EA could monopolize gaming?

With the Take 2 aquisition seeming inevitable EA which is already the biggest third party developer will become the third party developer. It wasn't that long ago that EA bought Bioware doesn't anyone find it a bit odd? We know this is a part of business practice for big companies to buy up smaller companies, but I think there is more to this than that. There must be a plan for EA to this.

Having the money to buy up all the companies doesn't matter if the amount of money your spending will take years maybe decades to recoupe before you can make a profit. So thats whats so strange about EA's actions its going to take years before they can make a profit on all the aquisitions maybe decades so why keep buying up more companies when they haven't broke even on the ones they already own?

There was a rumor awhile back that EA was planning on releasing a console. When I heard that rumor I thought it was plausible. EA sports titles like Madden, NBA live, Need For Speed, and Fifa could move consoles alone. I haven't looked into the companies that EA has bought in the past but with the aquisition of Bioware and soon to be Take 2 which would probably be the biggest of them all with with rights to GTA, 2k sports, Bioshock. Does anyone see where I'm going with this? It isn't a coincedance that EA is buying up so many companies it seems they are trying more than to enter the console business, but to completely control it. With all the publishing rights they currently have and soon will have EA could put out a console where those games can only be found.

Personlly I would buy a EA console just for EA sports titles alone, but with all the other franchises they own and soon to own it would make a EA console very attractive purchase for everyone. If EA were to make those games exclusive it could knock out Sony and Microsoft out of the console business. If it were to happen Sony and Microsoft would have to rely on more first party games where Sony isn't too bad in that department and where Microsoft is lacking a great deal in. Nintendo will be the only company not affected by EA because their biggest franchises and selling point are first party games. Sony and Microsoft better pray that Ubisoft, Activision, Konami, and Capcom don't fall prey to EA's plan.

If EA were to put out a console I would buy it because I'm a gamer I go where the games are I've had an Atari(not sure which one),NES,SNES,Sega,PS1,PS2,GC,Xbox,360,and PS3 so where ever the games are I'm there. So what do you guys think?

I don't think they' ever make a console. think of how much they make developing for everything right now. I think they're just buying so much up to minimize competition and maximize profits. They may lose money now on all the things they are buying but in the long run they'll make much more.Zero5000X

actually they had to reverse engineer consoles in the past visit their headquarters they might enter the race that would be awesome.thesheet

I fail to see how an EA monopoly would be awesome...

My hatred for ea grows with the news of eaach aquisition. I have defended them for years, especially the madden franchise, but if they buy take-two that's it! I have this picture in my head of what ea is like and reality and it goes like this...

Two EA employees (CEO and...President) enter a conference room

employe 1: hey anything good n' new lately?

employee 2: no we made 3 new crap games, but people still buy 'em soooo....

employee1: you're right our profits are going through the roof! I'm bored, wanna buy someone out?

employee 2: I'm already on the phone, bwahahahahahahahaha (puts pinky finger near mouth)

My hatred for ea grows with the news of eaach aquisition. I have defended them for years, especially the madden franchise, but if they buy take-two that's it! I have this picture in my head of what ea is like and reality and it goes like this...

Two EA employees (CEO and...President) enter a conference room

employe 1: hey anything good n' new lately?

employee 2: no we made 3 new crap games, but people still buy 'em soooo....

employee1: you're right our profits are going through the roof! I'm bored, wanna buy someone out?

employee 2: I'm already on the phone, bwahahahahahahahaha (puts pinky finger near mouth)

El-Visitante

I understood you at first then you completely lost me:?

[QUOTE="El-Visitante"]

My hatred for ea grows with the news of eaach aquisition. I have defended them for years, especially the madden franchise, but if they buy take-two that's it! I have this picture in my head of what ea is like and reality and it goes like this...

Two EA employees (CEO and...President) enter a conference room

employe 1: hey anything good n' new lately?

employee 2: no we made 3 new crap games, but people still buy 'em soooo....

employee1: you're right our profits are going through the roof! I'm bored, wanna buy someone out?

employee 2: I'm already on the phone, bwahahahahahahahaha (puts pinky finger near mouth)

deebo_x

I understood you at first then you completely lost me:?

Seems easy enough to understand to me.

Ok? but serious as gamers it really shouldn't matter just go where the games are it really is that simple

Not a chance in heck.

The big money in this business is in software, not hardware. And the capital investment in developing and bringing new hardware to the market is huge with very significant risk.

EA has the potential right now to sell all of its games on all hardware, or mix and match where it makes sense. 100% install base potential.

Launching their own hardware and then chopping off large segments of its potential install base would be insane. They gain absolutely nothing, since they can already potentially access 100% of install base. Trading off high margin software sales on install base for crap margin on hardware with huge investment risk is ridiculous.

They are not planning a console. Any sane business person can see that.

