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EA's stock plummets

JyiigaJyiiga Seneca, SCPosts: 1,041Member Uncommon

 

http://www.cinemablend.com/games/EA-Stock-Plummets-43822.html

 

Electronic Arts' stock continues to see a downfall. It's been steadily declining since December of 2011, and a recent comparison chart shows that not only are core gamers highly dissatisfied with the way the corporation is being ran but investors aren't too pleased, either.
 
GameIndustry.biz International has up a very interesting read comparing the market ebb and flow for a few gaming studios, namely EA, Take-Two and Activision-Blizzard. The chart is very unflattering for EA, as it shows that while Activision-Blizzard has a nominal standard alongside the NASDAQ index, Take-Two and EA are still sliding, sliding and sliding some more. In the case of EA, they've gone from $23 in December, 2011 down to $12.02 as of the publishing of this article.
 
For Take-Two it makes sense, they released Max Payne 3 (a niche shooter title) in May to 400,000 copies, according to NPD results, and they have Spec Ops: The Line dropping on June 26th, another niche military shooter. It's not an excuse, but rather an explanation on why Take-Two wouldn't be brimming with interest in the broader market. Everyone already knows that they will see moderate climbs with releases such as Borderlands 2 later this year, BioShock Infinite next year, and the granddaddy of them all, Grand Theft Auto V presumably arriving spring of 2013.
 
Even still, the general consensus in the gaming community is rather positive of Take-Two and there is a lot of buzz amongst core gamers for titles like BioShock and Borderlands. What's more is that there is a lot of mainstream buzz for Grand Theft Auto, and this game alone will skyrocket Take-Two's stock, much in the same way that Call of Duty each and every year boosts up Activision-Blizzard's stock.
 
The thing about the charts, however, is that EA isn't quite in that position. Buzz surrounding Medal of Honor: Warfighter is mediocre at best, it's not definitive enough in one area or another to make it standout as a must-have military shooter (one amongst many). Need for Speed: Most Wanted is garnering mixed reactions, some people like the new Burnout Paradise approach while others feel it strays too much from what makes the Need for Speed fun. It still amazes me how EA hasn't figured out that people would willing (including myself) dump $60 to $70 bucks into a well-made Need for Speed: Underground 3.
 
Nevertheless, EA's fall line-up -- the line-up that houses the muscle-bound powerhouses of the top tier publishers -- isn't all that impressive. It will be facing off against the likes of Assassin's Creed III, Resident Evil 6, Halo 4 and Call of Duty: Black Ops 2.
 
Couple in sequels with a poor reputation amongst the gaming community and things aren't looking especially rainbow bright for Electronic Arts.
 
The general consensus is that EA needs to do something to boost investor confidence. It's amazing because just last year investors felt that EA was in a decent position but Activision was not. Then again, this was before the Mass Effect 3 ending fiasco, the day-one DLC uproar, the Dead Space 3 co-op fallout, anything Origin, EA winning Worst Company in America and the somewhat mass exodus of players from Star Wars: The Old Republic. You could argue these things played a small or non-significant part in EA's stock decline and that Take-Two's stock is also falling, but again, Take-Two's stock hasn't dropped quite as bad as EA's and it's not like they're plastered in negative press all over the web.
 
In the case of EA, this sort of negative press can affect sales, and sales directly correlate to investor confidence, which directly affects EA's stock.
 
Is there hope for a rebound? Well, there's always hope. But EA really needs to get away from trying to make "smart" business decisions in a creative market driven by creativity. The major issue is that they're alienating the fanbase that keeps them alive in hopes of trying to hit the massive but unpredictable casual market. But their marketing keywords of "broadly appealing" and turning anyone who can swipe their finger across the screen "into a gamer" just really needs to go away.
 
They're completely missing a big piece of the puzzle though: you need good games to get core gamers to buy and support them, and you need core gamers to spread the word so casual gamers can latch on (i.e,. Call of Duty, Resident Evil, Assassin's Creed, Batman, etc.,) and until EA figures out where they're going wrong and how they're doing the gaming base a disservice with a lot of anti-consumerist measures, it's unlikely to see them grow out of the slump.
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Comments

  • SuiMeSuiMe GeelongPosts: 16Member

    Nice analysis, but I just can't see EA changing. 

