The stock is close to $47 and you are worried about a stupid WCW license? EA is close to being a billion dollar company and I hardly think that a 5-10 million dollar license will have any bearing whatsoever on their balance sheet at the end of the day. I think it was a good strategic move. Wrestling is the only major sport EA has zero market share in. Why not get the best license (exclusively) and basically lock out your competition? Worrying about this license is petty stuff in the overall scheme of things. Let's move on to more important issues like PE ratios, possible takeover targets, etc...
BigBull98: I agree that compared to EA's size, a contract like WCW couldn't mean much to the bottom line. There are much more important things to look at.
But, I look at a transaction like this for signs of stupidity. If they pay way too much, it may mean that no one is watching the store, and watch out! In this case, I trust that they did the right thing, but I WOULD feel more comfortable if I knew the number.
Possible takeover targets...? Hmmm. With this stock price, that would be a VERY interesting possibility. They've been good at this in the past. Though I'll be interested to see how their March quarter numbers look with the added expense, but apparently no new big products, from Maxis. I sure hope they deliver.
>Though I'll be interested to see how their March quarter numbers look with the added expense, but apparently no new big products, from Maxis. I sure hope they deliver.
I came into my ERTS stock through Maxis and I think it will have a big impact on the company. They are expected to release SimCity 3000 soon which will be one of the best video games of the year, not to mention a revenue booster. Granted Maxis is small, but the SimCity games accounted for half of their revenue, and I imagine that the newest will do a little more.
The thing that worries me is where will ERTS go in the long run. International sales already account for half of their sales, so where can they expand to? I think asking for more than half is asking too much as they already have major positions in the US and Japan, the two biggest video game markets out there.