what did you think of the NY Times dig on ERTS today? I'd also like to hear your opinion (although I don't always agree)...you don't think the SIM ONLINE is a bit weak in sales? Are you a bit worried as a long? I'm not looking for a fight, just spending some relaxing time on the screen :)
Well, since you're not looking for a fight ;-), I'll just give you a straightforward opinion: From all accounts (altho I've not played it), The Sims Online appears to be a mediocre gaming experience, not even as good as the stand alone version that became the bestselling videogame of all time. And that's a real shame, because it's the one title that had the greatest potential to really launch online gaming's popularity to the general public, and establish a pay-to-play model as fundamentally feasible. And ERTS bumblef*cked that opportunity away. Now, if you recall, Ultima Online was so 'broken' at launch that players brought suit against EA for what amounted to fraud - i.e., not delivering on what was promised. And it not only survived, but over the years became a viable online experience with a rather stable base of paying subscribers. And ERTS reportedly has plans to fix dull gameplay and implement new featuers in The Sims. But it's a lot easier to hook people the first time around, as opposed to convincing them to take a second look.
The question is: How much does it matter? ERTS has *always* bumblef*cked their way around online games, but does so many other things well, it hasn't really mattered in the past, so does it now? That's the debatable question.
From one viewpoint, it doesn't: A company that has a BILLION dollar QUARTER, in which TSO contributes exactly *nothing* of substance, when all of its competitors are announcing stunning earnings shortfalls, is a very strong company indeed, and online revenues aren't needed to keep revenues robust.
From another viewpoint, it's a very nervous market, in a very nervous sector, where people are worried that ERTS will succumb to the same 'bad economy' malaise that seems to have affected all of its rivals. (I indeed find it pretty stunning that ERTS actually beat their numbers significantly in this environment - close to miraculous, and my hat's off to them for it.) If it did succumb, then the potential online revenues would help soften the blow, and realistically, I don't think ERTS can count on much help from online sources presently.
Some additional thoughts: When/if an online pay-for-play model is developed, you can bet ERTS will be at the forefront of it. It's partly what the fight w/MSFT is about: whoever controls access to the gamer's pocketbooks is king, and they both want to be first in line to that access. Vivendi's properties (Diablo, Starcraft, Warcraft) look also like prime candidates for online pay, and so has great value to both companies (altho as I've said, I think MSFT is more desperate and needy in this regard).
Lastly, count on this: In future months, you'll see jackasses like Chickens*tter 1929 quote the first part of this message, without the context provided by the rest of it. It's just in his dishonest nature - he can't help it ;-)
It's worth noting that TSO had 80k+ subscribers IN THE FIRST MONTH of it's release. It's also worth noting that the game shipped THE WEEK OF XMAS (which is a, well, let's say "less than desireable" week to release a computer game). Last, it's worth noting that EA has internal plans for it to be at 200k subs by fiscal year end which seems difficult but still doable depending on effectiveness of price cuts and in-game enhancements.
So, TSO is only a failure in the sense that it has not met/exceeded the lofty goals it was hyped for, but EA has a lot of time to correct that and I expect they will. Even though Majestic and Motor City Online went belly up, as Jamok pointed out, they were able to turn UO around, and the jury is still out on Earth & Beyond.
<<The question is: How much does it matter? ERTS has *always* bumblef*cked their way around online games, but does so many other things well, it hasn't really mattered in the past, so does it now?>>
Online gaming is the future. PERIOD. Just go see how successful Microsoft has been. In addition to the multiplayer aspect of online gaming, there will be some other aspects that will change the gaming world FOREVER. Games will be initially purchased at your local retail store and then new levels will be downloadable online. The life of the game will be greatly extended. Microsoft is already doing this. One multi-player game offering new content is Mechwarrior, an offline game offering new content via download is Splinter Cell. The future has already arrived. While Microsoft is delivering this future....in your own words, ERTS is "bumblef*cking the opportunity away."
Now tell me how crucial online gaming is to ERTS.
