Electronic Arts made an announcement in December that their sales aren’t doing as well as expected. Recently, they dropped the bombshell when they posted total revenue of $1.65 billion instead of the $1.9 billion expected. Hence, Earnings Per Share increased by only $0.56 instead of the expected $.088.
With the tough competition out there, EA seems to repeatedly churn out various versions of Need for Speed, Sims and the dozen other Command & Conquer games. Surely gamers are getting bored and moving on to other exciting games like Fallout 3, Fable 2 and so on.
So what does EA now do? Focuses on the Wii. After it’s plan to cut 1,100 people (11% of total staff), close down 12 studios and reduce the number of game titles it publishes, EA said it’s dedication is now on the Wii.
EA’s CEO John Riccitiello stated that his business has 3 different areas to fulfil -
Combined PS3 & the Xbox 360? Hmmm… this is going to make it interesting for Microsoft and Sony given that they both like to have exclusive rights to certain games and if EA is going to combine these two categories, then console makes of the PS3 and Xbox360 will have to re-think their premium pricing (or go to another gaming developer)
Wii has great market share, and hence I can see why EA needs to capitalise on it. It can make games like Tiger Woods Golf, Tennis, various Need for Speed racing and so on. However, we’ll have to see how well EA integrates with the Wii – because unlike the Xbox360 and PS3, where some training time is needed before play, Wii should be a simple pick-up-and-play. Ideally you want your mother to pick up a Wii remote and start playing golf that easily.
In an article that I read, it said that recently more and more people (mainly American focused) are eating junk food because its cheaper than buying groceries and cooking it yourself.
But, when you take video games as an example, there are no cut backs.
However, that doesn’t mean we go trigger happy (pardon the pun) on giving our cash away. Yes, gamers are spending, but they are spending wisely. Because it’s no longer about just buying games and stacking them up – instead it’s about buying games that will have weeks worth of fun with.
In 2005, the top 20 titles accounted for 11% of games sold that year. In 2008, that rose to 18%. Similarly, compare 2008 Nintendo Wii’s game sales – where it’s top 10 titles account for 44% of the games sold for that console.
While this means that bigger companies like EA, Ubisoft, Microsoft Game Studios and so on will have a stable income, the smaller ones will eventually get bought out. Their games will be taken by the likes of EA, improved upon and then advertised in the market at a much higher spend than they could afford.
Case and example, Lionhead Studios (maker of Fable & Fable 2) got bought out by Microsoft in 2006. It’s an example of taking the first part of Fable, improving it – and then marketing it pretty well. May we will see bigger gaming companies swallow the smaller ones for creativity.
In the meantime, expect people to spend on games like Fallout 3, Fable 2, Grand Theft Auto, Guitar Hero and so on – because there is so much more to explore compared to buying Forza (I did 5 races and gave up!).
Fable 2 creator, Lionheart studios has launched a new premium expansion as of the 13th January.
I am yet to download Fable 2 – Knothole Island Expansion, however, for those who are looking to get back their lost dog, you can now do so.
Thanks to Leroy who made a comment on the previous post, you can now get back your lost dog by sacrificing a human being in the little graveyard of this new expansion!