    ________________________
    It's a game, ffs.

  • GoresonGoreson GlasgowPosts: 122Member

    *snooze*

    this relates to SWTOR how?

    I mean we know that EA doesn't see any BW project (currently) as a high priority...

    So... are we to asume that based on the OP's write-up EA is going to drop BW (and it's projects including SWTOR) completely in favor of trying to save its other EA branded projects to make the EA stock fly again?

    Don't be daft!

    Unless they actually decide to sell off BW completely - which I doubt as that would mean selling of they complete RPG house - both EA and stock holders will have to live with a nice round bundle that does include BW in the EA fold and where - in a nice two-way setup - things happening to EA may well effect BW and things happening to BW may well effect EA.

    But that remains for time to tell how this will play out.

    So *snooze*

  • WorstluckWorstluck the valley, CAPosts: 1,269Member

    I am not sure how the drop in stock doesn't relate to SWTOR.  Investors are worried about EA because they spent a ton of money on something and it's not entirely working out (also it wasn't the OP analysis, that text is pulled right from the article).  You can see a marked decline of their stock right after SWTOR launched.  Investors are not confident in SWTOR, just like EA has gone on record saying they aren't either.  SWTOR had everything going for it, lots of recources, an amazingly rich IP, a respected RPG studio creating it, but it's underperformed for all intents and purposes.  Riccitello really banked on SWTOR to be this continuous money maker, as did investors. 

     

    Here is another chart to relate how EA is doing to the rest of NASDAQ:

    image

    image

  • AlotAlot BredaPosts: 1,948Member

    Relevant video is relevant.

    Dead Space 3 needs to sell 5 million copies to survive, good thinking EA.

  • WorstluckWorstluck the valley, CAPosts: 1,269Member
    Originally posted by Alot

    Relevant video is relevant.

    Dead Space 3 needs to sell 5 million copies to survive, good thinking EA.

     

    Yes I read an article about that too and even wanted to make a post about it. 

     

    I am just an observer, not an investor at the moment, but how is that a good thing to say?  They put so much pressure on the developers and little people working on this game with statements like this, when I am sure working at EA is already probably pretty stressful at the moment.  It's almost as if they want the game to fail.  I realize that internally sales figures need to meant etc, by why come out and publicly say that if you game does not sell, it's over?  Are they trying to pressure the fans or would-be fans into buying the game?  "Welp I better buy Dead Space 3 or there wont be Dead Space 4!".  I don't get it.

    image

  • AlotAlot BredaPosts: 1,948Member


    Originally posted by Worstluck
    Originally posted by Alot Relevant video is relevant. Dead Space 3 needs to sell 5 million copies to survive, good thinking EA.
     

    It's almost as if they want the game to fail. 


    Perhaps that is in fact their goal. It would make much more sense in this context then EA wanting the game the succeed.

  • palulalulapalulalula vukovarPosts: 655Member

    Complete American economy is going down not just EA stocks, lol

  • WorstluckWorstluck the valley, CAPosts: 1,269Member


    Originally posted by palulalula Complete American economy is going down not just EA stocks, lol
     

    Did you not see the chart I linked lol.  When compared to the rest of the NASDAQ, EA is under-performing.

     image

    image

  • Loke666Loke666 MalmöPosts: 17,949Member Uncommon
    Originally posted by SuiMe

    Nice analysis, but I just can't see EA changing. 

    They have before, I remember EA as a small company that made fun games for the C-64. They have changed several times since then and now they need to change again.

    Frankly do they need to stop micromanaging the games the companies they own make. It turn all their games into generic junk.

    Sun Tzu said that politicians should stay out on how their generals managed a war, and here corporate weasels should leave it to gamers to design fun games, it is not that complicated and EA used to know that.

  • ZaltarkZaltark Lockhart, TXPosts: 421Member

    EA is in the habit of gambling. Instead of 'making' a good game, they throw a bunch of money onto a 'hope' of selling without putting any real work into it. Gambling is a very dangerous business model.

  • DaezAsterDaezAster new york, NYPosts: 803Member
    Originally posted by Alot

    Relevant video is relevant.

