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Now I am getting a bit worried

Discussion in 'UHall' started by HeadOn, Jan 13, 2010.

  1. HeadOn

    HeadOn Guest

    Just read this article and it has put bad things in my mind, especially the part I bolded.



    http://videogames.yahoo.com/events/plugged-in/bad-times-get-worse-for-electronic-arts/1384971

    Bad Times Get Worse for Electronic Arts

    by Chris Morris


    Investors are getting impatient with Electronic Arts.

    The video game publisher, which has been attempting a turnaround for nearly two years, on Monday warned that its earnings for the December quarter would be significantly lower than expected. Shares, predictably, are under fire today, down nearly 8 percent.

    Once the undisputed king of the video game hill, EA has somehow become the gang that can't shoot straight. This is the second holiday season in a row that the company has notably lowered its guidance. Its powerhouse games—including "Madden"—are showing signs of weakening. And though critics have applauded some of the newer franchise efforts, none of those titles has become a true blockbuster.

    While EA certainly has its problems, Monday's warning also sounded an alarm for the rest of the industry.

    Weak sales in Europe were cited as one of the key reasons for the shortfall. EA was especially vulnerable to this, given its reliance on the "Fifa" franchise, but that retail softness could hit several other publishers as well.

    Ubisoft for example, has a strong concentration in the continent. And GameStop, which has locations in 15 countries outside of the U.S. and Canada, has already reported a shortfall from Europe.

    "European weakness makes it difficult for any of the video game companies to hit numbers for the December quarter," notes Ben Schachter, an analyst with Broadpoint AmTech.

    On a broader scale, the EA warning indicates that—"Modern Warfare 2" aside—video games may not have been as popular this holiday season as many expected they would be. While comments from hardware manufacturers indicate that people were buying systems—like the Nintendo Wii and Sony PlayStation 3, they apparently weren't buying many games to play on them.

    Worse still, EA executives were fairly gloomy on the months ahead, saying they expect industry sales in 2010 to be flat to down 5 percent.

    That's notable, as the industry has a very strong lineup of games announced for this year—and the comparison to last year's sales numbers is likely to be much easier than 2009 was versus 2008. Some analysts, in fact, feel EA might be overreacting.

    "Management made a mistake, in our view, by commenting that the company expects industry sales to be flat or down slightly in 2010," says Michael Pachter of Wedbush Securities. "We think that [the company] is somewhat shell-shocked … [and] the negative industry growth forecast was made out of an overdeveloped sense of vigilance about not making the same mistake for three years in a row. We think that management is just plain wrong."

    For EA, the shortfall will likely bring about even more cost-cutting. That's getting tougher, though as over the past two years, the publisher has eliminated roughly 2,500 jobs and consolidated several of its studios. Fewer developers will mean fewer titles—with some franchises likely being put on a shelf for a while, letting demand build for new installments and giving the teams time to actively plan for more dramatic changes between releases.

    (A good example of this is the new "Medal of Honor" title due later this year. Once a biennial title, EA kept it on the sidelines in 2009, giving its team more time to hone the game and move it from its traditional World War II setting to modern day Afghanistan. )

    It will be interesting, also, to see if the company continues to cultivate relationships with independent development houses as part of its "EA Partners" program. Many of the games published under that branch of the company have been sales hits—such as Valve Software's "Left 4 Dead 2" and the "Rock Band" franchise.

    EA gets a cut of those sales, but its own games are being overshadowed in the process. And ultimately, that's not a way for a fallen king to reclaim its crown.

    Copyright 2010 CNBC.com
     
  2. aarons6

    aarons6 Certifiable
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    yep the game people are cutting their own throats.

    who wants to pay 65$ for a freaking video game?

    thats why most people rent games to play and return when done.

    or buy used.. from the game rental places for hella cheap.
     
  3. Thav12

    Thav12 Seasoned Veteran
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    that is why the subscription based games may actually stay alive in the long run.

    Don't be a doom sayer, unless you are getting ready to kill DF...
     
  4. *sigh* I hate reading posts like these.
     
  5. lucksi

    lucksi Guest

    Gee, why are people buying less games in Europe? Maybe because you only want to get shafted by EA so many times? Maybe because the games are buggy on release? Maybe because they shut off the servers for their games after one year to one year and a half while still selling said games? Maybe because the DRM measures get more and more draconian?

    Or all of the above.
     
  6. Salivern_Diago

    Salivern_Diago Lore Master
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    Hmm the reason EA is failing is because of the decissions the exec's are making. In short people ARE talking with thier wallets and in a word people are UNHAPPY with the way EA is doing things.

    Even though I love my UO, it only serves EA right for the way it treats its paying customers.
     
  7. Xalan Dementia

    Xalan Dementia Slightly Crazed
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    subscription games should be safer than console games, console games cost so much because of people pirating them.
     
  8. five oclock

    five oclock Guest

    1999 the game is ending..

    2000 the game is ending..

    AOS = the game died..litterly :D

    2006 the game is ending.

    2007 the game is ending.

