Holiday Sales Down Double Digits Says EA

http://news.zdnet.com/2100-1040_22-6003223.html?tag=zdfd.newsfeed

In a conference call with reporters and analysts, EA chief financial officer Warren Jenson said the Foster City, Calif. company won’t meet prior sales and earnings guidance for the current, third fiscal quarter, which ends Dec. 30. The game giant also expects to come up short on expectations for its fourth fiscal quarter and for all of fiscal 2006, which ends in March.

“It now appears (that the) overall market will be down double digits,” Jenson said. “The demand curve has shifted abruptly.”

Jenson explained that while initial sales of Microsoft’s next-generation console, the Xbox 360, were strong in North America and Europe, EA now doesn’t think sales of the console or games made for it will be as high as expected.

–Dave

Dear EA:

Make better games.

Love,
extarbags

My thinking on all this is that the price point is wrong for last gen titles. $50 is stupid for a new game on PS2.

$36 is a much more acceptable price.

$60 is insulting price gouging for 360 games. They need to be down at the $50 mark.

Expect to see across the board price drops.

Dear extarbags:

Did you ask for more sequels and bigger licenses?

We’re on it!

-EA

It’s worse than that. I’ve accepted that much. The one EA game I was looking forward to this year was a sequel, Freedom Fighters 2, and it’s been either delayed indefinitely or outright cancelled. So at this point, it’s not even “more sequels,” but “more roster updates.” I think we’re going to see EA move to two Maddens a year pretty soon.

Challenge Everything.

Er, isnt this the first holiday season EA games are priced higher thasn others? their psp games are all 50 for example. Wasnt madden more than $50 now that its the only game in town?

It would be interesting to see how EA sales have changed in comparison to other companies. Being a collector type, I almost never take back games. I’ve returned or traded three of the last five EA games I bought (which is huge considering how few I buy under my WoW addiction), and now never buy EA games unless my friends recommend them and I have a chance to try them out. I also don’t even bother with Madden Roster Update '0x until the next year. The hip-hop vibe of many of their games is also a turn-off, but I recognize that’s because I’m old, and I will look past it for a good game. Too bad they don’t seem to make many of those.

Oh yah, the solution to have what’s probably a bit over a 10% dip in sales is to drop the price by 28%, with an even larger effect on actual profit margin. I’m sure EA will be hiring you as a business consulatant any moment now. $50 for a AAA title is cheaper entertainment/hour than movies or good booze, and is entirely reasonable.

EA’s sales are down because their games are getting dull and the economy sucks. They also might be making up the comments about the “overall market” being down to look better to their shareholders. WoW is probably cutting into their profits too.

Every time we change generations, sales have this hard decline. I don’t think its as bad as the 1994 slump but its worse than the last one in 2000.

is pc gaming domed or just console?

It’s actually not just EA this time, though, it’s a market-wide drop. As much as I’d like to say it’s because all they’re making are crappy rehashes and roster updates, it’s really only partially to blame here. This happens when you move from current to next-gen, especially if there’s a system shortage and the launch titles aren’t very inspiring, with delays for some of the most anticipated ones announced right before launch… yeah, it’s not pretty.

But goddammit EA, you want people to start believing in you again it’s time for a change in business plan alright. And not one that involves BIGGER and more of the same ONLY XTREME AND IN YOUR FACE. Come on, how fucking stupid an assertion is that?

I don’t work for EA, but another behemoth. Let me tell you, sales on most titles are HALF expectations (not counting 360 stuff which has exceeded expectations).

We’ve done some market research and it really does seem that people are holding on to their cash to buy 360s and associated games. I blame magazine editors for this. :wink:

Last week Target had 4 360 titles marked down to $49.95. Those four titles were sold out. I guess $10 does make a difference.

Supertanker mentioned WoW, I wonder how many of the 5million purported subscribers are buying games now? I know when I played EQ and WOW, I bought zero games. Before I found out WoW’s subscriber numbers I would have laughed at this idea, but 5 million is a large chunk of people, even counting those with multiple accounts.

Lets not get in to the fact that they also price their PSP games at 50 which is also kinda dumb and has stopped me from buying them.

Dear Andy Warhol,

Put 'em on the glass.

-Flowers

Two fiscal quarters until they mine the Bible for IP. Not as bad as Sony’s Everquest/Norrath stuff, but yeah. Save me, Trip Hawkins!

Not two Maddens, but one Madden, one NFL Street (what happened to that this year?), and one Arena Football.

Obviously this dip was caused by gamestop no longer accepting used PC game sales.

Actually, there’s plenty of situations in which dropping a price can result in more income. Which is why stores ever do things like ‘sales’.

Toronto’s theatres are a great example. Mid 2004 they dropped ticket prices from $15 to $10. All of a sudden, theatres were PACKED. Absolutely insanely packed. So much so that in order to get decent seats for just about any movie during the first week, you had to show up 45 minutes in advance at least.

I’ve gone shopping at what would usually be considered “peak” times: the weekend before Chrismas, shopping malls in Boston during lunch, etc. The only time I’ve ever seen a line was in Borders. Even the Apple store in Cambridge didn’t have a line, neither did the Best Buy there.

I can’t speak for online, but I’ve gone to enough stores–during times that have previosly been busy–and walked right up to a counter with my purchase for me to say retail sales–at least in Boston–are definetly down.