What they are doing is rounding out their product mix through diversification. They were primarily a sports game company...that was their core. They are adding companies that are strong in other genres to round out their product offering.

This is a product diversification strategy designed to grow at reasonable risk because all of their eggs are not in one basket (genre). As the popularity of different types of games ebbs and flows they will be positioned to respond appropriately.

Think about in terms of our collective gaming wallets. Only some % of our total spending is on sports. Another % on RPGs. Another % on shooters. Etc. You can only sell so many sports games. Their can only be so many sports games available at once before your own products start competing with each other.

The solution? Branch out into other genres. Get more money from different types of games.

Now you know EA's acquisition strategy. Can I have a cookie?

Having the money to buy up all the companies doesn't matter if the amount of money your spending will take years maybe decades to recoupe before you can make a profit. So thats whats so strange about EA's actions its going to take years before they can make a profit on all the aquisitions maybe decades so why keep buying up more companies when they haven't broke even on the ones they already own?

deebo_x

You're wrong in this. Purchasing studios is profitable right now.

Money must be working some way or another, or it will lose it's value (thank inflation fo this). Basically, the value of money is dependent on time. Having large amounts of cash is financially suboptimal unless you think you might require a large amount of liquidity in a very short term. The way of making money work is through investing.

When investing, you have a large amount of options, from low-return, low-risk endeavors (with a bank), to high-return-high risk endeavors, and everything in between. The return can either be completely monetary (i.e. only interest or appreciation), or mixed with other benefits (i.e., the possibility of stock appreciation plus technology/patent use when purchasing a company). The benefits are quite quick, maybe even immediate.

You're assuming that EA needs to get enough profit to cover the "expense" of purchasing T2, but this is not the case: It would be if we were talking about a depreciable asset (like a car), but stocks don't work like that (unless you mismanage them, but that's another matter). EA won't actually lose their expense, just transform it into a less-liquid asset. For example: EA purchases T2 for $100 (for simplicity's sake), and the stock appreciates during the next month in, say, 10% (too high, but again, for simplicity). EA can then sell T2 for $110 in a month, gaining a $10 profit.

So EA doesn't need to "break even", it just needs the companies to continue performing.

EA believes that their best investment right now is T2, something I wouldn't doubt, since it will make them insanely powerful in the sports game genre.

That's the financial aspect. SUD123456's post is also quite good a reference :D

What they are doing is rounding out their product mix through diversification. They were primarily a sports game company...that was their core. They are adding companies that are strong in other genres to round out their product offering.

SUD123456

Most of your post is quite interesting (and the console part is dead on, especially after seeing Trip Hawkins' 3DO debacle), but this paragraph is adding noise to my perception of the takeover. So, I've got a quick question for you: EA's takeover will give it an absolute monopoly in the sports genre, which if my calculations are correct, isn't too far from a billion dollars in yearly revenue, and I wouldn't be surprised if it's more. Considering this, and that the takeover would also reduce EA's costs, isn't the takeover's objective essentially that of monopolization?

After all, EA has massive publishing abilities, and getting expertise in new genres would be easier (And cheaper!) through the purchase of independent studios, instead of getting T2 that, along with it's internal and subsdiary studios, comes saddled with a bunch of divisions that might become redundant?

My hatred for ea grows with the news of eaach aquisition. I have defended them for years, especially the madden franchise, but if they buy take-two that's it! I have this picture in my head of what ea is like and reality and it goes like this...

Two EA employees (CEO and...President) enter a conference room

employe 1: hey anything good n' new lately?

employee 2: no we made 3 new crap games, but people still buy 'em soooo....

employee1: you're right our profits are going through the roof! I'm bored, wanna buy someone out?

employee 2: I'm already on the phone, bwahahahahahahahaha (puts pinky finger near mouth)

El-Visitante

lulzors. :lol:

they now crap about hardware. there hardware would be worse than microsofts.lol it be 80% failure rate.

plus the only thing i can see happening is ea just make 360 games because with peter moore there scares the crap out of me. they will dump down ps 3 games just to make the 360 look better.

they now crap about hardware. there hardware would be worse than microsofts.lol it be 80% failure rate.

plus the only thing i can see happening is ea just make 360 games because with peter moore there scares the crap out of me. they will dump down ps 3 games just to make the 360 look better.

GARRYTH

i think the ps3's architecture and hardware bottlenecks do that ;)

[QUOTE="GARRYTH"]

they now crap about hardware. there hardware would be worse than microsofts.lol it be 80% failure rate.

plus the only thing i can see happening is ea just make 360 games because with peter moore there scares the crap out of me. they will dump down ps 3 games just to make the 360 look better.

