I already own ATVI. The main problem with it is its market cap. Its really large. 3-4 times ERTS's. That's going to limit the upside. ERTS is doing the right things right now to steer its ship in the correct direction. Its a big ship and it takes a lot of effort to steer a big ship. I see more room for improvement on the ERTS front, which translates to more growth potential which translates to more PPS increases as a fraction of your investment. If you don't see it, fine, but maybe you are the one who lacks innovation. Its not a battle of who is the better company. ATVI is clearly the better company at the moment.
No Monk Not the ignore button!!! Nooooooo.
And to Iraj, I'm not emotionally invested in ATVI. On the contrary, I'm looking at this strictly from a technical and fundamental standpoint. Emotion didn't cause ATVI to crush their earnings today amid a whirlwind of fear and uncertainty. Whether the stock moves up or down tomorrow is out of my hands, but it certainly won't be for a lack of understanding on my part. ERTS pumpers on the other hand are the truly delusional ones. Even if they fail miserably on earnings you guys will still be spewing the same old rhetoric about how they're cutting costs and will inevitably return to profitability. Why not just invest in an undervalued and already profitable company right from the get go?
You can't teach someone who seems to emotionally involved in the belief that ATVI will do well but ERTS will not.
I agree with your points, though. I recognize that right now, ERTS has cut a lot of expenses and has put a lot of effort into releasing good quality/non-licensed games. In time that will pay off. The thing killing all publishers right now is the sector itself. So you can pretty much own any of them, ATVI,ERTS, TTWO, etc and do well in a few years.
I agree with where you're coming from but at the same time "innovation" doesn't necessarily mean profits! That's the name of the game in this industry and ERTS is adjusting itself accordingly. They really became the 500 pound gorilla in the industry which came back to bite them in the ass. They got to BIG which resulted in the stock price they have today. Will they ever recover to those lofty 50-60 dollar prices? Probably not. But they will definitely recover some of that.
I think Battlefield was also doing well for them. EA's earnings have been disappointing for a while, so I won't keep my hopes up . It seems like at some point it should turn.
The drop in all stocks seems to have been exacerbated through a trading glitch involving shorting P&G for over a billion shares when the person wanted to only short a million.
Dude, you are coming close to my ignore button. Obviously you really like WOW and COD. I am not into online gaming or MMORPGs. You are. I finished CODMW2 in about 3 hours. The graphics were good but that was about it. I am not going to spend $60 on 3 hours of gaming entertainment. I have been playing Borderlands (TTWO)for weeks. Dragon Age 80+ hours of entertainment. ME2 about 60 hours. And read before replying, I was using ATVI and innovation in the same sentence.
Innovation: ME2, Dragon Age, Spore just to name a few. What NEW game has ATVI created recently? That is innovation. Don't be such a EA hater, just look at it objectively.
Please.... don't ever use the words "EA" and "innovation" in the same sentence again. Mass Effect 2 is an XBOX-only title and isn't even a blockbuster title to begin with. Dragon Age? Really?? ATVI may not be the most innovative company in the industry, but they make money and know how to do business. Isn't that what's important when you invest in a company?
ERTS has much smaller market cap and has room to grow (to get back to the mean). ATVI has much higher market cap and all of its games cannot be MW like sellers (who they completely messed up the development studio by the way).
>> ERTS has much smaller market cap and has room to grow (to get back to the mean). ATVI has much higher market cap and all of its games cannot be MW like sellers (who they completely messed up the development studio by the way).
Market cap has absolutely nothing to do with a company's growth prospects. Sure, ERTS has more room for improvement, but that's only because they're losing money while ATVI is actually making money. And no, not every game will sell like MW2, but have you ever heard of these obscure games like Starcraft 2, World of Warcraft, Diablo 3, Call of Duty Black Ops? My bet is each one of these games will sell better than any of the crap EA releases the rest of the year.