Electronic Arts Inc. (ERTS) Message Board
-
They have already confirmed that the discs are worthless as soon as the game is installed. Obviously you can't simply sell that disc to GME 5 minutes later, that would be insane for MS to allow. Hence the daily DRM console check. Any license resale opportunity is entirely at MS discretion. They can choose to allow such a thing or not allow it, at any time. If they allow a third party like GME to get a cut, it's a cut of MS choice and at their discretion. Best case scenario, reduced margins for GME.
Don't think PS4 will save GME either. You can bet publishers will ship games with codes in the box so those discs are also worthless after activation.
Then there's the high expectation all games will be midnight available on digital, unlike the current situation. -
Management didn't buy a single share with company buyback funds over $25. They won't buy shares with their own money, and they won't even buy shares with company money, because they believe it's too expensive.
-
Once you have installed and activated the game, the disc is no longer needed. If you take it to a friends place it will be installed on his HDD and then he can buy it with one button click later if he wants. Any potential business with license resales is still TBD but best case scenario it will not be kind to GME's margins, and could be subject to change by MS at any time. Worst case, there is zero used market for XB1.
PS4's strategy is still TBA, but I expect several pubs there will ship one time only activation codes with the disc, so those discs will also be worthless.
All XB1 games will be available digitally at midnight on day of release.
So it isn't just the likelihood of MS and Sony taking more digital sales of new games, the implications for the used market look dire. -
(and probably the first time you go to play I game I expect)
Kotaku: If I’m playing a single player game, do I have to be online at least once per hour or something like that? Or can I go weeks and weeks?
Harrison: I believe it’s 24 hours.
Kotaku: I’d have to connect online once every day.
Harrison: Correct. -
Negative for whom? For GME, not necessarily for MS. You can't trade any games bought for Android, iOS, Steam, Origin, etc. They are all doing great.
-
The story was updated to say they "have a plan for used games", it does not specify there will be no fee.
-
Looks like the analysts with their recent frantic and blind PT upgrades successfully gave some cover to their clients to exit.
-
The analysts are in someone's pocket. Why else would they upgrade after the stock spent a week stalled in this 38-40 range after a big run, and *before* key information events like Xbox reveal and earnings? The only reason for that is to manipulate the stock price, which means they are in someone's pocket. They are so brazen about it too, like they aren't even bothering to hide their motivations.
-
His $72 price target on GME at the start of the current console cycle didn't pan out well, but maybe the kool-aid is still strong, while EA marches on to 50% of revenue from digital and the upcoming consoles push digital sales from their own platforms more than ever before.
-
Long term I'm bearish. I'm a big believer in the digital future and think both Sony and MS are targeting more digital sales in the next cycle. They're going to make it easier and faster for gamers to buy online. Short term though, the bullish uptrend has been incredible. Short interest is much lower than months past but it's still high, so while I think we'll see low $30's this summer, I wouldn't rule out $45 in the short term either. I'd suggest not adding to any short, wait for a clear sign of a breakdown, then resist the urge to cover too early.
-
You see short interest at the nasdaq site. Last update 2 weeks ago short interest was 39M, around 33% of float, compared to 60M, about 50% of float, 1 year ago.
GME hasn't bought shares above the $25 level ever, AFAIK. I doubt they're buying here. We'll see in the Q1 update soon. -
The last time they beat the high end of their own guidance was 7 years ago.
In 3 of the last 5 years they forecast non-GAAP of at least $1.00 and missed by a mile each time.
Last year they forecast $1.20 and delivered $0.84. This year they forecast $1.20 again.
Over the last cycle, the last 7 years, EA forecast a total non-GAAP profit of $6.57 and delivered a total of $4.37, i.e. an average miss of 33%, and an average non-GAAP EPS per year of $0.62. If you include their annual restructuring costs, it's much lower.
The new guidance is believable though? This time it's different, unlike the last times? -
Stock rises 40% in a month on poor guidance. Then analysts quietly lower their forecasts.
EPS Trends Current Qtr. Apr 13 Next Qtr. Jul 13 Current Year Jan 14 Next Year Jan 15
Current Estimate 0.40 0.08 3.10 3.68
7 Days Ago 0.40 0.08 3.10 3.68
30 Days Ago 0.42 0.09 3.17 3.72
60 Days Ago 0.56 0.21 3.42 3.73
90 Days Ago 0.57 0.21 3.38 3.81 -
Why isn't it higher, with so much great news lately?
1. Retail sales are in the crapper.
2. Nintendo now selling refurbished hardware cheaper than GME, like 3DS for $130 compared to GME's $160.
3. PS4 and 720 likely not backwards compatible, which means all of GME's used inventory is about to take a hit.
4. 720 likely always online, which means used sales are at risk and makes it very easy for MS to push content to gamers.
5. Sony and surely MS will be targeting online game sales on their consoles, i.e. taking marketshare from GME.
6. Has GME ever bought its own shares above around the $25 level? In the last few years GME has needed share buybacks to keep flat growth in EPS, will they spend a lot more to buy shares $10 higher than they used to?
7. Macro data isn't bullish, not exactly the best environment to hope customers throw down $500 to upgrade hardware.
On the positive side, we have:
1. The stock has been going up, therefore it must go up forever, like everything else does and this time it's different.