EA Boasts Record Revenue, Pledges Nintendo Support

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EA Boasts Record Revenue, Pledges Nintendo Support

Posted by Zonk on Friday February 2, 2007 @04:55AM from the economic-giants-love-the-wagglemote dept.

Gamastura reports on EA's record-breaking revenue for the 2006 Christmas season. The company reported $1.281 billion in their revenue stream, fueled by the Sims, Madden, and Need for Speed franchises. The company's financials talk was also a surprise opportunity to pledge support for Nintendo consoles. Electronic Arts aims to be 'the #2 publisher' for the Nintendo DS and the Wii. The company has 15 products already in the pipe for the two platforms, with a DS version of both Spore and The Sims slated for release this year. This move, CEO Larry Probst was quick to point out, is not at the expense of the other systems. Their acquisition of the Headgate studio has given them additional resources, and they are choosing to 'aggressively' pursue the marketplace.

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Here's what they really mean... by Manchot · 2007-02-02 05:00 · Score: 5, Funny

Translation: We bet our money on the wrong horse, and now we're going to make up for it.
1. Re:Here's what they really mean... by Anonymous Coward · 2007-02-02 05:29 · Score: 5, Interesting
  
  Translation: We bet our money on the wrong horse, and now we're going to make up for it.
  Is that the translation to this?:
  This move, CEO Larry Probst was quick to point out, is not at the expense of the other systems. Their acquisition of the Headgate studio has given them additional resources, and they are choosing to 'aggressively' pursue the marketplace.
  Doesn't sound like they thought they bet on the wrong horse so much as they see an additional business opportunity that wasn't there in the Gamecube days. All this talk about "winners" and "losers" in the console "war" is not as relevant as many people might think to companies like EA.
  
  As far as EA is concerned, they'd like see everyone sell lots and lots of consoles and they'd like to cash in on all of those sales, not just the sales of a "winner." The company that sells the most consoles is irrelevant to them as long as all the consoles sell well. Nintendo is doing very well, but no better than the 360 according to December's numbers. There's some debate over which console actually won in that month, but EA doesn't give a rat's ass. All it cares is that it gets to make money from both of them.
  
  They're not betting on a different horse, they're betting on a different sport altogether. They're betting on a sport where you can get 10 to 1 odds on every player and only 3 people are playing. I don't know of any real sport like that, but with odds like that, I'm sure they feel pretty good about spreading their money around.
2. Re:Here's what they really mean... by HappySqurriel · 2007-02-02 06:06 · Score: 1
  
  Actually, I would suspect that this announcement has more to do with Nintendo's strong showing at E3 2006 than with the current sales rates; it's been years since I was in the industry, but I suspect that many publishing executives saw the 6 hour line-up for the Wii and were shocked about the popularity (which resulted in a level of panic to find ways to support it). EA buying Headgate Studios in December means they were probably looking for months to find an adequate studio, and then spent months working out a deal to buy the studio, so I imagine they started looking in June/July.
  
  I anticipate that, if sales continue in the direction they are currently in, in August or September you will hear of more support heading to the Wii as developers look to minimize damage from supporting an expensive to develop for small userbase system. (This is just a guess though)
3. Re:Here's what they really mean... by Aladrin · 2007-02-02 06:16 · Score: 1
  
  Don't forget that what they say is not what the mean, or even the truth, necessarily. They cannot say 'Oh yeah, the DS rules and screw all the other consoles' because they'll violate several agreements and people won't buy the already-existing and soon-to-exist games for those systems after they've said that. Sometimes when someone protests too violently, you should take the protest with more than a grain of salt. 'quick to point out' is a good indicator of this.
  
