Analyst: EA Has Missed The Boat This Generation
See Full ImageBack in 2007, new PlayStation 3 owners and publishing giant Electronic Arts were at odds. The problem was that EA titles were either crappy 360-to-PS3 ports, or worse, multiplats released simultaneously that were inferior on Sony's machine.
And although we've seen great growth in ability since then, one analyst simply says that EA has "missed the current hardware cycle" and aren't likely "to return to historical operating income margin levels" at any time in the near future. This Cowen Research report, summarized by GamesIndustry.biz, isn't exactly glowing and concludes that after more than a few disappointments, "Electronic Arts now deserves a lower valuation premium than the company has historically enjoyed." Basically, they've failed to deliver on their earnings projections, and despite the excellence of two IPs in 2008 (Mirror's Edge and Dead Space), EA has continually toned down their guidance for the next fiscal year. However, the report does say that while EA's projections for the upcoming financial year are "aggressive," they're not impossible. Provided they do some more cost-cutting, their revenue target of $4.3 billion might be achieved, and right now, the share rating advice for EA is "neutral." You should definitely read more about the report, and the games and how they've performed; it's quite interesting.
For our part, we've already forgiven EA for their early transgressions and provided they keep giving us special projects that are worthy of our collections at home, we're happy. It's all about the games for us. ;)
5/26/2009 Ben Dutka
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