sonycowboy
Member
http://biz.yahoo.com/rb/050715/media_electronicarts_stocks.html?.v=1
All this for the Godfather? Clearly there are high expectations for sales for this game, beyond what I thought it might do. Also spooked Wall Street as they believe it's a sign that next gen development may not be on track for the 360 launch (overall, not specific titles) such that 360 SW sales could be hurt.
All this for the Godfather? Clearly there are high expectations for sales for this game, beyond what I thought it might do. Also spooked Wall Street as they believe it's a sign that next gen development may not be on track for the 360 launch (overall, not specific titles) such that 360 SW sales could be hurt.
EA stock down on The Godfather release
Friday July 15, 1:53 pm ET
SAN FRANCISCO (Reuters) - Electronic Arts Inc. (NasdaqNM:ERTS - News) shares fell as much as 5.5 percent on Friday, a day after the No. 1 video game maker said it was delaying release of "The Godfather" game until after the key Christmas holiday.
EA shares rebounded from a session low of $56.98 to $58 (now back down to ~57.70) in afternoon trading on the Nasdaq, as some analysts forecast the impact of the game's tardy delivery may be relatively muted, pushing revenue into the following quarter ending March.
"Whenever a game is delayed out of the holidays invariably some sales are 'lost' -- never to be recouped," Harris Nesbitt analyst Edward Williams said in a research note.
If nothing else changes in EA's release schedule, he said "The Godfather" delay could cost it as much as $100 million in lost revenue.
A lack of heavy-hitting titles during this year's holiday season could also help soften the blow to EA, some analysts said.
Silicon Valley-based EA, which is seen by Wall Street analysts as posting revenue of $1.8 billion in the December quarter, pegged the postponed release of the marquee title to additional work required to perfect the game's interactive elements.
Several analysts said on Friday they would wait to make any adjustments to their fiscal 2006 targets until later this month, when the company reports results of its first-quarter ending June.
Without giving specifics, EA also said "The Godfather" versions for next-generation consoles would follow at a later date. That news prompted concern there could be fewer than expected big titles to accompany the release of Microsoft Corp.'s (NasdaqNM:MSFT - News) new Xbox 360 game console, which is set for shipping in time for the holidays.
In the past, game makers invested heavily in titles for new consoles from companies, such as Microsoft and Sony Corp. (Tokyo:6758.T - News), only to see revenues fall because the new game players were first embraced by hard-core gamers, who make up a relatively small portion of the overall market.
Some analysts believe that, this time around, game companies will continue to invest in current-generation game titles that have larger audiences, while making smaller bets on games for next-generation consoles.