3picuri3

i think the ps3's architecture and hardware bottlenecks do that ;)

[QUOTE="deebo_x"]

Having the money to buy up all the companies doesn't matter if the amount of money your spending will take years maybe decades to recoupe before you can make a profit. So thats whats so strange about EA's actions its going to take years before they can make a profit on all the aquisitions maybe decades so why keep buying up more companies when they haven't broke even on the ones they already own?

Grive

You're wrong in this. Purchasing studios is profitable right now.

Money must be working some way or another, or it will lose it's value (thank inflation fo this). Basically, the value of money is dependent on time. Having large amounts of cash is financially suboptimal unless you think you might require a large amount of liquidity in a very short term. The way of making money work is through investing.

When investing, you have a large amount of options, from low-return, low-risk endeavors (with a bank), to high-return-high risk endeavors, and everything in between. The return can either be completely monetary (i.e. only interest or appreciation), or mixed with other benefits (i.e., the possibility of stock appreciation plus technology/patent use when purchasing a company). The benefits are quite quick, maybe even immediate.

You're assuming that EA needs to get enough profit to cover the "expense" of purchasing T2, but this is not the case: It would be if we were talking about a depreciable asset (like a car), but stocks don't work like that (unless you mismanage them, but that's another matter). EA won't actually lose their expense, just transform it into a less-liquid asset. For example: EA purchases T2 for $100 (for simplicity's sake), and the stock appreciates during the next month in, say, 10% (too high, but again, for simplicity). EA can then sell T2 for $110 in a month, gaining a $10 profit.

So EA doesn't need to "break even", it just needs the companies to continue performing.

EA believes that their best investment right now is T2, something I wouldn't doubt, since it will make them insanely powerful in the sports game genre.

That's the financial aspect. SUD123456's post is also quite good a reference :D

I didn't say that EA had to make a profit right away, but to continue spending billions on dollars in buying one after another software company doesn't make any sense if you haven't even broke even on the ones you originally bought. It makes sense if EA was trying to increase that companies worth then sell it for more than what they paid for it in order to make a profit, but name one company that EA has aquired then sold?

If increasing the companies worth then selling it later was their plan then why hasn't Sony or Microsoft been just as aggressive and bought as many software companies as well. Sony and Microsoft have more money than EA so why are they not as aggressive? Plus if buying up software companies just in order to sell them later was the plan then why would EA limit their aquisitions to software companies why not other companies that have nothing to do with games? You think its a coincedance that EA is buying up so many software companies at an alarming rate and don't see that if they continue this practice they will own so much of the software market.

People buy consoles for the games. A console is nothing without the games and anyone can put out a console and people will buy it as long as it has the games. Why doesn't it make sense that EA wouldn't release a console in the next 4 years, but companies like Sony and Especially Microsoft have done so with much less experience in the gaming business? It makes absolute sense that EA would release a console especially at the rate their going they could have most of the big money making franchises and developers under their control.

Let EA make a console, I will sit back and laugh. :D I have no great attachment to GTA, can live without Bioshock 2 and Mass Effect 2, and will gladly wave farewell to all of those annoying sports games. I doubt they'll do it though, because they make a lot of money on the current consoles as is. Also, Activision Blizzard is larger than EA. Activision was already larger than EA before the merger anyway. (Not sure if that was before or after the purchase of BioWare though.)EndlessGame

Look it up EA is the biggest and most profitable software third party developer in the world Activision doesn't even touch EA in net worth and this is before the Bioware aquisition and maybe the T2 one.

Are you loyal to one brand of gaming consoles? If so do you own any kind of xbox? Did you start gaming in 2001? If you've been gaming before 2001 or have more than one brand of console then your not loyal to any company. If anyone has owned an atari, nes,sne, ps1,n64,sega, or dreamcast and now owns a xbox or 360 then why would you care if EA released a console? If EA puts out a console with games that interest you why not buy it? People bought the xbox when Microsoft had no experience in the gaming business. People bought the PS1 when Sony had no experience in the gaming business. If EA puts out a console they would be in a much better position than Microsoft or Sony were in when they released their first consoles.

Why does it make more sense that Sony and even Microsoft can enter the console business and be successful, but not EA? When EA has been making games for over 25 years?

Monopolies are not legal. Electronic Arts would be in court if they gain too much power.

Furthermore, EA could never compete with Nintendo's innovation, Microsoft's online, or Sony's Blu-ray, etc.

I'll bet you that in a year or two Microsoft will buyout EA. :lol:SaintBlaze

Microsoft is evil.

[QUOTE="SaintBlaze"]I'll bet you that in a year or two Microsoft will buyout EA. :lol:Hoobinator

Microsoft is evil.

Prove it. :P

[QUOTE="SUD123456"]

What they are doing is rounding out their product mix through diversification. They were primarily a sports game company...that was their core. They are adding companies that are strong in other genres to round out their product offering.

