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Electronic Arts Inc. (ERTS) Message Board

  • Resop2 Resop2 Dec 15, 2003 6:14 PM Flag

    Thinking of this sector

    Does anyone have a favorite way to compare Computer Game Software companies against each other?

    Specifically, do people like P/E, PEG, Free Cash Flow, Price/Sales, or some other measure?

    Craig

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    • Somebody has to separate the wheat from the chafe��.

      "Things are changing though with the new sheriff in town....Microsoft"---BK1929

      <<The fact that this hasn't and isn't happening>> Oh really?

      <<(never mind bulls long history of losing money shorting ERTS)>>Let�s attack the messenger and not the message. ;)

      <<I work a lot, and i'd throw out the data you're looking for if I had the time to do so, Resop2.>> Translation�..I can�t refute the facts or prove BK1929 wrong.

      <<The fact of the matter>>Little Freudian slip? << is ERTS has been proven time and again to beat estimates, maintain interest by the public in its licenses, and essentially crush the competition.>> That is pretty and all, but everybody knows PAST performance does not indicate future success.

      <<Touting things like a cheeerleader for Microsoft about events that may not transpire>> May not transpire? Ah hum! They are transpiring. I guess nearly 1 million paying online subscribers is just a figment of my imagination.

      <<(and for many reasons wouldn't matter if they did) just isn't my style.>> Everybody knows that online gaming is the future of growth, and just because you want ignore ERTS extreme failure with online operations, it doesn�t mean it doesn�t matter.

      It is funny you say cheerleading. Who is the real cheerleader here? You can make good fun of the messenger, but can�t address the facts, they are simply in your own words �not transpiring� �.never happening, just imaginary, non-existant.

      "ESPN series games nearly outsell ERTS across the board on the Xbox."---BK1929

      <<Resop2, I implore you to do a bit of data digging and thinking before believing things like this. >> In other words, I can�t disapprove it, so do it yourself. Last time I was busy and didn�t have time to do any research for you either.

      <<While I don't know whether ESPN games sell better (and not by much if so, i'd bet)>> There you have it�.you �don�t know�

      <<the thing that would concern me about such a statement as bullshitters is this; Xbox is a smudge on the installed base of PS2.>>Now it is time to expose the biggest myth. Fewer Xboxs have been sold than PS2s (It is only natural, it was released over a year later and had ZERO name recognition at the time), but many of those PS2 owners have abandoned their PS2 and bought Xboxs i.e. their PS2 sits on the shelf collecting dust. SO the discrepancy is not that great. For example�Xbox Hit Man 2 was outselling the PS2 version. Soul Calibur, the most wanted fighting game for all systems, again outsold the PS2 version. Xbox gamers are known to buy more games than PS2 owners. Their attachment rate is like 5 or 6 more games a year. That is a market that ERTS has failed to take advantage of.

      • 2 Replies to bullkiller_1929
      • <<Beyond that, there are a larger percentage of Xbox owners who despise ERTS. For valid reasons? Maybe, but I think not.>>

        In business, the customer is always right. If consumers despise EA, there is a reason.

        <<Sales of PS2 and ERTS sports titles in general suggest they are the minority and the type who like to hate the guy (ERTS) on top.>>

        Sales of ERTS sports titles have slouched when compared to the relative number of new consoles e.g�.they sold 5 million Madden last year and 5 million Madden this year, but now this year there is 10 milllion more PS2s out there. Slouching growth.

        <<Being a long time gamer, I will say ERTS offers great quality games, but in terms of innovation ERTS's days in that sunlight are fading into the past. >>

        Being a long time �gamer� what ever the heII that is, doesn�t give you any authority. ERTS� innovation died long ago when started doing the Wall Street scam that CSCO, QCOM, AOL and scam companies adopted�.buying up smaller companies to boost their revenue. In the process they have relaxed their own development and become dependant upon buying other peoples� property. The problem arises when there are no more companies to buy, and they are left to innovate on their own. How was the Sonic and Mario killer doing last time you checked. Remember TY? The Spazmanian Dungpie? What happened to Earth & Beyond? How did Freedom Fighter do? How about even a past winner�.Sims Online? One toilet bowl couldn�t flush down all of these turds.

        <<Still, we all like to eat at McDonald's, don't we? Sad as that may be, that's what will matter.>>

        Another Freudian slip? Tell that to the people who own Xbox and don�t buy ERTS titles. I guess they must eat at Burger King and get served by jerkoff99.

