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!).
Come November 19th and Microsoft will unleash it’s new Dashboard to all XBOX 360 consoles.
It is expected to be completely brand new and different to the existing “blade” theme that we current 360 gamers use. Microsoft names it “The New Xbox Experience“.
Users can create avatars to represent themselves when online (similar to the Wii). Like the screenshot below, users can choose a “base avatar” and customise it from there. It is assumed that new customisation features (like clothing & accessories) will be added on in the future to enable more variety.
The new Dashboard system apparently also loads the entire game on to the Hard Drive for quicker loading and play time (however, the original DVD must still be in the drive).
The new dashboard also connects to Netflix for video content (not sure if this will have limitation in certain countries).
Microsoft seems to geared this new Dashboard towards a social networking environment as well as pushing it’s Marketplace content. Both would be revenue streams for them.
Hopefully this system will take off by the most frequent 360 gamers, though be prepared for the usual criticism.