The Horrible Things That Could Happen To EA

A recent Gamasutra story noted something interesting in Electronic Arts' financials filing. The company is extremely reliant on brick and mortar retailers like Wal-mart (which made up 12% of its net revenue) and Gamestop (about 15%). Simon Carless, writing at the GameSetWatch blog, takes that analysis one step further and postulates some of the horrible things that could happen to the software giant if the conditions were right. It's all meant tongue-in-cheek, of course, but it's an interesting discussion of how even large companies can be vulnerable to simple issues: "5. Wrong System, Wrong Time! 'Our business is highly dependent on the success and availability of video game hardware systems manufactured by third parties, as well as our ability to develop commercially successful products for these systems.' More specifically, as EA explains, this is the Wii/DS effect in action: 'A platform for which we are developing products may not succeed or may have a shorter life cycle than anticipated.'"

Comments

Re:Hardly a problem limited to EA

[Alzheimers]

It wouldn't be the first time.

Re:Brick & Mortar in control?

[MaineCoon]

They may complain about it, but if I recall correctly the profit margin on video games is 40%-50%, which is comparable to a lot of other products. I think the issue comes when they have a lot of product that ends up not selling for whatever reason, and eats into the massive profits they can make on hot sellers. They don't like that part, and will whine about it, but thats just part of doing business.