Electronic Arts Announced 3rd Quarter Results (January 25, 2005)

[ChrisReid]

Although the final fiscal year tally is three months away, today's quarterly results are big because of the holiday season. For the quarter that ended December 31, EA's net revenue came in at US $1.4 billion, actually a 3% decline on last year. They had a dozen titles sell over a million copies during the quarter, bringing the number of platinum sellers in the year to 27. Need For Speed Underground 2, released just two months ago, has sold more than 8 million copies alone. Final year-end figures in March are expected to come in around $3.3 billion, which would represent a 10% total increase compared to 2003. Complete figures can be found here.

In related news, to counter EA's recent exclusivity deals with the NFL and other sports authorities, Take Two has succeeded in signing a seven year exclusivity agreement with the MLB players union. Although there are some exceptions, this could essentially shut down EA's MVP baseball franchise beginning in 2006. GameSpot is carrying a story where EA's response calls this a "stupid money" expense. The recent flurry of sports exclusivity agreements would seem to be bad for the consumers, though each company's announcements have said exactly the opposite. Sega has sold off its Visual Concepts developer to Take 2 now, as it seems they are exiting the primary sports game business. EA also announced this morning they have completed an acquisition of Digital Illusions of Battlefield fame.

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Original update published on January 25, 2005

 

[Edfilho]

I guess we can say goodbye to Battlefield 3 or something... OK, EA was good to WC in the 90's, but nowadays they're acting in a way that's terribly damaging to gaming in general. Bill Gates is like Mothe Theresa next to these people.

When their american football game was beaten to a pulp by something that was better AND less expensive, they just bought out NFL and ESPN instead of actually making a better game... They might just do hostille takeovers on most competitors and simply shut them down. And we all know how good they are in theis whole shutting down bussiness.

I know game publishers aren't supposed to be developer charity institutions. But this kind of attitude is really bad for people who see gaming as a serious hobby. They prefer to win through business evil practices instead of just making games that are better.

Who knows, maybe next week they will buy out and kill Blizzard. Or Valve. Or even a big one like Ubi.

I can foresee a near future when all games are sold in walmarts, and the only options are different yearly versions of ESPN-NFL-Gatorade Football. Maybe some sims online thing too.

 

[Evan]

You will laugh.
EA already bought about 20 Percent of the Ubisoft-Shares. They still are talking about "no enemy takeover", but hey...20 percent is enough to make a difference in important options.

 

[Edfilho]

I know! that's why I cited ubi
Anyway, surely EA is not in the Stock Market share buying-selling business, so they definitely have some not-so-hidden agenda behind this weird deal.

 

[Bandit LOAF]

Anyway, surely EA is not in the Stock Market share buying-selling business, so they definitely have some not-so-hidden agenda behind this weird deal.

I'm pretty sure every corporation is in the "Stock Market share buying-selling business".

None the less, what's so special about Ubisoft? As best I can tell they're just another EA, producing assembly line franchise sequels (Tom Clancy's Rainbow Ghost 12).

 

[Eder]

It's still better for the industry to have multiple companies producing assembly line franchise sequels, though. If you think The Sims Online 2 Drugstore Addon Revisited and Tom Clancy's Rainbow Ghost 12 are bad, imagine how much worse the next sequels could be if they had no direct competition.

EA's yearly assembly line produced football games might have always sucked, but you have no reason to care as long as you can simply play some other company's football game instead.

 

[Bandit LOAF]

I thought people liked the EA football games -- and didn't they buy the *NFL* license and not some football company? I'm not sure how that's different than buying the Janes license to put on their airplane games...

 

[Eder]

From what I understand, the difference is that you can fly a P-47 during some WWII battle in any game, Jane's license or not... but you can't play the Redskins on a NFL quarter-finals game in a non-NFL licensed game.

In that sense, the NFL license is more like a USAF license than a Jane's license - if EA had a USAF license, other companies could make games where you fly planes and shoot stuff alright, but only EA's games could include USAF airplanes, uniforms, airfields, etc.

I could be mistaken since I haven't read much into the subject (nor do I know anything about the NFL at all ), but I did read on various sources that the deal grants EA "sole rights to the players, teams, and stadiums." Someone please correct me if I'm wrong here, because that's how I've been understanding this whole deal, and that's why it bothers me so much.

(As for EA's football games, I don't know if people like them or not, I was using them as a generalization. Feel free to replace "football" with "soccer" there, the same thinking applies.)

 

[Evan]

FIFA Soccer was a mess...the 98 version was the best, then they stopped thinking.

For the NFL-Series, never played it, but NFL Blitz was said better than Madden.