Grive

Most of your post is quite interesting (and the console part is dead on, especially after seeing Trip Hawkins' 3DO debacle), but this paragraph is adding noise to my perception of the takeover. So, I've got a quick question for you: EA's takeover will give it an absolute monopoly in the sports genre, which if my calculations are correct, isn't too far from a billion dollars in yearly revenue, and I wouldn't be surprised if it's more. Considering this, and that the takeover would also reduce EA's costs, isn't the takeover's objective essentially that of monopolization?

After all, EA has massive publishing abilities, and getting expertise in new genres would be easier (And cheaper!) through the purchase of independent studios, instead of getting T2 that, along with it's internal and subsdiary studios, comes saddled with a bunch of divisions that might become redundant?

Well we don't know for certain. It all depends on which parts of T2 that EA is really interested in.

All companies can be valuated in theory through some form of 'objective' discounted cashflow analysis...yada...yada. But what someone is actually willing to pay is also dependent upon other variables which includes strategic fit.

IMO 2K Sports is not worth as much to EA as it might be to others. That's because they are already strong in sports. You can argue that this would give them a virtual monopoly in sports, but how sustainable is that? And when you have huge market share in any one individual genre, then how can you grow further? There can only be so many sports games. And if you already own a large part and then pay full price plus a premium to acquire more sports franchises then how do you recover that premium and grow further?

My answer is you sell the 2K Sports piece.

I don't think they want to acquire T2 for more sports IPs at all. I think they want GTA and Bioshock and all the other non-sports games and they just happen to have to buy 2K sports at the same time....meaning the first thing they will do is keep the best sports franchises and unbundle/spinoff/sell the other duplicate ones.

They will expect to pay the premium largely for GTA, Bioshock et al. And they'll expect to recover the portion of total purchase cost for 2K Sports plus part of the premium by bundling a sports package to someone else willing to pay more for those properties. Someone other than EA will value those sports franchises more than EA because they won't have their own.

Anyway, it just MO...if I was buying T2 I'd break them up and keep the parts that roundout my product portfolio and find a buyer for the duplicate sports franchises. But that is just me...perhaps they are crazy enough to think they can hold a monopoly in sports for any length of time...I doubt it.

I didn't say that EA had to make a profit right away, but to continue spending billions on dollars in buying one after another software company doesn't make any sense if you haven't even broke even on the ones you originally bought. It makes sense if EA was trying to increase that companies worth then sell it for more than what they paid for it in order to make a profit, but name one company that EA has aquired then sold?

If increasing the companies worth then selling it later was their plan then why hasn't Sony or Microsoft been just as aggressive and bought as many software companies as well. Sony and Microsoft have more money than EA so why are they not as aggressive? Plus if buying up software companies just in order to sell them later was the plan then why would EA limit their aquisitions to software companies why not other companies that have nothing to do with games? You think its a coincedance that EA is buying up so many software companies at an alarming rate and don't see that if they continue this practice they will own so much of the software market.

People buy consoles for the games. A console is nothing without the games and anyone can put out a console and people will buy it as long as it has the games. Why doesn't it make sense that EA wouldn't release a console in the next 4 years, but companies like Sony and Especially Microsoft have done so with much less experience in the gaming business? It makes absolute sense that EA would release a console especially at the rate their going they could have most of the big money making franchises and developers under their control.

deebo_x

Part by part:

1.- I don't think you understood my point. I didn't say EA is trying to buy and sell companies for profit. I said that there's no need to "break even". Buying another company isn't an expense, it's an investment. There's a basic difference between both, and I think you're mixing them up.

2.- As SUD stated, there's no real point. EA putting another console in the market doesn't make sense: Doing so will not make the overall install base of all consoles increase substantially no matter how well it does. So, the market for their main product (software) will not increase, and they will have spent a lot of money.

This is even assuming it does very well - and it's very probable it won't. History is full of failed consoles, and EA will make money no matter the brand of the console in your home. Nintendo, Sony and Microsoft had clear reasons for entering the hardware market, EA doesn't have any good incentive.

Well we don't know for certain. It all depends on which parts of T2 that EA is really interested in.

All companies can be valuated in theory through some form of 'objective' discounted cashflow analysis...yada...yada. But what someone is actually willing to pay is also dependent upon other variables which includes strategic fit.

IMO 2K Sports is not worth as much to EA as it might be to others. That's because they are already strong in sports. You can argue that this would give them a virtual monopoly in sports, but how sustainable is that? And when you have huge market share in any one individual genre, then how can you grow further? There can only be so many sports games. And if you already own a large part and then pay full price plus a premium to acquire more sports franchises then how do you recover that premium and grow further?

My answer is you sell the 2K Sports piece.

I don't think they want to acquire T2 for more sports IPs at all. I think they want GTA and Bioshock and all the other non-sports games and they just happen to have to buy 2K sports at the same time....meaning the first thing they will do is keep the best sports franchises and unbundle/spinoff/sell the other duplicate ones.