    In the states everythings is tough. BIG TIME! BUT I can still pay 15 bucks a MONTH and get unlimited gaming. Tell me where else you can get that much fun for 15 bucks a MONTH!? Heck a movie cost about 10 bucks and thats just for 2 hours or so. People are trying to save money and cut there online gaming? WHY??!!! its only 15 bucks a MONTH!!! I never really understood that, but hey thats just me.

    btw 15 bucks a month is 3.75 a week or so. Heck Smokes cost twice that much and gas is almost to that a gallon again....

    Ya EA sucks. No doubt, but they are getting a monthy boost from us. So....

    2008 the game is ending.

    2009 the game is ending.

    2010 the game is ending

    2011 the game is ending..

    see the pattern. :D
     
  9. Smokin

    Smokin Guest

    Damn smokes are 10 bucks a pack here.
     
  10. Divster

    Divster Guest

    I hear ya smokes went up by a chunk about a week ago here too (uk) guess the nation will quit smoking come next month *rolls eyes*
     
  11. Beer_Cayse

    Beer_Cayse Guest

    annnnd on Jan 8th, I posted this in Uhall OT ...
     
  12. sevan

    sevan Guest

    UO is only EA game I currently play or own. I will keep playing UO regardless of how I feel about EA... I feel for the independant studios (not for EA) and hope that EA Mythic does not face further cuts because the "franchises" at parent company EA are not doing well. I will continue to vote with my wallet not for EA but for Mythic or whoever runs UO at the time.
     
  13. GalenKnighthawke

    GalenKnighthawke Grand Poobah
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    With the information we currently have from official sources, UO seems fine assuming EA behaves rationally.

    Those are two very big caveats though. There could be information we don't know, coincidentally validating the gloom and doomsayers. EA could also behave irrationally. It has before; other major companies have before too.

    -Galen's player
     
  14. kelmo

    kelmo Old and in the way
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    Perhaps this is an indication that single player games are a thing of the past.
     
  15. Wakiza

    Wakiza Guest

    UO will always be around, even without EA.
     
  16. GalenKnighthawke

    GalenKnighthawke Grand Poobah
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    Very doubtful.

    But what I think is likely dead is the EA paradigm of a quick turnout of new editions and sequels.

    And the sad thing is that, arguably, the handwriting was on the wall for this paradigm as far back as The Bard's Tale III. Roughly 2 decades of borrowed time and living off of others' work and others' accomplishments.

    -Galen's player
     
  17. GalenKnighthawke

    GalenKnighthawke Grand Poobah
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    It being around without EA would require that EA sold the property and that someone was willing to buy it.

    Free shards don't really count to me, though, if that's what you were referring to.

    -Galen's player
     
  18. aarons6

    aarons6 Certifiable
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    i wouldnt go that far, COD:MW2 hit over 1billion in sales..

    im sure its pirated but people who pirate games dont buy them anyway.

    that can be said for anything..

    i wont buy a movie it if i couldnt download and watch it..
    id wait till it come on cable or hulu.

    same goes with music cds..
    i will buy one song on itunes if i like it, but i wont buy the whole cd unheard.
     
  19. Hiru

    Hiru Adventurer
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    AMEN...
     
  20. Mairut

    Mairut Guest

    " The video game publisher, which has been attempting a turnaround for nearly two years, on Monday warned that its earnings for the December quarter would be significantly lower than expected. Shares, predictably, are under fire today, down nearly 8 percent. "

    So....they're just not making as much money as they projected they would?

    Or they're not making their bottom line?

    I hate when I hear on the news "XYZ company found out today that they lost money...." when what they actually mean is that the company didn't (actually) lose any money, they just aren't making as much as they thought they would for the quarter or year or w/e (meaning sales aren't up where they expected them to be).
     
  21. Lorax_Pacific

    Lorax_Pacific Lore Master
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    EA did really well during the last recession and I wished I invested my tech stocks over. This is deeper and when the entertainment industry gets hit we see how deep it entrenches.

    I'm glad when the real world gloom hits I can escape into my land of honey and hord resources in virtual space. I can even earn gold and be my own boss. Ahh the life of Lorax in Sosaria.

    -Lorax
     
  22. Quenchant

    Quenchant Seasoned Veteran
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    Just a guess here....

    The consoles did well at Xmas because all the manufactures discounted them.

    Not many games were discounted for the holidays. Most folks are bargain shoppers now-a-days. They want to feel like they got a deal or at least good value for the $'s spent. EA could have perhaps sold more if they would have bundled some products and discounted or just offered a discount for a couple weeks. They choose not to offer any discounts hence the poorer than expected 4th quarter earnings.

    My $.02's worth,
    Q
     
  23. mustafa

    mustafa Guest

    OMG does everyone read a line see someone doing bad then panic lol. Everyone and everything has been hit with the way money and world going about at this moment but this shall fix itself soon i hope EA will always be strong yes sales dip a bit but look at COD:MW2 hit over 1billion in sales
    then there is FIFA 10 over 2 mil users online on xbox so that 2 mil over the world who pay my money 30 odd quid for game so chill again peps UO and ea will be about for awhile yet (ANYWAY were we not told 2012 is worlds end lol)
     
  24. longshanks

    longshanks Guest

    published data shows 10 pct of the pop is unemployed right now. real unemployment in this country is probably above 15 pct. Europe is largely socialist with more entitlement programs than exist in the U.S. and sharply higher tax rates so they are suffering just as bad there if not worse.

    in this type of envirnment the disposable income is just not there, hence people dont go out and buy 65 dollar video games. this leads to these types of articles and results in the cost cutting and job loss that has plagued not only ea but many other industries this past year.

