple console owners is flawed - you have no way of knowing whether Xbox owners own a PS2 or GC or vice versa - all you have to go on are polls and the fact that there are more PS2s in the world than Xboxes. Plus, it's not taking into account that there are tons of PS2s in Japan and EA isn't a big seller in Japan, so you have to just look at the US basically... I don't know - I just don't think EA should be pissing away their Xbox sales just because MS won't "sweeten the deal". I agree that MS should be more flexible.

I was just going by installed base.

If there are 50 million PS2s, and around 5 million X-boxes, there are going to be a lot more that own only a PS2 or a PS2 or an X-box, rather than those that just own and X-box. It's simple logic.

Thus EA is giving most gamers a chance to play madden online, as most gamers own at least a PS2 (due to the higher number).

9% isn't a huge chunk, and EA would have to spend money to develop live support, rather than just porting over the same online system they have in place for the PS2. Thus MS should pay them extra to go to the effort as they probably wouldn't make much profit off of having live support after you subtract out the R&D costs.

I think MS should do whatever it takes to get EA making online games. I might end up buying Fever this time around to try out the new tournament thing MS is doing, but having EA titles have live compatibility should have been a priority.

I'm surprised so many posters used terms such as childish or babies when describing EA's decision. Their motive is stay profitable, if meeting MS's demands was a requirement to reach their goal- they would do it.

But there hasn't been any evidence to imply that this is the case. The number of owners who own the PS2 doubles that of the X-Box and GC combined. The X-Box is a great machine, but it isn't the market leader. This gives EA, the leader in sports games, a great deal of leverage that they shouldn't simply piss away so they can keep a few fan boys happy.

12 Month Stock Chart

Add in the fact that their stock price has been steadily climbing for a few months, and is right around their 52 week high, I would be pretty happy with their decision making as a stock holder.

EA is going very strong in a industry that has seen many former giants (Sega, Atari, Data East, etc.) either regress or die. And they do it by making good games and decisions, not by having a winning personality.

In our lifetime EA will, at some point, be the most powerful media company on the planet. Once games overtake movies (they're close if they haven't already) as the biggest entertainment money makers EA will be the proverbial godfather. I bought them at $50 and have made a sweet profit but they have a lot of upside left in them (a little NBA humor).

Long story short: it's good to have EA on your side.

I think their price target was at 80 per share, which they are at now. If you can short them it might be a good idea, and then pick them back up in a couple months to catch the holiday rush.

I bought EA last summer at 62, and Activision at 26. EA is at 76 today, down from near 80, and Activision has been stuck at 13 for months. I sold ATVI months ago at 15 and took a loss, because I didn't want my money stuck in that lagger while the rest of the market was moving up. I've since made up for that loss and then some. ;)

But I agree, this stock will probably go for a split soon to bring back investors, and take off from there.

Jeremy

i must be a freak, I have a xbox and gc but no ps2. lol! in any event, I see what you're saying about the development costs that adding XBL support would cost EA... at the same time, if Sega can afford it, its a drop in the bucket for EA. Additionally, if EA is already making PC versions of certain sports games that have internet or LAN capability, porting it over to the xbox wouldnt cost too much in R&D... would it? doesn't seem like it. Im not a programmer or software engineer, so i dunno. <shrug>

if the above IS true, I think EA is just being babies. They know Sony is willing to get down on its knees for them, and MS won't, so they take their ball and go home. pretty weak.

j

my first stock buy ever was Sega at $2/share... sold it at a shade over $5 a share. Not bad profit in less than a year. Of course, if Sega had gone bankrupt or something I woulda been screwed. lol!

j