EA bought the exclusive-licenses for the NFL, there will be NO other Footbal-Game with original names of the players and so on. It´s like Microprose had the exclusive rights for an original Grand Prix-Formula1-Game.


And Ubi did very good games, that are INNOVATIVE: Like Beyond Good & Evil, Prince of Persia: Sands of Time, Splinter Cell or the great Rayman. Ubi is friendly too and they publish things like Conquest .

 

[Bandit LOAF]

From what I understand, the difference is that you can fly a P-47 during some WWII battle in any game, Jane's license or not... but you can't play the Redskins on a NFL quarter-finals game in a non-NFL licensed game.

Is this at all new, though? Because I remember all sorts of games in the NES/SNES era that didn't use team names/logos because they couldn't. It lead to some weird innovation, like that game that was regular football except all the players were monsters...

 

[LeHah]

EA was good {Sic} in the 90's, but nowadays they're acting in a way that's terribly damaging to gaming in general.

Eh, everyone says that about anything really, really popular. I could take out the word "EA" and put in George Lucas, Jesus Christ, Kevin Smith, Marvel Comics or The Matrix and someone somewhere is bound to agree with you.

 

[MamiyaOtaru]

I'm not a huge fan of the exclusive licensing thing (though I don't have any sports games so it really only bothers me in principle). Perhaps now someone will make a good college football game. Some people get rabid about college football, it could be good. And depending ont he team, college football scores a whole lot more

And Ubi did very good games, that are INNOVATIVE: Like Beyond Good & Evil, Prince of Persia: Sands of Time, Splinter Cell or the great Rayman. Ubi is friendly too and they publish things like Conquest .

For every Sands of Time there's a Warrior Within lol

 

[Eder]

Is this at all new, though? Because I remember all sorts of games in the NES/SNES era that didn't use team names/logos because they couldn't. It lead to some weird innovation, like that game that was regular football except all the players were monsters...

No, it's not new. Maybe even back then some other company had exclusive rights to the licenses in question... or maybe at the time companies just preferred to make generic sports game and save themselves the licensing money (you still gotta pay, even if you're not looking to be the exclusive licensee). I mean, when people were brown dots on a green screen, I didn't care if they were supposed to be monsters or the real world teams' players.

My point, however, is that no matter wheter going against it is a new trend or an old standard, competition between companies is good for gamers. It's a different industry now... Sega or Take 2 or whoever it was who had the other football game is not going to make "Monster League Football 2005" to compete with EA's next NFL-licensed game.

(From a strictly economic POV, though, I don't think there's anything wrong with these licensing deals - contrary to what random internet people like to shout about, this doesn't even come close to having anything to do with monopoly or excessive market power in EA's hands at all...)

 

[Bandit LOAF]

I think it could encourage new ways of thinking -- actually, the person who mentioned a college football had a great idea. A huge portion of the audience for these football games are college aged people who get together and play the games... if you did a great college football game, you could really hit that demographic.

 

[Edfilho]

Funny how many opinions are thrown around as facts by people who aren't aware of current gaming industry developments. And how people seem to disagree with me for the sake of disagreeing with me.

1) Ubisoft has published a lot of good games. The two new Prince of Persia games, Il-2 series, Pacific Fighters, Beyond Good & Evil, Far Cry, Splinter Cell, and several other I can't recall right now. I don't know about Ghost Recon, but Rainbow Six is a great franchise, and RS 3: Raven Shield actually introduced several new gameplay features to the squad tactical shooters. Not to mention that it is a very popular title among the MP crowd. To sum it up, Ubisoft has released more great games lately than EA.

2)

Eh, everyone says that about anything really, really popular. I could take out the word "EA" and put in George Lucas, Jesus Christ, Kevin Smith, Marvel Comics or The Matrix and someone somewhere is bound to agree with you.

This is pretty empty and meaningless answer, even more because I can provide facts to support my claim. EA funded most WC and Ultima games, not to mention some of the C&C titles and many, many other cool and interesting games. Nowadays they killed most of these series, they are trying to win over their competition by stopping them from making games, instead of making better games, and they churn out some pretty uninspired CFO chosen stuff.

Even though people say that a lot about many things, several times it is actually true, you know.

3) Erm, no, EA doesn't play the stock market game with other companies' stocks. That was pretty much said very clearly by more than one industry observer. If they bought Ubisoft shares, it was not an investment, but probably some embrionary takeover or something. This is not just my personal opinion, but something stated by several insiders.

