EA Stock In Free Fall

Posted on December 10, 2008 by Scott Jennings| 17 Comments

Well, that’s not good.

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  • Tesh

    Not good… but is it a surprise? The economy is tanking as a whole, and EA seems to hate its legal customers more than pirates.

  • http://www.mordiceius.com Mordiceius

    I’d disagree Tesh. I think that in the recent year or so, EA has been really been taking some steps to rectify past mistakes. Sure there are some dumb decisions here or there, but I think overall my image of EA has improved over the last 12-18 months. I think Activision has far more become a blight on the industry than EA is. It is unfortunate to see things going so badly for the company after they have started making some really good steps in the right direction.

  • Breed

    with 92% of the stock held by institutions. I would place any value in the movement.

  • syncaine

    Plus a 20% drop is hardly something to consider a ‘freefall’ in today’s market, considering the overall average moves +-5 points almost daily.

    Not to mention the entire sector is grossly over-sold due to institution profit taking (GME anyone?), and will be first in line once money starts flowing back in.

  • Mercury

    Guh! 12% in a day is rough. I love some of the quotes from the analysts, though.

    Mercury, most hated automator: “I had to close some of my other short positions to short this stock even more. My advise to you is to buy, however. So get out there and buy.”

  • TPRJones

    Good!

    Take that and shove it up your SecureROM, EA!

  • http://tidehorizon.blogspot.com Tide

    It’s 25% over 2 days and nearly 50% year on end. But whatever. Can’t say it’s all doom without knowing their debt (or bothering to look). Not like they’re Funcom….

  • Brask Mumei

    I find it very curious that Spore, a game I have resisted buying due to rumours about the crappiness of included DRM, is listed by the commentators as one of the most pirated games, with some 1.7million stolen.

    So exactly what good did all that DRM do again? If it hadn’t existed, I know there would have been at least one more purchase as spore was long running on my “buy regardless of quality list”…

  • TPRJones

    Same here, Brask. Once I found out what was in it I cancelled my pre-order.

  • EricFate

    No amount of image improvement will undo the past. Aside from leaving me jaded, they repeatedly failed to come up with modern product offerings that interest me in any way. On top of that, they absorbed (and destroyed) each of those companies who were able to craft the kind of games that were able to separate me from my money.

    If they tank, so be it.

  • J Thomas

    “Can’t say it’s all doom without knowing their debt (or bothering to look).”

    EA isn’t saddled with large amounts of debt. Their balance sheet still looks fairly healthy, though not as good as it did a couple of years ago. The problem is that they’ve been operating at a loss for several quarters now, and their numbers keep trending downwards even though revenue has been increasing. EA already has reported a net loss of $405 million over the first two quarters of fiscal ’09. Sounds like they’re on track to hit well over a billion for the year.

  • Dave Rickey

    They have two major boat-anchors around their neck that makes their $2.5B cash reserve not look so great:

    1) They backed the wrong console contender (PS3), and snubbed Nintendo. They were the one publisher with the muscle to get a good deal out of Nintendo, and they decided not to try. On the plus side, they paid for the OJT of a whole generation of Cell programmers, for which IBM should be truly thankful.

    2) Their sports exclusives are costing them a fortune, and the economics of them were predicated on a core audience that would buy every single title for a particular sport they put out, even though it was just the same program as the year before with new rosters.

  • elijah

    maybe if games didnt cost 60 bucks a pop for 4 hours of real excitement…

  • http://www.david-mcgraw.com David McGraw

    That’s a discount.

    Everything is in a free-fall. People are still in fear mode.

  • Iconic

    I do wonder if EA is maybe hit harder by the current economy than other game makers due to their underlying strategy.

    Specifically, EA’s strategy seems to be: Throw a lot of stuff against the wall until something sticks. When something sticks, iterate it until there’s nothing left, selling each iteration to the same audience over and over (The Sims, Madden, Command and Conquer, etc).

    EA’s entire strategy is in creating franchises and then just making money off of that franchise every year like clockwork.

    Compare to the Nintendo strategy of establishing the brand and characters, and then putting out a bunch of standalone titles that refer back to the same brand/characters.

    If you have a limited amount of money to spend, do you want to spend it on a game that you know is going to be fresh and probably full of quality, or do you want the same game you’ve already bought five times?

  • Queso

    How do they exactly know how many games are stolen?

    Oofda!

    Anyway, I bought Spore, caues the online stuff wont work on a pirated copy. Plus I wanted to support Will Wright(A man that is way richer than I ever will be), cause I like his games.

  • Cillasi

    EA is being hit just like any other company in today’s economy, however, their insistence on using Securom has had its effect on sales too.

    Speaking from experience, the quality of their expansion packs and stuff packs for The Sims 2 has deteriorated to a point where installing one can cripple your game and EA may have you cooling your heels for months before releasing a half-ass patch. The hackers (independent coders?) have fixes out for most of the problems long before EA does.

    EA has become so arrogant that lots of bugs aren’t fixed at all except in the next expansion, if at all, and EA even has the audacity to tell you that installing a patch to fix their garbage may not work on existing objects/lots/neighborhoods… . So basically you can just replace whatever is affected and start again or deal with it. When the object of the game is basically to develop perpetual neighborhoods, this is unacceptable.

    They have totally forgotten our third option – don’t buy it!! The Spore disaster may have started to bring that home to them. They did loosen up Securom restrictions and they are being sued because it seems that Securom has the ability to disable hardware and software, turning some non-computer savvy users’ computers into doorstops.

    Finally, as long as game producers don’t have to accept returns on open boxes, they can continue to release garbage to the public with impunity, so once a company gets a reputation for bad and buggy software, its sales are going to take a hit and a few more potential customers cross over to the “dark side.”