        <<So for me, even if ESPN sports is slightly (check reviews, it's option) better *this* year, it doesn't hold it will be in future years, or that ERTS wont respond inkind with better gamers. Innovation may be at a minimum at ERTS, but refinement is not. And for business sense, well...it's not contest between Sega and EA ;)>>

        By default, you state ESPN is better. That doesn�t matter. The real problem with your statement is assuming that innovation is not as important as refinement or I.E�.RECYLCING. For business, I do agree that ERTS has a stable cash cow for sports titles, but that is it. That 19% of the market. And people�s buying patterns are changing as seen on the Xbox. The monopoly is not forever certain. That is beside the point right now. The real problem is ERTS lack of direction and their inability to make anything online, or to make outside of sports.

        <<ERTS's marketing and name-branding is so strong, that even when a competitor's product is equal of better, they still get crushed.>>

        Short term yes, long term no. Are you sure you never worked for Ford or Chevorlet during the 80�s? It didn�t take long for consumers to figure out that a Toyota Camry or Honda Accord was the way to go. Again, another ERTS long admitting that a competitor�s product is superior to ERTS own and not holding anything against EA, but rather just laughing with ignorance as if their belief were actually true. Da Nile isn�t only in Egypt.

        <<Bullsh*t boy's continued assertion that MSFT will crush ERTS is shameful, given how apparent, as you point out, the crushing of Microsoft is by comparisons of installed console bases>>

        We have already talked the console myth.

    • <<Does anyone have a favorite way to compare Computer Game Software companies against each other?>>

      To answer your question...not on this board. You are better off staying away from these permalongs who are made up of ex ERTS and VG industry employees and want-to-bees. And as you have noticed, they like to ignore people like yourself who want to know something sound and factual. They like to attack individuals and not what they have to say. They use a lot of bash the messenger, and ignore the message tactics. Some are actually paid by brokerage firms that have a large interest in ERTS. They can never address facts, only bash.

      The theory is, you pay a premium for ERTS versus other industry stocks because ERTS is the sector's monopolist. Things are changing though with the new sheriff in town....Microsoft, who is destined to break ERTS' monoply and has done so on the second most used console in less two years.

      This sector, specifically ERTS is not a good stock to get into at this time. Growth has slown tremendously. Hardware sales have gone flat to negative and software sales have only increased 0% to 10%, way below 30% annual growth seen over the years. This is the end phase of the current console cycle, and a very dangerous time to place a bet.

      ERTS was at the peak of dominance concerning market share, but that trend is changing. They planned on going IPO with EA.com, but ultimately had to cancel those plans and hide the accounting under EA Core (EA as we know it) because of all of the losses. The market started to punish them, but with start of the war and the mass amount of artificial injection pumped into the market by the FED, they were able to reverse that course, like every stock in the market. Unfortunately, the FED is running out of bullets and will have to start raising rates within in half year or so.

      Aside from Madden and the Sims, the company really doesn't have any go-to-games. Games like SSX, Medal of Honor and Need for Speed, or any other sports title, are easily countered by the competition (Amped, Call of Duty, Tom Clancy, Project Gotham Racing, Gran Tourismo, ESPN series etc..). Most recently, a lot of their revenue has come from Movie deals. Games like Harry Potter and Lord of the Rings are respectively on their third plus installments, and are easily lost once the movies stop running. Harry Potter alone sold over 9 million copies last year, which accounted for almost as many sales as the ERTS sports lineup combined. This year, that won't be the case as Harry Potter has shipped less than half the amount they sold last year (no movie to push sales). Also ERTS lost a gravy distributing contract of all Square games, the makers of Kingdom Hearts and Final Fanatasy series. That deal alone cost them nearly $100 million in revenues.

      Online operations have been disastrous for ERTS and that is crux of this company's problem. They have no hope at ever making a sustainable profit because they are not a big enough player that can control content like Sony and Microsoft (i.e. they need their own game console). They always talk about the future, but during the present they deny profitability. Well, they have been talking about being profitable for years......and they keep doing so, with never coming through, while Microsoft has nearly 1 million paying subscribers in just a year. With online gaming the fastest growing segment in the industry, ERTS has to pump in money like the FED to keep their operation liquid. Eventually investors will see it is a losing cause and their failures will be scrutinized more and they will be seen as what they really are....a company that makes sports titles only, with absolutely no IP other than the Sims. CONT...

      • 1 Reply to bullkiller_1929
      • "Things are changing though with the new sheriff in town....Microsoft"

        ---The fact that this hasn't and isn't happening (never mind bulls long history of losing money shorting ERTS) should tell you something. I work a lot, and i'd throw out the data you're looking for if I had the time to do so, Resop2. The fact of the matter is ERTS has been proven time and again to beat estimates, maintain interest by the public in its licenses, and essentially crush the competition.

