What´s happening with EA???

[Arqueologia_Digital]

I can´t believe this when i had read this notice (sorry if this topic exists)...

EA breaks $3 billion in annual sales, but Q4 is a bust

After prepping investors for the worst, EA delivers quarterly revenues close to adjusted guidance; Sims and NFS sell well, but full-year profits sink. CFO calls quarter "an earnings disappointment."
Six weeks ago yesterday, Electronic Arts stunned investors with a hastily arranged conference call. In it, EA CEO Larry Probst alerted the Street that revenues for the fourth quarter--the one that ended March 31, 2005--would be sharply lower than anticipated. Probst girded Wall Street for an anticipated $100 to $150 million shortfall.


Today, the other shoe dropped in Redwood City--but not as far as it might have.

Fourth-quarter revenue for Electronic Arts tallied $553 million, down 8 percent compared to the same quarter a year ago. EA said sales during the quarter were driven by strong sales of The Sims 2, NBA Street V3, Fight Night Round 2, Need for Speed Underground 2, FIFA Street, and TimeSplitters: Future Perfect.

Net revenue for the full year ending March 31, 2005, was $3.139 billion, up 6 percent from the previous year's $2.957 billion. EA reported a profit for the full year of $504 million, off more than $70 million from the previous year's earnings. Profit during the fourth quarter was just $8 million. In an earnings call held after the markets closed today, CFO Warren Jenson called the numbers "an earnings disappointment."

However, this was the first time ever that EA's annual revenues surpassed $3 billion.

EA said it had 31 games that sold more than a million copies during the fiscal year and six franchises that sold more than 5 million: The Sims, Need for Speed, Madden NFL Football, FIFA, The Lord of the Rings, and Harry Potter. The Sims franchise sold more than 16 million games across all platforms during the year, with the Need for Speed franchise selling a whopping 15 million copies.

In after-hours trading, shares of EA were down more than 8 percent; the share price had been up 45 cents to $52.90 in regular trading earlier.

By Curt Feldman -- GameSpot
POSTED: 05/03/05 01:59 PM PST

Matías

[AFGiant]

Hm. Maybe people don't like monopolies...?
Actually, my brain has become roughly the consistanc of tapioka because of AP tests right now, so I can't actually offer a valid opinion. Still interesting though.

[felix]

I have 2 guesses.. 1st, $20 ESPN games that are just as good if not better than their ea counterparts, 2nd guess is that they havent really come out with anything new this year.. it was all sequels (and you all know the rule with sequels.. they rarely do as well as the original). NFSU2, NFL Street 2, The usual yearly installments of sports-sims with no upgrades other than the rosters and maybe a few new animations. Things are getting old with modern gaming.. No big innovations have been bad this last year and the market is aching for it.. There have been a lot of good games, but there really wasnt 1 game this year that took gaming to a new level. I have had this conversation in other forums and I have gotten a lot of pissed off people saying "HELLO!!! HALO2!!!!" (same game as the first, 2 guns..) or "GT4!!" But if you look at it, there arent any new innovations that are going to set the bar for other racing games. Now back to the EA discussion, the sports games this year didnt do much.. in my honest opinion, I think that the biggest thing to happen to sports games is the pitching system in MVP baseball.. which wasnt much. Arcade Sports games have come and will soon die like they did 10 years ago with the NBA Jam collection... As for the other EA games, well.. its more of the above.. No new innovations, no new "Chorno Triggers", "Half Lifes" or "Quakes"... the market is waiting, hopefully SOMEBODY will do something..

[sharp]

I think that the didn't innovate enough. The current EA-frachises do remeber me to the 16-bit area when the brought you almost the same FIFA every year, except some minor changes.

On the other hand EA has more then enough money to buy ome innovative company again as they did with Maxis. So if they need some inspiration they will just buy some other studio I think.

And if they ever go bankrupt, I won't miss them.

[Promophile]

Eh its no big deal, they still made a shitload. They just did "stock market bad" which is VERY different than regular bad. If a company makes 1 billon dollars last year and only 1 billion dollars again this year their stock prices would go DOWN! The stock market is based on continued growth growth growth and expansion. Thats why you can have a company with GREAT revenues like McDonalds have their stock drop so much, they are just so damn big they can't expand much anymore.

[Griking]

Hm. Maybe people don't like monopolies...?
Actually, my brain has become roughly the consistanc of tapioka because of AP tests right now, so I can't actually offer a valid opinion. Still interesting though.

I'm sure that I'm in the minority but I know that I try to make a concious effort to not purchase EA games. If there's an EA game that I really want for whatever reason I'll only purchase it used so that EA won't profit off of me.

As far as not making as much as they hoped to for the quarter, I'm sure that paying a few billion of dollars for the NFL, EPSN and College Sports licenses had something to do with it.

[WanganRunner]

Exactly, because anticipated growth is already priced into the stock, so when it doesn't happen, it leads the investors who are anticipating growth to believe there won't be any, and they then get out of the security, which, in essence, de-prices that expectation out, hence lowering the stock price.