  --
  "If you make people think they're thinking, they'll love you; But if you really make them think, they'll hate you." - DM
4. Re:Here's what they really mean... by joshetc · 2007-02-02 06:48 · Score: 1
  
  Wait.. what did we miss out on in the Gamecube days? I have 4 different Maddens for gamecube, as well as Sims2 that my ex forced me to purchase.. Need for speed: underground 2. Just about all their other sport games have been out for gamecube during its lifetime. Are there actually any games that didn't make it to Gamecube?
5. Re:Here's what they really mean... by hal2814 · 2007-02-02 07:09 · Score: 1
  
  NCAA Football games after about 2004 didn't make it to the Gamecube. I was a little cheesed about that since I prefer them to Madden but I didn't exactly cry myself to sleep over it.
I for one by RichPowers · 2007-02-02 05:02 · Score: 4, Funny

Am looking forward to playing The Sims, Need for Speed, and Madden on Wii and DS because I simply couldn't get enough of them on PC , Playstation, and Xbox. Oh, and please tell me EA will release The Sims expansion #1-9 for the Wii, but not at the same time as Madden 2008 or Need for Speed: Even Faster 6, because I might not be able to afford them all...
1. Re:I for one by wframe9109 · 2007-02-02 05:43 · Score: 1
  
  So let's dismiss potentially entertaining games because you despise EA or the myriads of sequels they plow into the ground.
  
  I'm assuming you haven't tried Madden for the Wii? Do you think there might be even a drop of whats to come from the from the fact that it was better received than the Madden's on both other consoles?
  
  Have you seen the screenshots of Sims for the Wii?
  
  You obviously should not post before thinking.
2. Re:I for one by RichPowers · 2007-02-02 05:55 · Score: 0, Offtopic
  
  Playing the Wii must be tough with that huge stick up your ass. Chill out, man. I was just making fun of the fact that EA has had the same three cash cows for years. I'm a PC gamer too, so I could care less about any console :P
3. Re:I for one by HappySqurriel · 2007-02-02 06:14 · Score: 1
  
  Actually, Wii Sims looks to be a lot different then other versions of the Sims ... From my very limited understanding, it looks like it is a combination of The Sims and Animal Crossing (trailer) which could be either really good, or really awful.
  
  It is currently a game I am watching both because I think it looks a little interesting, and because I know my Sister in Law and Niece would love it.
4. Re:I for one by webheaded · 2007-02-02 06:55 · Score: 1
  
  Actually, I think what you mean is that you could NOT care less. Saying you could care less implies that you care a little.
  
  --
  "Those who would sacrifice essential liberties for a little temporary safety deserve neither liberty nor safety." - BenF
5. Re:I for one by webheaded · 2007-02-02 07:07 · Score: 1
  
  Oh, and I don't usually do the grammar nazi thing with random people I don't know...but taht has to be one of the most retarded inaccurate phrases to ever come into existence. x_x
  
  --
  "Those who would sacrifice essential liberties for a little temporary safety deserve neither liberty nor safety." - BenF
6. Re:I for one by Anonymous Coward · 2007-02-02 07:24 · Score: 0
  
  Nonsense; it's a matter of tone. Think about it.
  
  If you use a tone that's like "Well, I *could* care less, I suppose...", that implies that while you care a little, it's an extremely small little.
  
  If you say "I could care less." in a kind of factual, disinterested way, your very lack of interest in your own level of caring is a kind of demonstration of your lack of interest in the topic.
  
  It's difficult to find a case where someone would express that they DID care by pointing out that they could care less -- just like few people would praise a painting by saying that it could be worse. The complaints about the expression are due only to the apparent paradox that a statement and its negation would have a similar meaning. However, that should be taken more as wordplay than as an error.
7. Re:I for one by VJ42 · 2007-02-02 09:34 · Score: 1
  
  I think it's an Americanism, I'm a Brit, and the only place I ever see that phrase is here on slashdot. Here in the UK, "I couldn't care less" is the way the saying goes.
  
  --
  If I have nothing to hide, you have no reason to search me
8. Re:I for one by webheaded · 2007-02-02 10:19 · Score: 1
  
  I think you're missing the point. I know what it means, but its still wrong...completely. Just because its a commonly used phrase dose not mean the words are being used correctly. Yes, we know the intent of the use of "I could care less there," but again, its still utterly wrong.
  
  --
  "Those who would sacrifice essential liberties for a little temporary safety deserve neither liberty nor safety." - BenF
This is a sad sentence to read. by Wilson_6500 · 2007-02-02 05:04 · Score: 1

The company reported $1.281 billion in their revenue stream, fueled by the Sims, Madden, and Need for Speed franchises.

See the subject line. If it needs explanation, you'll probably never get it.
1. Re:This is a sad sentence to read. by Anonymous Coward · 2007-02-02 06:13 · Score: 5, Insightful
  
  The company reported $1.281 billion in their revenue stream, fueled by the Sims, Madden, and Need for Speed franchises.
  