<<From one viewpoint, it doesn't (matter): A company that has a BILLION dollar QUARTER, in which TSO contributes exactly *nothing* of substance, when all of its competitors are announcing stunning earnings shortfalls, is a very strong company indeed, and online revenues aren't needed to keep revenues robust.>>
Glorify the past all you want, but that doesn't equal future success. What money ERTS makes on offline games has absolutely nothing to do with whether or not online gaming is important. Believe me, it is important. Very important. If you don't think so, please keep playing your old 8-bit NES. The industry is changing. If Online gaming was not important, both Sony and Microsoft would not be running networks and establishing it with the current generation of consoles. PS3 is going to be all about NETWORKS, home networks, online networks, and all kinds of connectivity. Put simply, online gaming is the future. Let me ask you this: can you name more than 5 PC titles that have been released in the last year that are not playable online? Or better yet, what percentage of the top 20 PC games are not playable online? Online gaming dominates the PC. It will also dominate the console system as well. It is only a matter time and ERTS is "bumblef*cking the opportunity" away.
<<From another viewpoint, it's a very nervous market, in a very nervous sector, where people are worried that ERTS will succumb to the same 'bad economy' malaise that seems to have affected all of its rivals.>>
That has nothing to do with the FUTURE of gaming. The game industry is changing rapidly. The least of ERTS' worries is the economy. ERTS worries about not being an online force. The battle between Microsoft and ERTS concerns online. ERTS does not want to give into Microsoft because they want to be able to keep control of the online process. Instead of accomplishing anything, they continue to "bumblef*ck" around.
<<When/if an online pay-for-play model is developed, you can bet ERTS will be at the forefront of it.>>
It has been developed. It exists right now. ERTS is not at the forefront of it. They are sitting in the rear seat. No. Scratch that. ERTS isn't even in the car.
<<It's partly what the fight w/MSFT is about: whoever controls access to the gamer's pocketbooks is king>>
Microsoft controls the access to the pocketbook. Microsoft is the KING. That is what is wrong with you and your brethren. You think ERTS is on the same level as Sony, Nintendo and Microsoft. I hate to inform you, but ERTS doesn't even meet eye to eye with their
You are pathetic Jamok. Pathetic at typing nonsense. Pathetic at saying online "contributes exactly *nothing* of substance." Pathetic at trying to diminish the significance of online gaming and its future.
Get a life you puke.
Slow TSO sales will not have a material effect on EA. Many of their key titles sell less than expected (Triple Play, Alice, etc...). And, on the other end -- many titles outsell forecast (family of Sim's expansion packs). But, don't argue with me about specific games meeting or not meeting the forecast sales. It isn't relevant.
And that's my point: EA is too diversified. They don't feel these types of disturbances. Losers are amortized across winners.
I'd be more concerned about sick franchises than a sick SKU. And, the Sim's aren't sick.
Disclosure: I have a large long position in EA (purchased in 1997 and 1998). It may seem a little old fashioned, but I bought EA because I like the company. The sector is a paradox. It always seems "done". It never is.
Shorts: Be careful. The xbox2 and ps3 announcements are looming. We are a little early (by my watch) for the next-cycle-hype, but it comes strong - and without warning.
If you are interested in side bets on the next cycle, watch RMBS (ps3) and ATYT (xbox2).
First off - I am not looking to start a fight.
If you bought ERTS in 98 cuz you liked the company - congrats. You have alot of paper profits as of now. My point is that if that is your style of investing, I am willing to bet you bought a few others and watched them dwindle why you "liked" them. Am I right?
If I am right, you might want to reconsider your infatuation for ERTS. IMO it looks like CSCO a couple years ago when everybody kept buying because it is a good company.
If I am wrong, and you only buy stocks that continue to go up, please give me your list.
Thought you presented a well reasoned POV - especially the idea that sick franchises are a cause to worry, individual failures or successes don't count for much.
There is one thing I might take issue with - the last time we got 'late' in the platform cycle, ERTS really did slump considerably from the highs. I don't think we're there yet, as we really seem to be in mid-cycle, not at the end. But I don't see why that scenarios eventually won't repeat, as buyers hold off both software and hardware purchases in anticipation of a newer machine.