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Electronic Arts Inc. (ERTS) Message Board

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  • xtgeminiman Nov 29, 2012 3:07 PM Flag

    Good time to short?

    EA is widely known to phone it in to meet deadlines, release the same game with little changes and run acquisitions into the ground (Bioware comes to mind).

    Their balance sheet is hideous. They are burning through cash and adding debt and making it up with "goodwill". G&A and development costs have skyrocketed while R&D has gone down. Not good for a game company.

    Too many tailwinds in this industry. Gamers expect more for the same price. Development costs are rising while the volume of games sold is declining. I remember my mom paying $40 (sometimes $50) for an NES game 25 years ago that was made by 10 people. You can't do that anymore.

    This is a tough industry where a couple mistakes can sink an entire company. SWTOR isn't going to bury EA but it's tough out there.

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