  See the subject line. If it needs explanation, you'll probably never get it.
  Why do so few Slashdotters appear to be interested in these genres? I rarely hear them talk about driving games and I never hear them talk about sports games. Despite this, both show up quite frequently in the top 10 of game sales charts. The Sims, which consistently dominates PC game sales, is talked about more often, but far less than Final Fantasy games, which don't show up in top-10 charts very often.
  
  Someone is buying all these sports sports and driving titles. Doesn't it leave a pretty huge segment out of the discussion when Slashdotters talk about how this or that console will "win" because it plays this or that type when so many of the people playing some of the most popular games aren't represented? HDTV is very popular among sports fans relative to the general population, so doesn't it leave a gaping hole in the discussion of whether or not HDTV is necessary for game consoles when only geeks talk about it?
  
  We are Geeks, but most people aren't. Lots and lots of non-geeks play video games. Presumably they're also buying lot and lots of game consoles. Why do we presume to know so much more about what console will "win" than they do? All we have to do is look at the sales charts to realize that they're as likely or more likely to decide which console lands on top in the new generation.
2. Re:This is a sad sentence to read. by fistfullast33l · 2007-02-02 06:44 · Score: 1
  
  Wish I had modpoints for you. Definitely an insightful post.
3. Re:This is a sad sentence to read. by Kelbear · 2007-02-02 07:21 · Score: 1
  
  Not all Slashdotters are geeks, though you may see more of them here. There's a certain amount of crossover between Digg and Slashdot, though I'd expect a demographic difference. (I'd like to see some surveys regarding this, it'd be interesting).
  
  But Slashdot has quite a few average joes like myself. Middle income, B.A education. Not employed in tech industries.
4. Re:This is a sad sentence to read. by Anonymous Coward · 2007-02-02 07:45 · Score: 0
  
  Yeah, it must be terrible for you to find that other people may have different tastes than you.
5. Re:This is a sad sentence to read. by Speck'sBacon · 2007-02-02 08:18 · Score: 1
  
  So you turn up your nose at the popular "mainstream" franchise titles. Apparently Madden isn't intellectual enough. I dislike when people just drip sarcastic, intellectual elitism all over the place because their own pet book/game/movie/etc. just isn't popular with the general public. God forbid someone like sports titles (Madden), or arcade racing (Need for Speed). And for Pete's sake... Sims (if not all the spin-offs) is the responsibility of geek hero Will Wright. I like my share of esoteric software titles or movies, and I'm proud of it, but I don't trash "popular" culture like it's somehow beneath me.
EA Boasts and Pledges by xxxJonBoyxxx · 2007-02-02 05:05 · Score: 2, Informative

EA Boasts Record Revenue...
So what? How's profitability?
...Pledges Nintendo Support
Really, I'm shocked. A major game publisher is announcing support for a major game platform?
I want Spore on the Wii, not (only) on the DS! by GozzoMan · 2007-02-02 05:10 · Score: 1

Ditto.
1. Re:I want Spore on the Wii, not (only) on the DS! by aikouka · 2007-02-02 08:04 · Score: 1
  
  Ugh, not another 3D game going to the DS. I mean, we thought Superman Returns couldn't get much worse, but the DS showed us that it could! ;)
  
  Well, let's hope EA can prove the trend wrong.
profits were down 38%, maybe 50% without tricks by xxxJonBoyxxx · 2007-02-02 05:15 · Score: 3, Interesting

From TFA...
profits were down 38%
On increased revenues? Sounds like the company's up a creek. If sales tank next quarter (because they've flooded the market seeking raw sales), I'd look for a loss.
movements in foreign currency rates positively impacted net revenue by $33 million
Um...yeah. Nice accounting trick. So, without that extra $33M, you're saying that EA is now only HALF as profitable as it was last year? ($259M vs. $127M - sell, sell, sell...)
1. Re:profits were down 38%, maybe 50% without tricks by nomadic · 2007-02-02 05:23 · Score: 1
  
  On increased revenues? Sounds like the company's up a creek. If sales tank next quarter (because they've flooded the market seeking raw sales), I'd look for a loss.
  