    Dead Space 3 needs to sell 5 million copies to survive, good thinking EA.

    That vid had me dying....

  • palulalulapalulalula vukovarPosts: 655Member
    Originally posted by Worstluck

     


    Originally posted by palulalula Complete American economy is going down not just EA stocks, lol
     

     

    Did you not see the chart I linked lol.  When compared to the rest of the NASDAQ, EA is under-performing.

     

     image

    LOL, you forget how low was NASDAQ for years. Still in big-. Thats just small up for short time and in week  it will go down again

  • AlotAlot BredaPosts: 1,948Member


    Originally posted by palulalula
    Originally posted by Worstluck   Originally posted by palulalula Complete American economy is going down not just EA stocks, lol
        Did you not see the chart I linked lol.  When compared to the rest of the NASDAQ, EA is under-performing.    image
    LOL, you forget how low was NASDAQ for years. Still in big-. Thats just small up for short time and in week  it will go down again

    NASDAQ had a major drop in 2009 but climbed steadily in the following years and it's not looking like it's going to drop soon. EA however is like a stone being Fus-Roh-Dah'd off a mountain.

    Source.

  • Byne25Byne25 Savannah, TXPosts: 41Member

    Wow I am just laughing about this thread. Not because EA is losing ground in the stock market but because people are so simple minded into thinking its just one game that has caused the stock to tank. The simple matter of this, is that we do not know what EA CEO promised the board and its investors. As an investor and anyone who has invested knows that they get in the mail information about the future and past of the company. In some cases projections of profit etc. EA released information about their profit etc. It was not good and did not meet the expectations of the investors. This includes the purchasing of other companies, taking on projects, missing deadlines and yes the under delivery of a highly funded MMO. SWTOR was part of this but it was not the catalyst and definately was not the cause. Could most likely have been the final straw to investors. There is a lot more involved in this that simply we are not privy to. The company will make necessary cuts and readjust the funding and focus as needed to attempt to please the investors. If this means dumping BW and or cutting its projects, than they will do so. Doesnt mean the user/player will like it, but in the end its about budget and profit. Investors don't care how you make a profit just as long as you do.

     

    Advice:

    Get real and quit trying to troll about this game destroying a company and the MMO world. If you dont like it, dont play it. If you don't like the way a company functions than go to its competitors.

  • WorstluckWorstluck the valley, CAPosts: 1,269Member
    Originally posted by Byne25

    Wow I am just laughing about this thread. Not because EA is losing ground in the stock market but because people are so simple minded into thinking its just one game that has caused the stock to tank. The simple matter of this, is that we do not know what EA CEO promised the board and its investors. As an investor and anyone who has invested knows that they get in the mail information about the future and past of the company. In some cases projections of profit etc. EA released information about their profit etc. It was not good and did not meet the expectations of the investors. This includes the purchasing of other companies, taking on projects, missing deadlines and yes the under delivery of a highly funded MMO. SWTOR was part of this but it was not the catalyst and definately was not the cause. Could most likely have been the final straw to investors. There is a lot more involved in this that simply we are not privy to. The company will make necessary cuts and readjust the funding and focus as needed to attempt to please the investors. If this means dumping BW and or cutting its projects, than they will do so. Doesnt mean the user/player will like it, but in the end its about budget and profit. Investors don't care how you make a profit just as long as you do.

     

    Advice:

    Get real and quit trying to troll about this game destroying a company and the MMO world. If you dont like it, dont play it. If you don't like the way a company functions than go to its competitors.

     

    Well Mr. Byne, no one is this thread stated that EA stocks are down because of one game.  It has certainly played a role in it however. 

     

    Oh you don't say EA is a complicated company with a lot of interests?  I wasn't aware of that!  Maybe before accusing of everyone of trolling, which is the usual cop out response, maybe read the thread?

    image

  • BloodyVikingBloodyViking TrondheimPosts: 132Member

    How does EA economic voes imact SW:TOR?

     

    Well, that question is relatively easy. If the monthly income from SW:TOR is lower than the mothly expenditure to keep the game online it becomes a problem. For a company that is already up to its waist in water and taking in water fast they have to look at ways to keep the bottom line out of the red. Another thing to keep in mind that there can be tax incentives in shutting it down (but they need to be desperate to look down that route).

