Sullla said:
Wow, that's incredibly harsh and unnecessary. Yes, EA has a deserved reputation for sticking with the tried and true rather than pursue innovation, but they are also a well-run business that serves as the model for how third party publishers should act. EA is one of the very few companies in the video game industry that consistently maintains profitability, year in and year out. They clearly know what they're doing. If you don't like their games, vote with your wallet and don't buy them. That's the best way to get them to make better games in the long run. Now with regards to the specific Wii complaint, EA is simply doing what it does best: reading the market and adjusting accordingly. EA initially threw most of its support behind the 360 and PS3, the expensive high-end consoles. As a result, their profitis were way, way down from previous years. I went and pulled up their earnings report from this past year just to prove this; here's a link for the curious: http://library.corporate-ir.net/library/88/881/88189/items/250822/2007AnnualReport.pdf (skip ahead to page 100 for the relevant information) Over the past four years, EA's net revenue has remained fairly constant at around 3 billion dollars annually, while their gross profit has remained at about the same figure, $1.9 billion. But look at what happens to their operating expenses: the balloon upwards with each year of the "next-gen" consoles! Total operating expenses: 1.08 billion (FY04), 1.26 billion (FY05), 1.45 billion (FY06), 1.84 billion (FY07). Nearly all of those expenses are coming from increases in research and development (ie, the cost of making these "HD" games); R&D costs more than double from $511 million in FY04 to $1,041 million in FY07. As a result, EA's profitability drops steadily every year over this period, from $577 million in FY04, to a paltry $76 million last year in FY07. If you read further, EA tries to explain away their falling profits with a bunch of words about "generational change" and "transition costs", but the writing is on the wall. Developing for the 360 and PS3 is not paying off. Is it any wonder then that EA is shifting towards more Wii support? The publishers that threw the most support behind the Wii and DS (Ubisoft and Majesco) are reaping huge profits this year. Gamespot even has an article today about how Majesco has recovered from the verge of bankruptcy thanks to developing for Nintendo. What EA is doing is not called "being a whore", it's called good business. Or should they act like Take-Two, and utterly destroy their company's finances just to produce "hardcore" games that fail to turn a profit? |
awesome post. thanks for looking up all those numbers.
the Wii is an epidemic.