  I bet it's just because they overpay and underwork their programmers.
2. Re:profits were down 38%, maybe 50% without tricks by Anonymous Coward · 2007-02-02 05:43 · Score: 0
  
  Without seeing the actual report, you don't know why their costs are what they are. For example, did they spend a lot more money this year getting games ready for new console launches? Is this just a high development year in general because they slacked off more last year while waiting for older consoles to die? The article mentions at least one acquisition. How did that affect profits? What was their operating capital?
  
  I don't know the answer to these questions, but unless you do, you can't claim making a lower profit actually means anything. In fact, according to TFA, analysts thought this report was positive and bought up stock as a result. Greater revenue, on the other hand, shows that people are buying their product either in greater numbers, at higher prices, or both. It implies that if they can bring their expenses down, or make even more revenue based on those expenses, that they have a very good chance to be much more profitable in the future.
  
  This is no a "sell, sell, sell" situation.
3. Re:profits were down 38%, maybe 50% without tricks by Anonymous Coward · 2007-02-02 06:36 · Score: 0
  
  You have that backwards; they underpay(ed) and overwork(ed) them, to the point that the games they released sucked. Now that they aren't overworking them w/o paying overtime, the games are probably getting a little better - but I don't know and can't figure out, because I refuse to buy any EA software anymore. The not fixing BF2's many problems was the last straw for me.
  
  It's really too bad, I was looking forward to trying Spore.
4. Re:profits were down 38%, maybe 50% without tricks by Anonymous Coward · 2007-02-02 07:51 · Score: 1, Insightful
  
  profits were down 38%
  On increased revenues? Sounds like the company's up a creek. If sales tank next quarter (because they've flooded the market seeking raw sales), I'd look for a loss.
  
  Thank you for your insight, Mr. Business Analyst. I guessed you missed the first class, where we learned that it takes three points to make a trend.
  
  Please come back to us with the data for the last three quarters, so we can see if your amazing prediction still holds true.
EA would like to thank.... by Anonymous Coward · 2007-02-02 06:28 · Score: 1, Insightful

... the hoardes of developers working 60 hour weeks for a pittance so that we could release Super Sims Expansion 2039 and Madden Year++ Edition.

Oh, wait, that's praise. Clearly a perk. BACK TO THE COALMINES WITH YE.
1. Re:EA would like to thank.... by Anonymous Coward · 2007-02-02 07:17 · Score: 0
  
  Getting out of that coalmine was the best thing I ever did for my career. Getting into it in the first place was the second best thing.
Spore on the Wii... by Chordonblue · 2007-02-02 06:45 · Score: 1

Double Ditto...

--
"...Well, there's egg and bacon; egg sausage and bacon; egg and spam; egg bacon and spam; egg bacon sausage and spam..."
Re:I for one, or Worshipping our Wii Masters by WillAffleckUW · 2007-02-02 07:01 · Score: 1

I agree, Wii Sims is a really cool version, allowing one to import your Mii characters from your Wii, visit your real friends villages/towns, and trade clothing and such stuff.

Plus a rocking soundtrack and cool Anime-feel make it really fun.

It's a very hot topic in Fremont, Center of the Universe.

--
-- Tigger warning: This post may contain tiggers! --
AC makes a good but irrelevant point. by Wilson_6500 · 2007-02-02 09:02 · Score: 1

Who cares about which console "wins"?

I'm lamenting the _very fact_ that gaming has gone mainstream. I frankly don't care to consider what the huddled masses are buying, because I don't believe those franchises are advancing games as a medium. OK, it's wonderful that lots of people out there enjoy their shiny new camera angle every year--what I (and most gamers who've been around for a while--an unfortunately shrinking proportion of "gamers") care about are things like "plot" and "innovation" and "fun." It's great that people get enjoyment out of buying a new Madden game every year--those of us who feel like we've had our hobby stolen from us generally DO NOT enjoy that sort of thing, and we're going to complain to beat the band.

So I say again: who cares what console "wins"? Who cares what people are buying? I'm not a shareholder in EA. I don't care if the company sinks or swims except insofar as it hurts or helps my gaming experience. I'm a gamer, and I'm bemoaning the downfall of my hobby.