    UO is a mature title. It has a stable playing base, people willing to pay every month for the priviledge to play. This is known as a cash cow in management.

    So for us you may notice a lack of new content or maybe a delay in expansions and such as the developmental resources are just not there, however I highly doubt that it will be shut down.

    On the flip side, sometimes change is good and I happen to believe that this franchise holds tremendous brand value for someone in the industry and would be quite an attractive spin out if ea really hits the skids.
     
  25. Magdalene

    Magdalene Stratics Legend
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    For European sales boost the companies should REALLY try selling us games and subscriptions for the same price they sell them in US.
    Euro is consistently exchanged at 1.4-1-5 $ and we are charged 1:1 + tax most of the time.
     
  26. longshanks

    longshanks Guest

    *wonders how much EA really knows about exchange rates*
     
  27. BlackMagus

    BlackMagus Guest

    Trading Dollars in Euro 1:1 is the norm... International product pricing is not related to currency exchange rates, but rather pricing levels in the different markets.

    Things are more expensive here in Europe, so EA charges us more for the same value.

    After all, you would sell your 120 Magery scroll for more gold on Atlantic than you would on Drachenfels, wouldn't you? :)
     
  28. It doesn't really surprise me. Games cost far to much for consumers to be actively buying them on a consisten basis. I remember buying hit titles for the N64 back in its day between 29-39$, or nearly half the price of current games. The sad part is those games were arguably better than the ones produced today although the technology and graphics have become increasingly better over time.

    There's not as much game innovation being developed which basically means almost every new game is literally a rehash or similar in style compared to another. You pick up one FPS today and you've played them all, yet when you go back to '97 and play golden eye or perfect dark, nothing compared.

    And then you have the economic crisis that America has been suffering, causing the moral of employees to drop significantly reflecting its self on almost every major industry in the country, and in some cases, the world.

    I'm surprised the Madden or the FIFA series lasted as long as they have under EA. The only industry I'm aware of that has been able to rehash a product so blatantly on a yearly basis and still produce a profit off of it has been the auto industry, but even over the past two years, you've seen it decline as well (GM went bankrupt duh!).

    We're basically beginning to reach a point in time where a breath of fresh air is needed, yet major game producers like EA aren't answering our plea, which will inevitably lead to an underdog game producer to overwhelm our minds with some amazing new product and cause EA to fall under. (wow long run on!)
     
  29. Magdalene

    Magdalene Stratics Legend
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    It may be "the norm" but I still feel screwed over (not in a good way) and I don't like people who do this... much... ;)
     
  30. Sindris

    Sindris Guest

    I hate when I try to edit and post a new message instead. See two down
     
  31. Sindris

    Sindris Guest

    I generally don't like to advertise other web sites here, but services like Goozex http://www.goozex.com/trading/asp/mygoozex.asp are an attractive alternative to buying new games. 50 - 65 bucks is just too much for most people to pay these days, trading just makes more sense, and the online services offer waay more value than the rip-off "deals" most retail specialty stores (*cough* Gamestop! *Cough*) offer. As for UO, I don;t think its going anywhere soon. I'm pretty sure it brings in more money than it costs to maintain.
     
  32. smip

    smip Slightly Crazed
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    Hey you forgot to add the December 21, 2012... End of the world...

    LOL .. Yes. I've seen that every time something new comes out.. yet uo keeps thriveing.
     
  33. GarthGrey

    GarthGrey Crazed Zealot
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    I love it when you talk sexyish, you're not so Admin Sounding when you do :)
     
  34. Splup

    Splup Guest

    And I think that's one reason why games don't sell here in Europa anymore.

    It's ridiculous that prices are traded 1 $ = 1 € when it's more like 1 $ = 0,69 €.

    I seriously can't remember last time I bought a game from Finland, except from some sale bin for 5-10 €.

    I always by in US Dollars if it's possible, since Visa does use a lot better exchange rate then 1:1.

    It just feels sad that I get a game cheaper mailed to my house from across the world then I get it if I walk to the supermarket 600 m from my house. And they talk about global warming duhh.
     
  35. Splup

    Splup Guest

    Lets see.

    In Finland Forza Motorsport 3 for Xbox 360: 55-59 € = 79-85 $

    At Gamestop.com same game $59.99 = 41,6 €

    The price is 34-44 % more expensive.
     
  36. BlackMagus

    BlackMagus Guest

    According to 2009 Big Mac Index Sweden's purchasing power parity is 155%. (There is no data for Finland, but Sweden compares pretty well.)

    So in average stuff is 55% more expensive in Sweden than in the US. You are actually getting a bargain on your EA subscription or locally bought computer games. :thumbup: