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Does EA Have the Economy to Blame or Itself?

Posted Dec 10, 2008 05:38pm EST by Sarah Lacy in Investing, Gaming, Internet, Recession
So much for that "cocooning" theory that games would be the protected part of the tech economy this holiday season. Electronic Arts warned investors today that it would miss its fiscal 2009 targets, given lackluster holiday sales.

But is this a problem with gaming or EA? My guest Om Malik, of GigaOm, blames EA, and it’s reliance on big, expensive Hollywood-style games, instead of more nimble social, mobile or Wii games. "We give them too much credit for being smart just because they are big," he says of the second largest game maker. Ouch.

More on how EA could, ahem, get back in the game on the clip.

23 Comments

DanielW
DanielW - Wednesday December 10, 2008 06:39PM EST

ERTS is not representative of the video game industry, and hasn't been for some time. ERTS pain is due to Nintendo and Activision's gain. Nintendo recently reported stellar Wii sales in the US--800,000 the last week of November, which is a staggering number. None of the top ten games is made by ERTS. ERTS management says it's happy with the quality of their games, but game reviews from critics and gamers suggest otherwise (see Gamespot or IGN ratings). The fact is that video games and consoles are at the top of Christmas wish-lists, and all reports suggest that video game and console sales are strong. The video game industry is indeed recession proof, as we saw in 2001. But ERTS is not recession proof, because their games just plain suck.

glu
glu - Wednesday December 10, 2008 08:09PM EST

spot on as usual om

Pooper
Pooper - Wednesday December 10, 2008 09:45PM EST

I wish EA would make fun games instead of the $60 games. Come out with less expensive more fun games.

Pat
Pat - Wednesday December 10, 2008 10:31PM EST

There is nothing wrong with being "big", and scooping up other, nimble and creative smaller companies and integrating them into ERTS. In fact, it may be possible to yield better returns by doing this, especially when share prices are modest. Ah, like now.

Geoffrey
Geoffrey - Wednesday December 10, 2008 11:52PM EST

Seems to me that at it's current price, ERTS is a bargain.

__A_YAHOO_USER__
__A_YAHOO_USER__ - Thursday December 11, 2008 12:04AM EST

Gamers waste lots of PRECIOUS TIME.......get off your ARSES

Kimnkowtown
Kimnkowtown - Thursday December 11, 2008 12:50AM EST

Got a problem with an EA game? Good luck figuring out how to tell them. They are totally unlike Activision and unresponsive to customer concerns. Their game like Mercenaries 2, Army of Two and Burnout Paradise were total flops. The Battlefield series had great promise but was overun by cheaters and troublemakers and no amount of compaining by faithful users was heard. EA deserves everything it's getting, It's just a crying shame that they are dragging others like Activision down with them.

Alex
Alex - Thursday December 11, 2008 01:04AM EST

To the person who said EA games are got getting reviews and referenced Gamespot. I was just doing some research at that exact site last night and several of EA's games got very good reviews. The games with the highest reviews were "Left For Dead" 8.5 Gamespot review out of 10, user reviewsfor this game were even higher at 8.9. "Dead Space" 9.0 Gamespot score (Editor's Choice), user score for this again higher at 9.1. Those two are brand new games from EA, some other well known games are "Burnout Paradise" and "Mass Effect" both getting Editor's Choice and a 9.0 rating. Rock Band is another huge hit from EA getting once again a 9.0 and Editor's choice. NHL 09 another 9.0 and Editor's choice. These are all from a site you said to check for "bad" reviews. As you can see they are getting very good reviews on many of their games.

Alex
Alex - Thursday December 11, 2008 01:06AM EST

To the person who said EA games are got getting reviews and referenced Gamespot. I was just doing some research at that exact site last night and several of EA's games got very good reviews. The games with the highest reviews were "Left For Dead" 8.5 Gamespot review out of 10, user reviewsfor this game were even higher at 8.9. "Dead Space" 9.0 Gamespot score (Editor's Choice), user score for this again higher at 9.1. Those two are brand new games from EA, some other well known games are "Burnout Paradise" and "Mass Effect" both getting Editor's Choice and a 9.0 rating. Rock Band is another huge hit from EA getting once again a 9.0 and Editor's choice. NHL 09 another 9.0 and Editor's choice. These are all from a site you said to check for "bad" reviews. As you can see they are getting very good reviews on many of their games. And to Kim, Burnout Paradise was FAR from a flop. Have you actually looked at the sales numbers and reviews?

Alex
Alex - Thursday December 11, 2008 01:07AM EST

To the person who said EA games are got getting reviews and referenced Gamespot. I was just doing some research at that exact site last night and several of EA's games got very good reviews. The games with the highest reviews were "Left For Dead" 8.5 Gamespot review out of 10, user reviewsfor this game were even higher at 8.9. "Dead Space" 9.0 Gamespot score (Editor's Choice), user score for this again higher at 9.1. Those two are brand new games from EA, some other well known games are "Burnout Paradise" and "Mass Effect" both getting Editor's Choice and a 9.0 rating. Rock Band is another huge hit from EA getting once again a 9.0 and Editor's choice. NHL 09 another 9.0 and Editor's choice. These are all from a site you said to check for "bad" reviews. As you can see they are getting very good reviews on many of their games. And to Kim, Burnout Paradise was FAR from a flop. Have you actually looked at the sales numbers and reviews?