(For the record and in the interests of disclosure: I'm a PC gamer. I frankly would like to see all the consoles lose so that they'll stop grabbing all the market share; PC gamers would hopefully then stop seeing crappy console ports cropping up.)
1. Re:AC makes a good but irrelevant point. by Anonymous Coward · 2007-02-02 15:07 · Score: 0
  
  You lament a 'shrinking proportion of "gamers"' that share your viewpoint. Ok, defenders of art have a certain license to convince others they should acknowledge the qualities their art was forged with.
  
  You mention "plot," for example. How good was the plot in Pac-Man? How about Space Invaders? Pong? Space War? You added the element of plot because that's what you desire, not because it was an important element to classic games.
  
  You decry gaming going mainstream, but gaming has always been mainstream. Early arcades were not visited primarily by geeks and every kid wanted an Atari. The exclusive club was your invention.
  
  You complain that you want games to be "fun" but games started out serious (Tail Gunner, Defender, Space Invaders), grew with seriousness (Contra, Narc and and many fighting games) and continued on to the deadly serious (Doom, Quake). The fact that you want fun won't erase the fact that serious games are a mainstay of the gaming community.
  
  Football and driving games were some of the earliest video games, and just about the only thing you could get on a handheld in the early 80s. But you complain that that "gamers" as you define them, don't want those things.
  
  They didn't steal your hobby, you stole their entertainment. You started playing their games, remade them into something you liked, and now you claim they're ruining it for you because they wont follow your lead into the types of games you declare to be good. They're asking the same things from games they've been asking for all along. You're the one who's changed.
  
  The answer is simple. Stop complaining that you want more market share for your kind of games. Telling Americans they should switch to Chimay because you think it's better than Budweiser (it is) is just silly. Enjoy your niche. There are far more innovative, fun and plot intensive games than there ever have been. Forget market share. There are more of them, then there are of you, but you have lots of great stuff to choose from. 10% of a thousand is 100. How many games come out every year? If the vast majority of them suck, you cans still have fun for ages with the ones that don't. Finally, let the other be. Let them enjoy their Budweiser, Burger King, shopping malls and Madden. It doesn't hurt you in the least, so you don't have to be pissed at them. Even if you insist on staying pissed, you might want to keep in mind that they have more of a right to pissed at you, than you do at them. They were here first.
2. Re:AC makes a good but irrelevant point. by madprof · 2007-02-03 13:03 · Score: 1
  
  How the heck can other people gaming somehow steal this hobby from you?
  Just don't play the boring games. That's simple to do, isn't it?
3. Re:AC makes a good but irrelevant point. by Wilson_6500 · 2007-02-03 13:19 · Score: 1
  
  Well, think about it. If developers see that there's lots more money to be made in sequel-churning than in fronting risky but potentially innovating games, or redefine "risky game" to include anything that ISN'T a sure-fire bet, don't you think they're a lot more likely to put a lot more money and time behind things that aren't risky? Don't they have limited budgets? Doesn't that leech money and "talent" away from more risky projects? Games _are_ getting more expensive to develop, and it's going to be harder and harder for smaller developers to stay in the game--after all, as the masses enter the hobby, they're going to have expectations that everything looks at least as good as Madden and has licensed music like NFS. The proportion of "old" style gamers will naturally drop over time until _everyone_ has those expectations, no matter the type of game.
  
  Let me put it another way: do you think that EA would've come out so strongly in support of the Wii back before they knew exactly how popular it would turn out to be?
Game Analysts by HappySqurriel · 2007-02-02 10:41 · Score: 1

I understand what you're saying, and I agree to a certain extent, but I must disagree with your assumption that the people who read and comment on Slashdot would not be reasonably accurate on what can (or will) happen in the videogame industry.

Basically, every time you see a story posted about a Game Analyst predicting what will happen you will see hundreds of replys which either generally support the analysis or disagree with it. From what I have seen, if you read the well written comments which include reasonable reasoning you will usually get a far better idea of what will happen than if you read the article. After the price of the PS3 was announced at E3 earlier this year most slashdot users were talking about how difficult the PS3 would be to sell at that price regardless of the technology that was built into it; analysts still believed the PS3 would dominate. Today, analysts are trying to catch up to catch up to where the average slashdot user was 6 months ago.