EA's Stock Plummets
Author: William Usher
published: 2012-06-21 12:58:29
Electronic Arts' stock continues to see a downfall. It's been steadily declining since December of 2011, and a recent comparison chart shows that not only are core gamers highly dissatisfied with the way the corporation is being ran but investors aren't too pleased, either.
GameIndustry.biz International has up a very interesting read comparing the market ebb and flow for a few gaming studios, namely EA, Take-Two and Activision-Blizzard. The chart is very unflattering for EA, as it shows that while Activision-Blizzard has a nominal standard alongside the NASDAQ index, Take-Two and EA are still sliding, sliding and sliding some more. In the case of EA, they've gone from $23 in December, 2011 down to $12.02 as of the publishing of this article.
For Take-Two it makes sense, they released Max Payne 3 (a niche shooter title) in May to 400,000 copies, according to NPD results, and they have Spec Ops: The Line dropping on June 26th, another niche military shooter. It's not an excuse, but rather an explanation on why Take-Two wouldn't be brimming with interest in the broader market. Everyone already knows that they will see moderate climbs with releases such as Borderlands 2 later this year, BioShock Infinite next year, and the granddaddy of them all, Grand Theft Auto V presumably arriving spring of 2013.
Even still, the general consensus in the gaming community is rather positive of Take-Two and there is a lot of buzz amongst core gamers for titles like BioShock and Borderlands. What's more is that there is a lot of mainstream buzz for Grand Theft Auto, and this game alone will skyrocket Take-Two's stock, much in the same way that Call of Duty each and every year boosts up Activision-Blizzard's stock.
The thing about the charts, however, is that EA isn't quite in that position. Buzz surrounding Medal of Honor: Warfighter is mediocre at best, it's not definitive enough in one area or another to make it standout as a must-have military shooter (one amongst many). Need for Speed: Most Wanted is garnering mixed reactions, some people like the new Burnout Paradise approach while others feel it strays too much from what makes the Need for Speed fun. It still amazes me how EA hasn't figured out that people would willing (including myself) dump $60 to $70 bucks into a well-made Need for Speed: Underground 3.
Nevertheless, EA's fall line-up -- the line-up that houses the muscle-bound powerhouses of the top tier publishers -- isn't all that impressive. It will be facing off against the likes of Assassin's Creed III, Resident Evil 6, Halo 4 and Call of Duty: Black Ops 2.
Couple in sequels with a poor reputation amongst the gaming community and things aren't looking especially rainbow bright for Electronic Arts.
The general consensus is that EA needs to do something to boost investor confidence. It's amazing because just last year investors felt that EA was in a decent position but Activision was not. Then again, this was before the Mass Effect 3 ending fiasco, the day-one DLC uproar, the Dead Space 3 co-op fallout, anything Origin, EA winning Worst Company in America and the somewhat mass exodus of players from Star Wars: The Old Republic. You could argue these things played a small or non-significant part in EA's stock decline and that Take-Two's stock is also falling, but again, Take-Two's stock hasn't dropped quite as bad as EA's and it's not like they're plastered in negative press all over the web.
In the case of EA, this sort of negative press can affect sales, and sales directly correlate to investor confidence, which directly affects EA's stock.
Is there hope for a rebound? Well, there's always hope. But EA really needs to get away from trying to make "smart" business decisions in a creative market driven by creativity. The major issue is that they're alienating the fanbase that keeps them alive in hopes of trying to hit the massive but unpredictable casual market. But their marketing keywords of "broadly appealing" and turning anyone who can swipe their finger across the screen "into a gamer" just really needs to go away.
They're completely missing a big piece of the puzzle though: you need good games to get core gamers to buy and support them, and you need core gamers to spread the word so casual gamers can latch on (i.e,. Call of Duty, Resident Evil, Assassin's Creed, Batman, etc.,) and until EA figures out where they're going wrong and how they're doing the gaming base a disservice with a lot of anti-consumerist measures, it's unlikely to see them grow out of the slump.
You can check out the full rundown of the stats over at GameIndustry.biz
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