EA Banking On The Future

CNET has a good look at the financial plans for gaming giant Electronic Arts. They've spent big money preparing for the shift to next-generation systems, as well as their exclusivity contracts with major sports leagues. An interesting commentary on one of the movers and shakers in the industry. From the article: "The stakes for EA and the entire game industry will be huge in the coming months. Microsoft, Sony and Nintendo all intend to deliver new game consoles over the next year, forcing game makers to spend big to prepare their titles for the new platforms. EA spent $633 million on research and development in fiscal 2005, which ended June 30. That's 20.2 percent of its total revenue, 24.1 percent more than it spent the year before on R&D, and 57.8 percent more than it spent two years ago. In the current fiscal year, some analysts estimate the company's R&D spending could go as high as $725 million."

Comments

One can dream...

[Metapsyborg]

that they will go bankrupt, but us gamers will never get that kind of lucky break.

Missing from the financial reports

[BlackCobra43]

The amount of money spent on strong-arming and trust-building.

EA wil be the death of the video game industry. Mark my words.

R&D? Remake & Distribute?

[malchus6]

EA spent $633 million on research and development in fiscal 2005 Ok, then why is it that all we get is "Sims 12: Surfin The Web", and a host of other Great sequals? Do you need to pay $633mm to finally come up with "Oh yeah, we can put out another Battlefield and NEed for Speed". Or is that $633mm spent on buying exclusivity and licenses of established brands?

Great Games

[Anonymous Coward]

EA makes fun, enjoyable games and that is what they are in business to do. A business is about making profits not giving away their money to employees becuase they don't feel like they are paid well or treated properly. If you don't like your job move on.

I'm not trying to flame but give a different point of view.

Re:Great Games

[Anonymous Coward]

How about this: Your point of view is myopic.

EA makes fun, enjoyable games and that is what they are in business to do.

No, they don't. They buy up other companies who make fun, enjoyable games, then turn them into "franchises" where there is little support, and no service.

A business is about making profits not giving away their money to employees becuase they don't feel like they are paid well or treated properly.

A business is different things to different people. While profits should be the main goal of a company, it doesn't have to be.

But thats not even the point of outrage. Its about a little thing called "Ethics". Abusing your employees = lack of ethics. Abusing your monopoly to gain exclusivity contracts = lack of ethics. Buying a company, firing most of the employees, and turning the game into a stinking pile of crap = lack of ethics.

If you don't like your job move on.

Yeah, I'm sure this gives a company the right to do anything to its employees.

Econ 101

[imstanny]

In a market that has a fast level of rotation/innovation... tech, games, etc. High R&D costs is nothing short of a requirement for survival in an industry.

Easy there fellas.

[MrCopilot]

Do you know how much research it takes to find people who can work 20hrs a day for next to nothing in the U.S.? Sure anybody could do it in India or China, but in California.

Not to mention the numerous meetings to discuss this years catchphrase and logo changes. "EA Sports...It's in the Game." that's 5 million right there.

Then there was all the crack they had to buy for the NFL to give EA the exclusive deal. Plus 64 Research assistants had to scour 32 Cities to find the best priced DrugDealers. Very impressive PowerPoint Presentations that should be linked with Google Maps for the rest of us.

So please before you go banging up on them, remember they have problems too, just like you and me.

I should clarify that some of my favorite games were published by this Soulless Corp. (Undying, AM's Alice, NHL 98, Madden 2001, 2 out of 3 LOTR Movie games)

Don't forget the "Madden effect"

[Hadlock]

While EA has it's fingers in a lot of different pies (genres), EA has had control of the Madden football franchise for the last 15+ years, a title that has consistently been in the top three titles for all systems for as long as anybody can remember. Unless John Madden starts raping and eating small children and ruins the franchise's name, they'll continue to have the income to support the "risk" of investing in R&D.
 
Does EA indulge in unfair/unethical buisness practices? Yes. Are they the 800 lb gorilla of the console game world? Yes. But at least it's nice to see companies pouring cash in to their R&D, unlike traditional R&D companies like HP who have all but given up on developing new technologies. I'd love to see EA take advantage of the next-gen consoles, and give us what we've always wanted - truly photo (video?) realistic sports games, and efficent use of the paralell processing that these games will be so heavily dependant upon in the comming decade.
 
Here's to a billion dollars in R&D by 2009!