        In a nutshell my own sense of long or short is based upon some of the traditional measures you indicate, but it goes beyond that in that I look at how many platforms a given title will be released on (and the installed base of said platforms), historical sales of said title if it's a sequel, public interest in the property (Need for Speed, whatever), previews, public interest in the media release a game that's yet to be released is based on (i.e. Lord of the Rings, Harry Potter, you get the idea), friends want lists, etc.

        To put it simply, some hard pounding footwork + the traditional data sets (P/E, industry analysis, etc.) is how I go about things. And this is what I do whether it's video games, hard drives, or any other stock. Try and cull your own data that is between the lines of what analysts put out, or isn't even broached in news items. You can always go wrong (I have once in this sector), but in general that's my methodology. Touting things like a cheeerleader for Microsoft about events that may not transpire (and for many reasons wouldn't matter if they did) just isn't my style.

        Good luck to ya :)

    • People talk about Rockstar being a one trick pony. If they are a one trick pony, ERTS is a half trick pony. Sports can't rule the entire market. ESPN series games nearly outsell ERTS across the board on the Xbox. Partly that is due because they are online compatible, which means no one gives a flying **** about EA IP (They say Madden who?). Gamers want to play online. Period. That is the future, right there, and is ERTS' greatest failure.

      Remember now ERTS losers....attack the messenger and not the message. Good paid-pumpers...now type type. (I love feeding these trolls)

      • 1 Reply to bullkiller_1929
      • "ESPN series games nearly outsell ERTS across the board on the Xbox."

        ---Resop2, I implore you to do a bit of data digging and thinking before believing things like this. While I don't know whether ESPN games sell better (and not by much if so, i'd bet) on Xbox, the thing that would concern me about such a statement as bullshitters is this; Xbox is a smudge on the installed base of PS2. Beyond that, there are a larger percentage of Xbox owners who despise ERTS. For valid reasons? Maybe, but I think not. In numbers that will grow over the years? Sales of PS2 and ERTS sports titles in general suggest they are the minority and the type who like to hate the guy (ERTS) on top.

        Being a long time gamer, I will say ERTS offers great quality games, but in terms of innovation ERTS's days in that sunlight are fading into the past. Still, we all like to eat at McDonald's, don't we? Sad as that may be, that's what will matter. So for me, even if ESPN sports is slightly (check reviews, it's option) better *this* year, it doesn't hold it will be in future years, or that ERTS wont respond inkind with better gamers. Innovation may be at a minimum at ERTS, but refinement is not. And for business sense, well...it's not contest between Sega and EA ;)

    • Based on your post I can only assume you've been shorting since $94.00 :)

      "Hell, anyting above split adjusted $40 would be a gift."

      How does it feel to be wrong and underwater...yet again?

    • Wow, that's really help MSFT and hurting ERTS /sarcasm. I'd say it's hundreds of millions of dollars MSFT threw down the toilet.

    • Is that the same company in the other corner that TRIED to enter the ISP market years ago and still cannot come close to the lead---hmmmm wow what a monopolist--- speaking of that, the feds keep their eyes on monopolies--unfortunately lots of money spent on lawyers--like in Europe--LOL cha ching

    • <<Wow, that's really help MSFT and hurting ERTS /sarcasm. >>

      I never said it was hurting ERTS. I was just pointing out the fallacies in your one-way thinking, which is when ERTS buys a studio, it is a "great" acquisition, while when MSFT buys one, it is "throwing money down the toilet." Your inability to see outside your ERTS blinders is sad.

      <<I'd say it's hundreds of millions of dollars MSFT threw down the toilet. >>

      I'd say it is a great step towards adding a quality developer to MSFT's game studios.....not to mention the fact of taking one away from Nintendo. It is just another testament to MSFT's commitment to being a dominant player in the VG industry.

      MSFT is for real....they are not a fad.....and ERTS should be very concerned about having the world's biggest monopolist and dominant software company in the other corner, putting on its' gloves.

    • you really are cluless

    • " I was just pointing out the fallacies in your one-way thinking, which is when ERTS buys a studio, it is a "great" acquisition, while when MSFT buys one, it is "throwing money down the toilet."

      ---It wasn't me that said that. What's wrong with you? All I said (chiming into the conversation between you and jamok [in case you still are unsure who originally said that]) was that Rare has so far been blown money. What was it, $400 million or so? For what? Nothing. Better to hand Rare $50.00 to make a couple exclusive games for Xbox. MSFT was just throwing money around like a gorilla throws his poop around. There were better ways for MSFT to go about acquiring a Rare game, which as I've said there still isn't a Rare game on the Xbox.

      MSFT should be very concerned about a lot of things. ERTS's only concern is staying on step ahead of the competition. Luckily MSFT isn't in that competition lol.

    • <<More to the point, what has Rare done for Xbox so far? ;) >>

      Eliminated any possibility for a Rare made game to ever appear on a Nintendo game console. ;)

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