I don't believe for a minute that ERTS dropped today because Microsoft is entering the video gaming console business. That may be the excuse (though I doubt even that), the reason is that ERTS broke down on the hourly chart.
That huge trade (read sale, not buy) must be somebody who trades on the technicals. It was made just after the trend line was clearly broken. The guys who buy on fundamentals kept buying, so the price didn't drop right away, but there was no stopping it in the last half hour. Another big volume down day and MACD (histogram) down on hourly, daily, AND weekly charts says that the move is now down, and that's how the traders will likely play it. If I can work up the nerve, I'll play it that way myself.
Doesn't mean that the stock is broken yet, because it is still okay on the daily chart, and it is very encouraging for the bulls that we didn't go below 71.5 today. Could go either way tomorrow. There's room to move up to 78+ and room to move down.... well, let's just say that there's a lot of room after that huge run up off 60+
Perhaps there was a little disappointment today that Sony confirmed Playstation 2 for March 2000 in Japan, not the rumored 1999 ship. Again, that's just an excuse in my book.
do just one thing, drive prices of games down to meet PC game prices. Personally, I don't like MSFT games nor think Windows is a superior product. They have a big following, big name and are expanding. All they are going to try to do is flood the market, buy shelf space. It just means more competition and a company like EA thrives on this and will have no problem surpassing even MSFT for quality.
BTW: last 10 ERTS transactions were all buys. I expect it to drop more tomorrow but it shouldn't send any investors in a panic
Maybe fear of Dreamcast success had something to do with the selloff today. COMP USA was apologizing in my Sunday paper for selling out on consoles and games and having to turn people away. Sega has many months to gain a foothold. EA wouldn't make a nickel off it since they aren't developing for it.
Anyhow, some profit taking was about due. This stock has never been volatile only on the upside.
I often forget that the average ERTS investor (including the funds) understands less than we do about what can happen in the game market. Seems to me everyone should have been expecting a strong Dreamcast showing since E3, when everyone was surprised how good it looked and how much support it had with solid games.
Now that Dreamcast has shipped and confirmed it isn't an outright dud, EA may look silly for having nothing on it. And then Sony is pricing PS2 at $375. Yikes. Good thing it's a DVD player and more. Of course, I don't honestly expect it to ship at $375 in the US next Christmas. That feels like such a long way away, doesn't it? Still, gotta say, I trust the folks at EA to make the right decisions on this one.
Anybody know how the new Final Fantasy is doing in the stores here? Certainly didn't stop anyone from buying Dreamcast.