     

    So what you need to keep your eyes on is:

    -downsizing of the SW:TOR connected staff (CS, development, marketing etc)

    -downsizing of the server infrastructure

    -cashshop ingame

    -numerous trial/return incentives for old players

     

    Some of these things have already come to pass at some extent, but often they will be repetitive and creeping closer to a breaking point in terms of what is feasible in order to keep the game up and running.

    The big unknown factor in all of this is LucasArt and how they play into this. Do they get fixed sums of money or is it all a percentage or a combination? Has LucasArt a built-in destruction-button in their contract? Knowing its a big franchise for LA I believe they will not be happy if SW:TOR falls flat and they dont get a chunk of cash every month.

     

    All in all a very "popcorn worthy" situation for anyone not emotionaly or financialy invested.

  • st3v3b0st3v3b0 Gainesville, FLPosts: 147Member Uncommon
    Originally posted by Worstluck

    Well Mr. Byne, no one is this thread stated that EA stocks are down because of one game.  It has certainly played a role in it however. 

     Oh you don't say EA is a complicated company with a lot of interests?  I wasn't aware of that!  Maybe before accusing of everyone of trolling, which is the usual cop out response, maybe read the thread?

    You insinutated so when you posted in the TOR forums instead of the General.  While I am sure it has impacted it, it definitely in only a fraction of the reason EA's stock is falling.

  • JyiigaJyiiga Seneca, SCPosts: 1,041Member Uncommon
    Originally posted by Byne25

    Wow I am just laughing about this thread. Not because EA is losing ground in the stock market but because people are so simple minded into thinking its just one game that has caused the stock to tank.

     

    The article names SEVERAL games over the past year. SWTOR is just one of the more expensive failures.

  • WorstluckWorstluck the valley, CAPosts: 1,269Member
    Originally posted by st3v3b0
    Originally posted by Worstluck

    Well Mr. Byne, no one is this thread stated that EA stocks are down because of one game.  It has certainly played a role in it however. 

     Oh you don't say EA is a complicated company with a lot of interests?  I wasn't aware of that!  Maybe before accusing of everyone of trolling, which is the usual cop out response, maybe read the thread?

    You insinutated so when you posted in the TOR forums instead of the General.  While I am sure it has impacted it, it definitely in only a fraction of the reason EA's stock is falling.

     

    I didn't make the OP, just wanted to discuse EA's current woes.  Sorry, next time I will use my powers to move this thread to another area of the forum so it doesn't give you the feeling we are badmouthing SWTOR.

     

    EDIT:  Just for the record, I actually kind of liked SWTOR.  Wasn't my type of game tbh, but I just find this whole thing interesting.  I am not some random hater trying to talk shit about the game.  I will talk shit about EA though :D

    image

  • TrionicusTrionicus Fort Lauderdale, FLPosts: 497Member

    Though I don't believe the statistic of a previous thread, if swtor did cost 500mill total, 1 fail game could actually drop a stock like a brick. I mean, if 38 studios had done better with KOA, as well as, maybe The Force Unleashed, they might still be around.

     

    In any case, there are no good reasons to buy EA stock atm, unless it's cheap and this is the season they come out with sport games, quick buy now, quick sell after the sports games come out and maybe profit?

  • erictlewiserictlewis Cottondale, ALPosts: 3,026Member Uncommon
    Originally posted by BloodyViking

    How does EA economic voes imact SW:TOR?

     

    Well, that question is relatively easy. If the monthly income from SW:TOR is lower than the mothly expenditure to keep the game online it becomes a problem. For a company that is already up to its waist in water and taking in water fast they have to look at ways to keep the bottom line out of the red. Another thing to keep in mind that there can be tax incentives in shutting it down (but they need to be desperate to look down that route).

     

    So what you need to keep your eyes on is:

    -downsizing of the SW:TOR connected staff (CS, development, marketing etc)

    -downsizing of the server infrastructure

    -cashshop ingame

    -numerous trial/return incentives for old players

     

    Some of these things have already come to pass at some extent, but often they will be repetitive and creeping closer to a breaking point in terms of what is feasible in order to keep the game up and running.