They will expect to pay the premium largely for GTA, Bioshock et al. And they'll expect to recover the portion of total purchase cost for 2K Sports plus part of the premium by bundling a sports package to someone else willing to pay more for those properties. Someone other than EA will value those sports franchises more than EA because they won't have their own.

Anyway, it just MO...if I was buying T2 I'd break them up and keep the parts that roundout my product portfolio and find a buyer for the duplicate sports franchises. But that is just me...perhaps they are crazy enough to think they can hold a monopoly in sports for any length of time...I doubt it.

SUD123456

Good point. Still, I don't believe that EA will sell off 2K sports. Merge them into their own studios, yeah. Fire or reaccomodate some redundant people (I'm sure they don't need twice the guys making jersey textures...), sure. But selling them off? Don't think it'd be smart.

I'm not saying EA believes this will give them a sports game monopoly from here to the ends of time, but it will hinder competition a lot. You can't just up and make a madden 2009-killer from scratch in less than a year, especially if you can't use madden or, well, the NFL. Selling off 2K Sports would basically give someone else an instant foothold in an insanely lucrative market segment of which EA will be the leader by a vast margin, which doesn't sound very well.

Monopolies are not legal. Electronic Arts would be in court if they gain too much power.

Furthermore, EA could never compete with Nintendo's innovation, Microsoft's online, or Sony's Blu-ray, etc.

PandaBear86

Its all about the games and if EA buys T2 then they will have it. Microsoft's and Sony's consoles rely greatly on third party games so if EA enters the race those two companies wiill be at a big disadvantage. I see it like this if EA puts out a console next generation I think it will be a gradual process for them. Slowly they will start with big titles making them either exclusive or time exclusive until their console gets momentum and then if their console is successful then full exclusivety to all their software properties.

Far as EA competing with the other companies, EA wouldn't be competing with Nintendo only Nintendo can compete with Nintendo because of all the first party games. Microsoft online isn't anything to compete with all EA has to do is copy it. Sony's blu-ray could very well be a big factor in the Playstations staying power, but if EA is allowed to produce a console using blu-ray then that advantage also goes out the window.

I'll bet you that in a year or two Microsoft will buyout EA. :lol:SaintBlaze

It would probably cost in the upwards of 20-30 billion dollars for them to do it so I don't think Microsoft will payout that kind of cash.

[QUOTE="SaintBlaze"]I'll bet you that in a year or two Microsoft will buyout EA. :lol:deebo_x

It would probably cost in the upwards of 20-30 billion dollars for them to do it so I don't think Microsoft will payout that kind of cash.

You don't need to spend cash for that. Still, I don't think Microsoft would try to do so - 30 billion dollars would be considerably better kept pumping their other divisions.

[QUOTE="Grive"]
[QUOTE="SUD123456"]

What they are doing is rounding out their product mix through diversification. They were primarily a sports game company...that was their core. They are adding companies that are strong in other genres to round out their product offering.

SUD123456

Most of your post is quite interesting (and the console part is dead on, especially after seeing Trip Hawkins' 3DO debacle), but this paragraph is adding noise to my perception of the takeover. So, I've got a quick question for you: EA's takeover will give it an absolute monopoly in the sports genre, which if my calculations are correct, isn't too far from a billion dollars in yearly revenue, and I wouldn't be surprised if it's more. Considering this, and that the takeover would also reduce EA's costs, isn't the takeover's objective essentially that of monopolization?

After all, EA has massive publishing abilities, and getting expertise in new genres would be easier (And cheaper!) through the purchase of independent studios, instead of getting T2 that, along with it's internal and subsdiary studios, comes saddled with a bunch of divisions that might become redundant?

Well we don't know for certain. It all depends on which parts of T2 that EA is really interested in.

All companies can be valuated in theory through some form of 'objective' discounted cashflow analysis...yada...yada. But what someone is actually willing to pay is also dependent upon other variables which includes strategic fit.

IMO 2K Sports is not worth as much to EA as it might be to others. That's because they are already strong in sports. You can argue that this would give them a virtual monopoly in sports, but how sustainable is that? And when you have huge market share in any one individual genre, then how can you grow further? There can only be so many sports games. And if you already own a large part and then pay full price plus a premium to acquire more sports franchises then how do you recover that premium and grow further?

My answer is you sell the 2K Sports piece.

I don't think they want to acquire T2 for more sports IPs at all. I think they want GTA and Bioshock and all the other non-sports games and they just happen to have to buy 2K sports at the same time....meaning the first thing they will do is keep the best sports franchises and unbundle/spinoff/sell the other duplicate ones.

They will expect to pay the premium largely for GTA, Bioshock et al. And they'll expect to recover the portion of total purchase cost for 2K Sports plus part of the premium by bundling a sports package to someone else willing to pay more for those properties. Someone other than EA will value those sports franchises more than EA because they won't have their own.

