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  1. #1
    Let There Be Rock vashivihan's Avatar
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    Analyst cautious on EA resurgence

    Pacific Crest's Wilson believes Spore publisher is primed to reclaim market share by 2011; Microsoft's new box to debut in 2010, preceded by Nintendo's Wii follow-up.

    EA CEO John Riccitiello was the first to admit at last week's D.I.C.E. Summit that his company had made a number of costly mistakes that have opened the door for market-share challengers such as Activision in recent years. However, yesterday EA laid out a wide-ranging counterattack to fend off would-be third-party publisher kingpins. Specifically, the company officially confirmed the next installments in the Burnout and Skate franchises, and also dated Will Wright's long-awaited "sim everything" Spore. EA further said that it expects to increase revenues by an astounding 71 percent to $6 billion for its fiscal year 2011, which ends March 31, 2011.

    However, while promising massive revenue gains is one thing, actually delivering is something else altogether. Although the jury will be out for another three years, Pacific Crest Securities analyst Evan Wilson believes EA's rosy projections are entirely feasible, though not exactly assured.

    "EA has given us the best case yet that it has overcome its addiction to spiking development costs, game delays, poor game quality, and lackluster innovation," said Wilson.

    Perhaps taking cues from Alcoholics Anonymous, Wilson laid out what he called "The 12-Step Program for a Broken Publisher," the first eight of which EA has successfully completed:

    1. Recognize the problem: EA sees declining quality, market share, competitive position.
    2. Seek help. Initiates a search for new management.
    3. Decide to trust help: Hires John Riccitiello, Peter Moore, Kathy Vrabeck.
    4. Take a close look at yourself: Go through detailed fiscal year 2009 and fiscal year 2011 plan.
    5. Share your findings with another: Set out strong goals to board.
    6. Practice trusting your help: Delay Spore, Warhammer, Battlefield, Mercenaries, and Rock Band in Europe.
    7. Ask for help in specific ways: Admit issues and allow new hires to address flaws in quality, technology, and platform choices.
    8. Think about those harmed. Host a very bullish analyst day for frustrated investors. Prep a solid fiscal year 2009 release slate for customers.

    That leaves just four more steps to complete:

    9. Make things right to those harmed: Release high-quality games for gamers and rein in costs in fiscal year 2009 for investors.
    10. Regular check-ups: Host another bullish analyst day in February 2009.
    11. Grow trust in help: Hit very optimistic market-share and margin targets
    12. Live the program: Return EA to its glory in fiscal year 2011.

    Concluding, Wilson noted, "While we have issues with the likelihood that EA will hit its fiscal year 2011 targets, it has a very strong slate in fiscal year 2009 and has every opportunity to gain back market share.

    Wilson, who late last year made projections about a Nintendo DS redesign already being complete, also gave investors today a heads-up on when he believes Microsoft and Nintendo will unveil their next systems. "We believe that peak industry sales will occur in 2010, given that Microsoft will likely introduce its next console that year and Nintendo will likely launch before then. Further, 2010 is also likely to coincide with the end of the Nintendo DS and Sony PSP cycles."
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  2. #2
    The Man on Ice 261311's Avatar
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    Interesting points. I hope Nintendo comes out slightly before or after the new Microsoft console so people can get a better taste from worse/ unexperienced times.
    With much love, 261311.

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  3. #3
    3D Artist sagema's Avatar
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    EA can't dominate a bowl of Jelly with that list of games. EA could stay on the top 5 if they continue to play Pac-Man with the companies. Nintendo, Activision/Blizzard, and Ubisoft will remain on the top and muscle EA right off the list.

    EA has only pissed off gamers and developers as they recently fired their Chicago staff during X-mas 07. A lot of people simply hate them, and they need to recover their image before they can claim anything.

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