Why EA Will Never Be Great Again

While everyone loves a good turnaround story, Electronic Arts isn't it. The company has dug its own grave with incremental game improvements on known sports franchises. Recently, the company's efforts to fight online piracy also created a poor user experience and crashed its servers, making potentially blockbuster games unplayable.

Lastly, these damaging trends stand against a backdrop of a weakening video-game environment across the board. Video-game consumption has shifted to online and mobile environments, and with that has come cheaper games in the form of apps that satisfy users' demands. 

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  • Report this Comment On March 24, 2013, at 1:58 PM, TheFitz17 wrote:

    Ludicrously skin-deep analysis. I'm withholding judgement on EA's future, but these reasons are absolute non-factors towards a conclusion that it "will never be great again".

    Sports games are an absolute cash cow for EA. Perhaps the analyst fails to realize FIFA has seen dramatic growth and is primed to challenged CoD as the #1 revenue property in the industry. Madden and other properties in that space are also demonstrating growth. His urban myth proposal of incremental change driving customers away is completely out of touch.

    And to suggest Sim City is a watershed of impending doom for EA is equally ridiculous. All companies are heading to GaaS models with meaningful server interaction benefit affording consumer value and reduced piracy as an offshoot plus for the company. EA dropped the ball here on the infrastructure at launch, no question. But that has incredibly little to do with the long term health of the company or the macro trend of the industry.

  • Report this Comment On March 25, 2013, at 1:14 AM, Mark2013 wrote:

    Sure, ZNGA will be the $50 stock in four years, a powerhouse that instead of weak Yahoo buying, ZNGA, I believe ZNGA will buy Yahoo to have it's personalized gaming search engine and 33 years investing/trading wisdom tells me this.

    As for the other stock in question, no, it does not have thousands of percentage points coming in gains like ZNGA, the soon the be Apple of gaming but never say never per any stock.

    JMHO

    Im long ZNGA obviously, and will be adding shares the next ten trade days when time is wise for me.

    All that said, agree with my opinions or not, I wish, longs, shorts and others great luck in ur own picks.

  • Report this Comment On March 25, 2013, at 9:05 PM, AlwaysRunning wrote:

    "Video-game consumption has shifted to online and mobile environments"

    This is not true, and I'm sick of seeing this repeated everywhere. EA and other publishers want to blame their poor sales on this lie, but the fact is, their premier games have begun to stink.

    Several of the game industry problems are highlighted in this very article: 1) Yearly franchises that lose gamer interest through oversaturation. 2) Stagnation, repetition and market-flooding of genres. Activision did this with Guitar Hero. Right now, the First-Person Shooter is approaching collapse. 3) Anti-consumer practices such as Always Online DRM, Online Pass restrictions and nickle-and-dime Downloadable Content unlocks for content already on the disc.

    The mobile and social online markets are NEW categories of gaming which appeal to a distinctly different type of person from the traditional gamer. They are the people who bought a Wii because it was in the news, and then never bought any games for it, and won't buy another console or game PC ever again. They are grandmothers and people wasting time on the bus. They are a new segment of gamers, not a shifting category.

    The traditional, at-home, big-screen gamer did not shift! We're waiting for games that are worth playing! We are sick of Generic War Shooter 10, Yearly Franchise Entry 8, and fed up with being treated like criminals who must be watched at all times through broken Digital Rights Management systems. The game publishers are killing the market through incompetence.

    SimCity was a perfect example of this. Gamers were excited and enthusiastic to be able to return to a cherished classic experience after a long break (absence--not yearly entries--makes the heart grow fonder). But what they found was EA telling them that how the customer wanted to play the game was wrong! That wanting to build their cities by themselves, without social online features, was wrong. That wanting to have a finished product that doesn't need to be patched and constantly updated, well, that just isn't how games work these days. And, most of all, that you must be watched at all times to make sure that you are playing the way that EA wants you to play.

    This is the new norm: The customer is wrong!! Publishers know better! This is what will kill gaming for the second time. It happened in 1983, and it will happen again. It's not just EA that is going down.

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