Anyway, it just MO...if I was buying T2 I'd break them up and keep the parts that roundout my product portfolio and find a buyer for the duplicate sports franchises. But that is just me...perhaps they are crazy enough to think they can hold a monopoly in sports for any length of time...I doubt it.

EA could easily squash 2k sports all together boosting software sales of their EA sports titles. Or they could do like alot of car companies do and continue to produce sports titles under both, it wouldn't make a difference to EA they would still collect the profits.

Anti-trust laws FTW.Hoffgod

Well your right but what would be considered a monopoly in the console race? There is absolutely no way for anyone to knock Nintendo out of the console business due to strong first party software support, but what if EA controlled most of the third party support and caused Sony and Microsoft to exit the console business would that be considered a monopoly? It seems to me for something to be considered a monopoly its not a cut and dry subject.

Alot of people consider Microsoft windows to be a monopoly, but it isn't with strong competion from the mac os and linux os.

No way, they arn't even close to being able to have a monopoly. Activision Blizzard is to large for one. And Nintendo controls its platforms to the point in almost has a monopoly there.user_nat

One EA is already larger and more profitable than Activision by far before they bought Bioware and if EA buys up T2 then they will definetly be the third party developer not a third party developer. Plus who here thinks EA is going to stop at T2 they seem to want to controll all third party development it seems to be their goal. I agree noone can compete against Nintendo first party. I already said Nintendo seems to be the only company not affected by EA's aquisitions and will probably the only company not to be affected if EA released a game console.

[QUOTE="deebo_x"]

I didn't say that EA had to make a profit right away, but to continue spending billions on dollars in buying one after another software company doesn't make any sense if you haven't even broke even on the ones you originally bought. It makes sense if EA was trying to increase that companies worth then sell it for more than what they paid for it in order to make a profit, but name one company that EA has aquired then sold?

If increasing the companies worth then selling it later was their plan then why hasn't Sony or Microsoft been just as aggressive and bought as many software companies as well. Sony and Microsoft have more money than EA so why are they not as aggressive? Plus if buying up software companies just in order to sell them later was the plan then why would EA limit their aquisitions to software companies why not other companies that have nothing to do with games? You think its a coincedance that EA is buying up so many software companies at an alarming rate and don't see that if they continue this practice they will own so much of the software market.

People buy consoles for the games. A console is nothing without the games and anyone can put out a console and people will buy it as long as it has the games. Why doesn't it make sense that EA wouldn't release a console in the next 4 years, but companies like Sony and Especially Microsoft have done so with much less experience in the gaming business? It makes absolute sense that EA would release a console especially at the rate their going they could have most of the big money making franchises and developers under their control.

Grive

Part by part:

1.- I don't think you understood my point. I didn't say EA is trying to buy and sell companies for profit. I said that there's no need to "break even". Buying another company isn't an expense, it's an investment. There's a basic difference between both, and I think you're mixing them up.

2.- As SUD stated, there's no real point. EA putting another console in the market doesn't make sense: Doing so will not make the overall install base of all consoles increase substantially no matter how well it does. So, the market for their main product (software) will not increase, and they will have spent a lot of money.

This is even assuming it does very well - and it's very probable it won't. History is full of failed consoles, and EA will make money no matter the brand of the console in your home. Nintendo, Sony and Microsoft had clear reasons for entering the hardware market, EA doesn't have any good incentive.

EA has no clear incentive besides making games for three decades but Sony did with the ps1 and Microsoft with the xbox?

Yes thats the whole point of an investment to break even then start making a profit why else invest? The only other reason to invest and not necessarily make a profit is to control resources. Thats what software is to game consoles a resource. I don't think that EA is buying up all these software companies in order to make a quick profit, but to gain more control on the number things that drives consoles sales. EA doesn't need to make a profit on those software companies anytime soon, but controlling so much of it will help them enter the console business and make their console more attractive than any console out. By putting a console out this is how EA can see an immediate return on their software investments.

How does EA releasing a console make no sense, but Sony putting one out in 94 when Nintendo and Sega had one or Microsoft putting one out when Sony dominated the console market and Nintendo had been in the game since 85? EA has made games for 25 years and is the largest most profitable third party company in the world so if they released a console don't you think that it would probably be the most attractive console of them all? Sony and especially Microsoft rely on so much third party support and their biggest third party developer is EA.

Two of the 360's biggest games last year were Mass Effect and Bioshock. Mass Effect's properties are now owned by EA and if the T2 aquistion happens so would Bioshock's. I didn't even mention all the EA sports titles which could be exclusive or games Crysis, GTA franchise. How do you not see what I'm seeing. Games like these if they were to be made exclusive to an EA console it would severly decrease Sony's and Microsoft's console userbase.