4)Sure, college football is probably a good idea, but football games sell a lot to non-gamer people who buy this stuff on supermarkets. And to those people, NFL has a lot of weight. Generic and fantasy sports games are not as economicaly feasible as they were 15 years ago. And, internet angst apart, I do think it is "monopolic" indeed. When everyone could make games with NFL teams and players, the ESPN series of games really kicked Madden's ass because it was better, more inovative and less expensive. EA could have countered that by making a better, cheaper Madden game, but they just took NFL AND ESPN away from other game developers. Now they have to fight for the sports gamers' money with made up leagues or college football.. It is a "valid" trick, but my point is that it's not good for gaming in general.

 

[Bandit LOAF]

Funny how many opinions are thrown around as facts by people who aren't aware of current gaming industry developments. And how people seem to disagree with me for the sake of disagreeing with me.

Oh, neat, facts and righteous indignation. Lets see which one actually shows up...

1) Ubisoft has published a lot of good games. The two new Prince of Persia games, Il-2 series, Pacific Fighters, Beyond Good & Evil, Far Cry, Splinter Cell, and several other I can't recall right now. I don't know about Ghost Recon, but Rainbow Six is a great franchise, and RS 3: Raven Shield actually introduced several new gameplay features to the squad tactical shooters. Not to mention that it is a very popular title among the MP crowd. To sum it up, Ubisoft has released more great games lately than EA.

That's right, boys and girls, the amazing fact we're stunning the world by refusing to agree with is that Ubisoft is "great" compared to EA. Oh, darn, yeah, here it is, it's in EA's investor handbook: "while the corporation is the most profitable in the industry, ,it should be at no time considered 'great'."

You can take the output of either company and define it in such ambigious terms. EA has done lots of spectacular things recently, even if they don't include saving *our* series. Look at all the trends they *started* in recent years. The Sims was a really innovative idea, and the rare game that was sold to the masses instead of the video game market. I know, I know, HOW DARE THEY PROFIT OFF THIS? Well, a quick visit to Ubisoft.com says that their big release is "Myst 4"... (burn!) Ultima Online -- again, a really unique game that changed the direction of the entire market. We don't like it because it affected our series, but it is was the first game of its kind, its fun, etc. Remember when everybody had to have a World War II shooter? It's because of EA's Medal of Honor series.

And we could take the exact same spin as you do for Ubisoft -- "Rainbow Six Three"? Added 'several new gameplay features'? Well, that's innovation! Several of them! Woo! (I play the Ghost Recon games -- Ghost Recon 2 looks pretty, but it actually killed a lot of stuff that Ghost Recon 1 had to make it easier for new players. You don't control multiple squads anymore, you can't unlock anything cool, etc...) Both companies have big sellers (AND DAMN THEM FOR IT! HOW DARE THEY PROFIT!) and new titles.

This is pretty empty and meaningless answer, even more because I can provide facts to support my claim. EA funded most WC and Ultima games, not to mention some of the C&C titles and many, many other cool and interesting games. Nowadays they killed most of these series, they are trying to win over their competition by stopping them from making games, instead of making better games, and they churn out some pretty uninspired CFO chosen stuff.

You really shouldn't introduce a thought by claiming you're going to provide facts if you're going to follow it with rant about why you, personally, hate the company.

Yes, it's very sad that they're not making a new Wing Commander game -- but it's really, really hard to figure out how you'd differentiate between Wing Commander 9 and an assembly line followup were this not the case.

(Oh, hey, here's one of those 'facts': the other two poor tortured money making franchises you cited still have games in development. Red Alert 3 and the next Ultima Online title are in development. You can even play a little C&C game at EA's website. You drive a tank around a C&C map and blow stuff up. It's like Sole Survivor, except less of a cheap money-making ploy.

I'm also not sure where this amazing vision of EA as a fallen hero comes from. At what point did the yearly Madden game go from a normal thing to being something that chills the bones of internet pods? They've been doing them since at least 1990. Did it really take everyone fifteen years to figure out that they put out new sports games every year? Or are we perhaps looking for something to be offended by?

Even though people say that a lot about many things, several times it is actually true, you know.

Really? That's "great".

3) Erm, no, EA doesn't play the stock market game with other companies' stocks. That was pretty much said very clearly by more than one industry observer. If they bought Ubisoft shares, it was not an investment, but probably some embrionary takeover or something. This is not just my personal opinion, but something stated by several insiders.

Can you cite some? Because I find it pretty impossible to believe that one of the most profitable corporations in the world doesn't make its money the same way that every other large corporation does. (A bit of google searching seems to indicate that they invest in all sorts of game-industry-success-related companies... Creative Labs, Blu-Ray, etc. As a major corporation, they almost certainly make a huge amount of money buying and selling stocks on the traditional market, too -- but if you have some facts...)

