Riccitiello "Still a Real" Chance for a Major Games Retailer to Fail
EA chief estimates this might cost 20,000 units due to stupid customers
John S. Riccitiello Chief Executive Officer, Electronic Arts, has caught himself half way through admitting that a major video games retailer doesn't survive. He makes it very plain, too plain in fact, that he is not talking about the GAME Group.
During the recent EA investor call, the EA CEO was asked, "A UK retailer in distress, the $2.5 billion revenue retailer with 400 stores across sort of Europe, you guys have 18% worldwide market share. Obviously if that issue doesn't get resolved, significant revenue loss potentially. So how do we think about that? Does that – if they don't sell or they liquidate, does that go somewhere else? What happens to that, let's say, the longer term effect?"
This was following an original question, "Going back to the issue with Game Group out of the UK, so that's a..." which the EA man interrupted to state, "I didn't mention Game Group, by the way."
He does, however, lay out the following, "I'm really confident that the consumer that wants to buy Mass Effect or Madden or FIFA or whatever, if a particular retailer is gone, other retailers will absorb the business. There can be – and I talked more about this on the last quarterly call and highlighted a debt issue of mid-single digit EPS, if they don't survive and – or a major retailer doesn't survive. And that's still a real – now it's unfortunately more true than it was even a month ago, or more likely than it was even a month ago.
But I think in the fullness of time, I am extremely confident that, whether it's UK or France, or United States, etcetera, the retail marketplace will absorb that business. I don't think we're going to – we might lose 20,000 copies of Mass Effect 3 in the UK for the consumer that can't figure out another store to go to, but that would even surprise me. I mean I think we'll sell every unit. So, we love great retailer partners, and we, like I mentioned GameStop earlier and Best Buy and Amazon and others. They're great for us. If one goes away, the other guys pick up the slack. I really don't see it as anything other than a very temporary dislocation. Did I get to what you're after?"
Well, did he?
Source: EA
During the recent EA investor call, the EA CEO was asked, "A UK retailer in distress, the $2.5 billion revenue retailer with 400 stores across sort of Europe, you guys have 18% worldwide market share. Obviously if that issue doesn't get resolved, significant revenue loss potentially. So how do we think about that? Does that – if they don't sell or they liquidate, does that go somewhere else? What happens to that, let's say, the longer term effect?"
This was following an original question, "Going back to the issue with Game Group out of the UK, so that's a..." which the EA man interrupted to state, "I didn't mention Game Group, by the way."
He does, however, lay out the following, "I'm really confident that the consumer that wants to buy Mass Effect or Madden or FIFA or whatever, if a particular retailer is gone, other retailers will absorb the business. There can be – and I talked more about this on the last quarterly call and highlighted a debt issue of mid-single digit EPS, if they don't survive and – or a major retailer doesn't survive. And that's still a real – now it's unfortunately more true than it was even a month ago, or more likely than it was even a month ago.
But I think in the fullness of time, I am extremely confident that, whether it's UK or France, or United States, etcetera, the retail marketplace will absorb that business. I don't think we're going to – we might lose 20,000 copies of Mass Effect 3 in the UK for the consumer that can't figure out another store to go to, but that would even surprise me. I mean I think we'll sell every unit. So, we love great retailer partners, and we, like I mentioned GameStop earlier and Best Buy and Amazon and others. They're great for us. If one goes away, the other guys pick up the slack. I really don't see it as anything other than a very temporary dislocation. Did I get to what you're after?"
Well, did he?
Source: EA
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