    The big unknown factor in all of this is LucasArt and how they play into this. Do they get fixed sums of money or is it all a percentage or a combination? Has LucasArt a built-in destruction-button in their contract? Knowing its a big franchise for LA I believe they will not be happy if SW:TOR falls flat and they dont get a chunk of cash every month.

     

    All in all a very "popcorn worthy" situation for anyone not emotionaly or financialy invested.

    I don't know about the specifics, but most companies that deal of royalties have a built in amount, that they have to sustain, after wich the company they are dealing with would loose it's license. I don't think its a percentage, I think it is a hard round number. However not working for Lucas art's and or ea/bioware I have no clue of what that number is.

    The facts are the facts, fired 200 people, merged up the servers, and now talks of going free to play with some sort of rmt cash shop.  This all screams of ea/bioware not making enough money.  The real question is can they survive long enough to pull off the free to play move, or will somebody go that's it and pull the plug.  It is not the first time ea has killed a game.

    It is all about Roi, return on investment, I would like to know those numbers when they get reported to the sec/and the shareholders at the end of this physical quarter.

  • BloodyVikingBloodyViking TrondheimPosts: 132Member

    It's all going to be like a slow trainwreck the way I see it. I will give it about a year before its shut down. This is based primarily on the fact that SW:TOR was a huge investment that is very far from meeting expectations financialy.

     

    The only 2 factors that I see shortening the time to impact (shutdown) is a) LucasArt having a destruction button in their contract or b) EA blowing up financialy and going into bankrupcy. I see both alternatives as realistic given the circumstances (financial markets) and the IP involved (destruction button).

  • fenistilfenistil GliwicePosts: 3,005Member

    EA problem is wanting to make ALL of their games multimillion successes and betting idiotic amounts of money on it by putting all those increadibly long FULL VO cutscenes every 30 second in the game AND overspending on marketting.

     

    Sure every company wants their games to sell as best as possible, but overspending and making shallow, sluggy games that are sorry compromise gameplay wise that not satisfy many people cause it need "borad appeal". This + rampant monetarization in many (not in all games I will give them that) games, releasing games too early,  etc

    "Making games is same as selling carrots or making cars" - guess what? It is not. Until managment and whole EA philosophy will not change until then they will lose long-term wise.

     

     

    No wonder it plummets. It will contntinue to do so as I don't see EA changing.

  • zevni78zevni78 grimsbyPosts: 1,133Member Uncommon
    Short sighted greed seems the grip EA, I'm playing C&C:TA right now, and EA just pissed off over 90% of the community by disabling all scripts needed for add-ons. Now, the problem is that one add-on, the Combat Simulator, is not only needed to avoid some of the pay to win in pvp, but the random and wasteful repair times that prevent you from playing more than once a day.
     
    However the main problem is that the com-sim is actually more fun to play with than the rest of the game, without it it’s just a few mins of attacking and positioning a day, but the sim allows for hours of strategic simulations and experimentations, now some could call it cheating, but it should be a standard feature, it is in other similar EA titles, and as we can all use it, and it improves game play no one who knows the sim was complaining.
     
    EA got greedy, as the handicap they created of massive repair times forced everyone slow down, they figure therefore spend longer playing and paying real money, but it doesn’t work that way, if sessions where faster we'd enjoy them more, and be willing to pay real money more often. As it is, a huge number, (See the forums threads) of players are quitting or pledging not to pay real money till the add-on returns. It could kill the game.
  • gervaise1gervaise1 .Posts: 2,065Member Uncommon

    EA's stock was going down last year but last summer there was a lot of hype around SWTOR, visions of lots of monthly income like WoW etc. and the stock recovered somewhat. With SWTOR failing to match the hype maybe EA's stock pri ce has resumed a downward course.

    The other big issue is that EA have downsized the number of major titles they produce / publish. Last (this?) quarters one and only big title: Kingdoms of Amlar which they didn't even make. Once they published dozens of sub-par games and a few diamonds in the rough (bugs, bugs, bugs) now they publish just a few sub-par games and the odd diamond - still in the rough.

    And in the social market - which they have bought into at high cost - they have a lot of competition.

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