Gamasutra is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Gamasutra: The Art & Business of Making Gamesspacer
View All     RSS
September 26, 2021
arrowPress Releases
If you enjoy reading this site, you might also want to check out these UBM Tech sites:

Analyst: EA Might Have Missed Its Shot This Cycle

Analyst: EA Might Have Missed Its Shot This Cycle Exclusive

December 22, 2008 | By Leigh Alexander

December 22, 2008 | By Leigh Alexander
More: Console/PC, Exclusive

Is Obi-Wan the only hope for Electronic Arts? Cowen Group analyst Doug Creutz thinks so, suggesting that the publisher may have missed the boat on a meaningful core market strategy for the current console cycle.

Creutz says the upcoming BioWare MMO Star Wars: The Old Republic is EA's "best chance" at improving its profitability -- but even that, he says, might be hampered by World of Warcraft's market dominance.

Concerned about the company's future profitability, Creutz says he is "slashing" estimates for EA's 2009 because of the company's "inability to develop hit core-gamer console titles."

"The company continues to struggle to deliver quality improvements where they are most urgently needed," Creutz adds. EA's recent cost-cutting measures, the analyst stresses, need deeper and more efficient research and development to benefit the company, and so the analyst's outlook for EA is muted "for the next several years."

On EA's lack of core-focused successes, Creutz says: "We believe much of the blame for this goes to prior management, which failed to incubate new hit franchises heading into this cycle and let aging franchises decline," he says. "Instead, dollars were spent on what were largely low-return projects."

But it's not all the fault of EA's prior leadership, the analyst maintains. The current management may be "guilty of some resource misallocation" -- and Creutz notes the Wii in particular.

"[EA]'s attempt to chase market share [on the Wii] has run up against the reality that third-party economics on that platform are simply not that attractive due to Nintendo’s dominance of the software market," he says.

"As a result, EA has had few owned IP titles that have reached or sustained hit economics over the last several years."

At this point in the console cycle, Creutz argues that the hit franchises have largely been established, and will be increasingly difficult for EA to displace.

"Aside from EA Sports and The Sims, EA really has a stable full of modestly-performing titles, with none offering the type of mega-hit R&D leverage offered by competing titles such as Call of Duty, Grand Theft Auto, or Assassin’s Creed", he says.

Related Jobs

Insomniac Games
Insomniac Games — Burbank, California, United States

Art Director
Square Enix Co., Ltd.
Square Enix Co., Ltd. — Tokyo, Japan

Experienced Game Developer
Insomniac Games
Insomniac Games — Burbank, California, United States

Facial Character TD
Remedy Entertainment
Remedy Entertainment — Espoo, Finland

Development Director

Loading Comments

loader image