With the games that EA publishes it definitely could carve a little niche into the console market. If EA were to come out with a console it would be a gradual process far as software goes. Some EA sports titles may become exclusive besides games like madden, but burnout could. Big titles like Mass Effect 4. Bioshock 4 , or Crysis 4 could be either exclusive or time exclusive. EA would still probably back the other three for awhile until its own console's user base increased and then cut them off completely.

Its all possible will it happen I don't know, but it is very possible.

Console gaming's days are numbered. EA wants one unified console. This will bring about a disastrous change in the world of gaming!

I will still buy some of their games though.:D

you guys do realize that an ea console would be no match for nintendo. so they couldnt really monopolize gaming. Ewok432

Thats why I made post saying monopolizing in certain aspects of the meaning not the total definition.

EA has no clear incentive besides making games for three decades but Sony did with the ps1 and Microsoft with the xbox?

Yes thats the whole point of an investment to break even then start making a profit why else invest? The only other reason to invest and not necessarily make a profit is to control resources. Thats what software is to game consoles a resource. I don't think that EA is buying up all these software companies in order to make a quick profit, but to gain more control on the number things that drives consoles sales. EA doesn't need to make a profit on those software companies anytime soon, but controlling so much of it will help them enter the console business and make their console more attractive than any console out. By putting a console out this is how EA can see an immediate return on their software investments.

How does EA releasing a console make no sense, but Sony putting one out in 94 when Nintendo and Sega had one or Microsoft putting one out when Sony dominated the console market and Nintendo had been in the game since 85? EA has made games for 25 years and is the largest most profitable third party company in the world so if they released a console don't you think that it would probably be the most attractive console of them all? Sony and especially Microsoft rely on so much third party support and their biggest third party developer is EA.

Two of the 360's biggest games last year were Mass Effect and Bioshock. Mass Effect's properties are now owned by EA and if the T2 aquistion happens so would Bioshock's. I didn't even mention all the EA sports titles which could be exclusive or games Crysis, GTA franchise. How do you not see what I'm seeing. Games like these if they were to be made exclusive to an EA console it would severly decrease Sony's and Microsoft's console userbase.

With the games that EA publishes it definitely could carve a little niche into the console market. If EA were to come out with a console it would be a gradual process far as software goes. Some EA sports titles may become exclusive besides games like madden, but burnout could. Big titles like Mass Effect 4. Bioshock 4 , or Crysis 4 could be either exclusive or time exclusive. EA would still probably back the other three for awhile until its own console's user base increased and then cut them off completely.

Its all possible will it happen I don't know, but it is very possible.

deebo_x

No, an investment does not need to break even, because it's original cost does not depreciate or vanish. That's the difference. Just trust me on this one. It doesn't work the way you think it does.

As for the console, it should be quite simple: Nintendo started back when the industry was fundamentally different, and haven't dropped out of the hardware race because their combination of hardware + software has succeeded based on decades of work and strategy. You can't just up and make a new nintendo from scratch no matter how much money you throw at it. The industry is fundamentally different now.

Sony entered, again, when the industry was fundamentally different: Nintendo was inmensely strong, and Sony's expertise was taken from Ninty themselves (the PS1 was originally an attachment to the SNES). This, along with the questionable practices nintendo had in dealing with developers, made a market ripe for a new competition that would be cheap, powerful, and allow developers freedom. That was the PS1. It started a revolution which fundamentally changed the industry.

Microsoft saw Sony as a huge competitor in a market they had indirect interest on. The Xbox was created not only for the ripe profits (4 billion in the hole isn't profit), but as a check to the Playstation brand, which could, in the long term, begin to affect their other interests, including but not limited to living-room entertainment and videogames.

Now, why is it not worth it for EA? It's simple: They profit from software sales - no matter what console. While it's true that their own console could increase their per-game revenue by up to 30%, it would also lead to considerably higher costs and considerably more work, along with a huge sunk investment and tremendous risk. Doesn't sound like a very good proposition.

[QUOTE="deebo_x"]

EA has no clear incentive besides making games for three decades but Sony did with the ps1 and Microsoft with the xbox?

Yes thats the whole point of an investment to break even then start making a profit why else invest? The only other reason to invest and not necessarily make a profit is to control resources. Thats what software is to game consoles a resource. I don't think that EA is buying up all these software companies in order to make a quick profit, but to gain more control on the number things that drives consoles sales. EA doesn't need to make a profit on those software companies anytime soon, but controlling so much of it will help them enter the console business and make their console more attractive than any console out. By putting a console out this is how EA can see an immediate return on their software investments.

How does EA releasing a console make no sense, but Sony putting one out in 94 when Nintendo and Sega had one or Microsoft putting one out when Sony dominated the console market and Nintendo had been in the game since 85? EA has made games for 25 years and is the largest most profitable third party company in the world so if they released a console don't you think that it would probably be the most attractive console of them all? Sony and especially Microsoft rely on so much third party support and their biggest third party developer is EA.

