Electronic Arts, the world's biggest third-party publisher, has released it's FYQ1 results, showing a hefty loss as development costs and a lackluster 360 offering deliver a significant blow to the balance sheet.
It is thought that EA's dismal Xbox 360 offerings sapped up the majority of the red numbers, a problem compounded by slow sales of the machine due to supply and manufacture issues. The firm's plan was, no doubt, to fund yet more research and development of two new platforms with rampant 360 sales, as well as a steady stream from it's massive current-gen release rosters.
This simply hasn't worked. out. R&D for Xbox 360 is clearly not being remunerated, and EA finds itself in the awkward position of having to support the most expensive development platform ever created in the PlayStation 3, a machine for which it is no doubt rushing software out in time for launch.
Shares have fallen away from the firm, with investors and analysts again illustrating a short-termist attitude to the games industry and yet again displaying their refusal and/or inability to respect and understand the impact of the hardware lifecycle on third-party publishers.
The 26c loss would be money in the bank for anyone willing to take a punt with an eye to selling up on the run up to Christmas 2007.
It is thought that EA's dismal Xbox 360 offerings sapped up the majority of the red numbers, a problem compounded by slow sales of the machine due to supply and manufacture issues. The firm's plan was, no doubt, to fund yet more research and development of two new platforms with rampant 360 sales, as well as a steady stream from it's massive current-gen release rosters.
This simply hasn't worked. out. R&D for Xbox 360 is clearly not being remunerated, and EA finds itself in the awkward position of having to support the most expensive development platform ever created in the PlayStation 3, a machine for which it is no doubt rushing software out in time for launch.
Shares have fallen away from the firm, with investors and analysts again illustrating a short-termist attitude to the games industry and yet again displaying their refusal and/or inability to respect and understand the impact of the hardware lifecycle on third-party publishers.
The 26c loss would be money in the bank for anyone willing to take a punt with an eye to selling up on the run up to Christmas 2007.
Companies:
Electronic Arts
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Comments
crs117 2 Aug 2006 15:42
1/3
This means quite a few things for all next gen consoles. It is quite obvious that cost for game development is going up substantially with each new gen of hardware.
Also, this is a sign showing that consumers are not as willing to shell out +$10 for next gen games. Personally I am waiting for a price drop on quite a few 360 games before i buy them. I check the store almost every week waiting for NFS to drop to a more reasonable price, especially since it has been out for 8 months now and is not moving too many units any more.
Next up, if EA is hurting because of the limited amount of x360 hardware I cannot begin to imagine how much they are going to be hurting on ps3 sales. If you thought the x360 was very limited in release, just wait and watch sony fuddle the ps3 launch with very limited hardware.
Finally...this looks really good for nintendo. Cost of development is cheaper (comparable to game cube), development time is shorter since developers are already familure with the tools, which means faster turn around time, price for Wii games will most likely be the same as last gen prices (good for consumers), and finally i dont think we will see nearly the shortage of consoles that we saw of the 360 or will see of the ps3. Even if there are shortages, yeilds for the consoles parts should be quite high so new shipments should be frequent with high counts.
Also, this is a sign showing that consumers are not as willing to shell out +$10 for next gen games. Personally I am waiting for a price drop on quite a few 360 games before i buy them. I check the store almost every week waiting for NFS to drop to a more reasonable price, especially since it has been out for 8 months now and is not moving too many units any more.
Next up, if EA is hurting because of the limited amount of x360 hardware I cannot begin to imagine how much they are going to be hurting on ps3 sales. If you thought the x360 was very limited in release, just wait and watch sony fuddle the ps3 launch with very limited hardware.
Finally...this looks really good for nintendo. Cost of development is cheaper (comparable to game cube), development time is shorter since developers are already familure with the tools, which means faster turn around time, price for Wii games will most likely be the same as last gen prices (good for consumers), and finally i dont think we will see nearly the shortage of consoles that we saw of the 360 or will see of the ps3. Even if there are shortages, yeilds for the consoles parts should be quite high so new shipments should be frequent with high counts.
Ditto 2 Aug 2006 21:09
2/3
crs117 wrote:
Cost of development is cheaper (comparable to game cube), development time is shorter since developers are already familure with the tools
I would expect development to be longer and more expensive than Gamecube.
While developers will be familiar will the development systems, they have to spend money thinking up ways to use the controller with their game, novel interfaces etc.
Development time will probably increase slightly and design time will increase a lot. Also, consumers will be expecting innovative games for the Wii, meaning there will be a pressure on developers to push more money into design and R&D.
realvictory 2 Aug 2006 23:36
3/3
Yeah, but still cheaper than the cost of the X360 and PS3. In PS3 and X360 games they have to develop new things that you don't even notice when you play the games, like crowd simulations and photorealisic humans. That is the extra $10.
Games consoles, nor anything, should be hard to find at launch purely due to lack of production. Being skeptical, I would say it's on purpose, yet there can't be that much demand, realistically, in the first place.
I can't wait until the PS3 comes and the games industry falls apart. It deserves it for being money-oriented rather than fun-oriented.
Games consoles, nor anything, should be hard to find at launch purely due to lack of production. Being skeptical, I would say it's on purpose, yet there can't be that much demand, realistically, in the first place.
I can't wait until the PS3 comes and the games industry falls apart. It deserves it for being money-oriented rather than fun-oriented.