4)Sure, college football is probably a good idea, but football games sell a lot to non-gamer people who buy this stuff on supermarkets. And to those people, NFL has a lot of weight. Generic and fantasy sports games are not as economicaly feasible as they were 15 years ago. And, internet angst apart, I do think it is "monopolic" indeed. When everyone could make games with NFL teams and players, the ESPN series of games really kicked Madden's ass because it was better, more inovative and less expensive. EA could have countered that by making a better, cheaper Madden game, but they just took NFL AND ESPN away from other game developers. Now they have to fight for the sports gamers' money with made up leagues or college football.. It is a "valid" trick, but my point is that it's not good for gaming in general.

I think you could say the exact same thing about the ESPN games -- they tried to drive EA out of the market they established by selling their games at a tiny pricepoint (at a loss in terms of development money, supposedly). EA countered with a similar trick that, at least in my mind, doesn't seem any dirtier than that. The fact that we're all yelling about it screams that we're just looking for an excuse for something to yell about -- we didn't care half a lick for sports games until it became an 'easy' way to criticise a company we no longer like.

 

[Edfilho]

That was a very funny post. And the funniest thing is that you will probably be against anything that I ever say... If I say "EA is nice", you'll make fun of me for that, and if I say "EA isn't nice" you'll make fun just the same. So I just enjoy the fun. You're very good at being ironic and sarcastic, I miss that in other foruns where people only use capitals and lots of grammar and orthography mistakes. And i'm not being sarcastic, your posts are indeed very entertaining.

BTW, I never screamed anything nor made any stupid comment like HOW DARE THEY MAKE PROFIT. That was unfair and untrue of you.

My point was that 1) yes, EA makes a lot of money and 2) that isn't always good for gamers like us. Or maybe like me, for you people seem to belittle avery single game that I like outside of WC. Back to the point, tobacco companies make lots of money too. And so do drug dealers. Ok, I admit, that was a hyperbole. But just because a company makes a lot of money, it's not synonym (sp?) of great products. Yep, I like the Sims, but I wish they (EA) had more different genres and I wish they stopped killing good developers.

For instance, UO may be still on, but everywhere I read something about it, it's something bad. Unfortunately. I thought that Odissey game looked excellent, but it got axed. The MMORPG genre seems to have moved on - games like CoH and WoW seem to be the next thing, whatever their merits and flaws may be. Everquest 2 got it's ass handed back to it in sales... It is very surprising. So, it would have been good if UO got some revolutionizing, for it's like, 3 generations of MMORPG behind.

Oh, and there's item 3) other companies have released more interesting games lately. Ubisoft being one of them. But not the only one. I listed several recent games that have some relevance. But you seem to have ignored it and made fum of RS3. Whatever, Rainbow Six Raven Shield is a LOT better than the predecessors, both in graphics and gameplay.

Paragraphs like this are quite weirding:

And we could take the exact same spin as you do for Ubisoft -- "Rainbow Six Three"? Added 'several new gameplay features'? Well, that's innovation! Several of them! Woo! (I play the Ghost Recon games -- Ghost Recon 2 looks pretty, but it actually killed a lot of stuff that Ghost Recon 1 had to make it easier for new players. You don't control multiple squads anymore, you can't unlock anything cool, etc...) Both companies have big sellers (AND DAMN THEM FOR IT! HOW DARE THEY PROFIT!) and new titles.

You take some stupid attitude and them go on to say that I had this stupid attitude. Then you go one making statements that has nothing to do with my post. Oh, lot's of empty Ad Hominens througout the whole thing. I NEVER "accused " EA of making profit - it would be inconsistent, I just stated that its present practices are harmfull to gaming in general. You are on the other side of the alleged spectrum, by the way, I gather from your post that you believe that any profti making company is perfect, good and nice.

BTW, LOAF, not every company makes money by playing stock market trader. Investing on tech companies that create technologies that are good for EA is completely differente from diving into NYSE and buying whatever stock is on the rise. Putting money on Bluray and Creative Labs is helping the industry move forward and become more profitable for them. But you'll probably won't find any evidence of EA buying shares of some unrelated business like, for example, agro-industries or chemical plants.

Investing on synergetic (ugh) business is a far cry from being a Stock player. When they got 20% of Ubi, analysts stated that it was a strange move, and probably the overture of some aggresive maneuvering. This is somewhere in Gamespot's news section. But you'll probably say something funny and bad about gamespot.

Ok, now you can pull some ad hominenens, make some (good) jokes at my expense and say some strange things about business ethics.