Alex
Alex - Thursday December 11, 2008 01:08AM EST

To the person who said EA games are got getting reviews and referenced Gamespot. I was just doing some research at that exact site last night and several of EA's games got very good reviews. The games with the highest reviews were "Left For Dead" 8.5 Gamespot review out of 10, user reviewsfor this game were even higher at 8.9. "Dead Space" 9.0 Gamespot score (Editor's Choice), user score for this again higher at 9.1. Those two are brand new games from EA, some other well known games are "Burnout Paradise" and "Mass Effect" both getting Editor's Choice and a 9.0 rating. Rock Band is another huge hit from EA getting once again a 9.0 and Editor's choice. NHL 09 another 9.0 and Editor's choice. These are all from a site you said to check for "bad" reviews. As you can see they are getting very good reviews on many of their games. And to Kim, Burnout Paradise was FAR from a flop. Have you actually looked at the sales numbers and reviews?

Alex
Alex - Thursday December 11, 2008 01:09AM EST

To the person who said EA games are got getting reviews and referenced Gamespot. I was just doing some research at that exact site last night and several of EA's games got very good reviews. The games with the highest reviews were "Left For Dead" 8.5 Gamespot review out of 10, user reviewsfor this game were even higher at 8.9. "Dead Space" 9.0 Gamespot score (Editor's Choice), user score for this again higher at 9.1. Those two are brand new games from EA, some other well known games are "Burnout Paradise" and "Mass Effect" both getting Editor's Choice and a 9.0 rating. Rock Band is another huge hit from EA getting once again a 9.0 and Editor's choice. NHL 09 another 9.0 and Editor's choice. These are all from a site you said to check for "bad" reviews. As you can see they are getting very good reviews on many of their games. And to Kim, Burnout Paradise was FAR from a flop. Have you actually looked at the sales numbers and reviews?

__A_YAHOO_USER__
__A_YAHOO_USER__ - Thursday December 11, 2008 02:07AM EST

too much technology too much confusion,too much greed........

DanielW
DanielW - Thursday December 11, 2008 02:55AM EST

w_c_o_m is clearly in denial. If you look at all the games EA has made recently, compare them to the recent games of competitors (last 12 months), compare ratings (all of them--don't just cherry pick, as with movies, somebody, somewhere will give a high rating to a lousy game), then you will see that EA is not the video games leader. They are third, after Nintendo and Activision for November in the US (according to VG chartz). The main issue is whether ERTS performance is representative of the video game industry and how well that industry can perform in a recession. My contention, based on the facts I cite, is that ERTS is not the leader and, therefore, not an indicator of the health of the industry as a whole. Those facts remain unchallenged.

NewGenGamers.com
NewGenGamers.com - Thursday December 11, 2008 07:19AM EST

Electronic Arts can blame themselves. They have plenty of great games, franchises, and licenses. I think Om Malik put it best saying big doesn't work. EA has tried to be the powerhouse, and has succeeded, but that adds a lot of waste to the mix. Activision-Blizzard is much more stable at this point, and has existed just as long as EA. Both are very comparable, but ATVI does it with a lot fewer releases that are a lot higher quality. EA has themselves spread across all genres, consoles, and consumer groups, but fails to be especially compelling with the large amount of regurgitated series they try to push out the door. I think they need to take a hard look at themselves and restructure to be a contender against the wise ATVI and Nintendo.

__A_YAHOO_USER__
__A_YAHOO_USER__ - Thursday December 11, 2008 07:31AM EST

It all our faults we let debts accumulate with-out considering the Income Ratio........Old people,probably our father or even great great granfather are keen to save for rainny days......But we spend, spend like Hollywood Star even we are at point of overdrafts........That our behaviour today......We need to learn and still not too late......If we does it will good for us and for the future not only to ourself but also to others.....To be... honest, .. we need a change in our way of life......

Yahoo! Finance User
Yahoo! Finance User - Thursday December 11, 2008 08:05AM EST

Well let us see! The real first question is: If credit (banks) were available, would we be even talking about this?

Yahoo! Finance User
Yahoo! Finance User - Thursday December 11, 2008 11:03AM EST

Why are people talking about debts and savings on an article about video games? Talk about living in your own bubble...

Ray Fun Relax
Ray Fun Relax - Thursday December 11, 2008 11:03AM EST

I agree that "Small" is better than "Big". The USA's strength is "Individualism" NOT "Socialism", NOT "Big Conglomerate Corporations", NOT Big Government programs. The US Patent & Trademark office is the most important department and the least talked about & the most under valued and the most under funded of all other segments of the USELESS huge government conglomerations.

Ray Fun Relax
Ray Fun Relax - Thursday December 11, 2008 11:03AM EST

I agree that "Small" is better than "Big". The USA's strength is "Individualism" NOT "Socialism", NOT "Big Conglomerate Corporations", NOT Big Government programs. The US Patent & Trademark office is the most important department and the least talked about & the most under valued and the most under funded of all other segments of the USELESS huge government conglomerations.

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