EA Deflects Buyout Rumors, Raises Profits, Sheds Jobs

Thanks to GamesIndustry.biz for its article discussing the quashing of rumors regarding media giant Viacom buying Electronic Arts, with Viacom chairman Sumner Redstone (also in the process of privately buying into Midway) saying: "We have looked at the obvious companies like Electronic Arts... but their price is so high, it would be dilutive to our earnings. We have ruled it out." Meanwhile, EA's annual financial report has been released, showing "net revenue for fiscal 2004 was $2,957.1 million, up 19.1 percent", and also confirming "an [in-progress] workforce reduction of approximately 117 personnel in development and administrative departments", following the closure/relocation of "the majority of our leased studio facility in Walnut Creek, California and our entire owned studio facility in Austin, Texas." The financials also note that rising online sales from casual gaming portal Pogo.com was "partially offset by a decrease in subscription net revenue from The Sims Online, Ultima Online, and Earth & Beyond subscription services."

Comments

I Guess Thats Good

[Coyote67]

I guess thats good; the buyout I mean. I doubt the gaming industry needs anymore development being wielded by single parties. EA has too much control in the industry by itself, but EA owned by Vivendi? We're talking about Blizzard, Sierra, and Maxis being controlled by own board of directors, altering gaming so that it exists for the dollar and not for the gamer. Soon enough you'll see games being made not because they are good, but because they will sell on pure name. Soon enough,its the film industry.

I mean Christ! We're talking the majority of our games coming from the same people. Do you really think that is going to create good games?

Re:I Guess Thats Good

[Babbster]

It's called the stock market. You can buy shares of a lot of companies there, including EA). Considering that EA stock is currently going for $52.66 a share as of close yesterday, I think including a share per game would be more than a little counter-productive.

PS- I don't want games designed by the voting of gamers. That way lies disaster more foul than the corporations we have now. As one example, the beautiful graphics of Wind Waker would have died aborning.

PPS- I would note the good and/or interesting games EA puts out (Battlefield 1942, The Sims, Medal of Honor, SimGolf, Black&White, SSX, etc.) but that might get a little too real.

Re:I Guess Thats Good

[Derkec]

You've hit upon one of the most common pieces of advice for people buying stocks. Buy stock in companies whose products you like and use.

Now, if I bought stock in company A, and they proceeded to hand out shares to everyone who bought their product, I'd be pissed off. Why? Because each share that's handed out dilutes the value of my shares, making me lose money. That's why what you're describing won't happen. All the owners of the company (shareholders) would lose money if this program went into effect. Not many of the owners of the company would support that.

Re:Typical...

[mcgroarty]

Hey, if one studio/team/developer isn't effecting a positive return, it doesn't matter if the company is in the black or not. EA isn't a charity any more than any other business is.