Two of the 360's biggest games last year were Mass Effect and Bioshock. Mass Effect's properties are now owned by EA and if the T2 aquistion happens so would Bioshock's. I didn't even mention all the EA sports titles which could be exclusive or games Crysis, GTA franchise. How do you not see what I'm seeing. Games like these if they were to be made exclusive to an EA console it would severly decrease Sony's and Microsoft's console userbase.

With the games that EA publishes it definitely could carve a little niche into the console market. If EA were to come out with a console it would be a gradual process far as software goes. Some EA sports titles may become exclusive besides games like madden, but burnout could. Big titles like Mass Effect 4. Bioshock 4 , or Crysis 4 could be either exclusive or time exclusive. EA would still probably back the other three for awhile until its own console's user base increased and then cut them off completely.

Its all possible will it happen I don't know, but it is very possible.

Grive

No, an investment does not need to break even, because it's original cost does not depreciate or vanish. That's the difference. Just trust me on this one. It doesn't work the way you think it does.

As for the console, it should be quite simple: Nintendo started back when the industry was fundamentally different, and haven't dropped out of the hardware race because their combination of hardware + software has succeeded based on decades of work and strategy. You can't just up and make a new nintendo from scratch no matter how much money you throw at it. The industry is fundamentally different now.

Sony entered, again, when the industry was fundamentally different: Nintendo was inmensely strong, and Sony's expertise was taken from Ninty themselves (the PS1 was originally an attachment to the SNES). This, along with the questionable practices nintendo had in dealing with developers, made a market ripe for a new competition that would be cheap, powerful, and allow developers freedom. That was the PS1. It started a revolution which fundamentally changed the industry.

Microsoft saw Sony as a huge competitor in a market they had indirect interest on. The Xbox was created not only for the ripe profits (4 billion in the hole isn't profit), but as a check to the Playstation brand, which could, in the long term, begin to affect their other interests, including but not limited to living-room entertainment and videogames.

Now, why is it not worth it for EA? It's simple: They profit from software sales - no matter what console. While it's true that their own console could increase their per-game revenue by up to 30%, it would also lead to considerably higher costs and considerably more work, along with a huge sunk investment and tremendous risk. Doesn't sound like a very good proposition.

So the reason that companies buy up other companies is not to increase profits? Ok But I already gave you another reason for EA buying up smaller companies is not for short term profit, but to control the number one resource for gaming consoles. Its either one or the other are they trying to make profits or control resources, and if to conrtrol resources to what end? Why limit aquisitions to just software companies they don't seem to have any interest in any other kind of company outside of gaming.

You casually go over points why Nintendo, Sony, and Microsoft have entered the console market, but you show no definitive reasons. Sony the second biggest electronics company in the world they have their hands in both the music and movie industry. Why does it make sense for Sony to invest in gaming? They make much more profits on the disc medias, they had no previous experience in the gaming software or hardware. Microsoft are you serious? How can you even try to make sense about their involvement in the console business. They are a software company that has nothing to do with gaming. I would be surpriesed if their gaming division even makes up 5% of their companies profits not revenue which is nothing without profit. They didn't produce games, games just run on their operating system. Plus have absolutely no hardware experience in anything at least Sony's main business was hardware.

How is it inconceivable to think that the biggest third party developer in the world might think hmmm. I control so many big money making software properties why not enter the console race myself. EA unlike Sony or Microsoft have been in gaming development for over 25 years. They have experience in gaming hardware because that is what they produce their games on. Yes EA makes alot of money on just developing software, but so does Microsoft that didn't keep them from entering the race. Sony didn't have investment in any gaming aspect that didn't keep them from investing on a console.

You are right about EA makes alot of money on software, by putting out a console and making all their games exclusive they could lose alot of profits. If EA was to put out a console their games would gradually become exclusive. The big title franchises will probably remain multiplat, but could easily be timed exclusive. Imagine Madden, Live, Need For Speed games like that being 4-6 months exclusive on an EA console, I don't know about you but 6 months is to long for me to wait on Madden. If EA aquires T2 imagine GTA being 6 months time exclusive. GTA time exclusivety on the ps2 hurt xbox sales. Brand new IPS will probably be exclusive to their console, and as their console became successful then full on exclusivety on all their titles would follow.

That is probably how it would go if EA were to enter the console race, it would be a slow and crushing competition process.

[QUOTE="deebo_x"]

EA has no clear incentive besides making games for three decades but Sony did with the ps1 and Microsoft with the xbox?

Yes thats the whole point of an investment to break even then start making a profit why else invest? The only other reason to invest and not necessarily make a profit is to control resources. Thats what software is to game consoles a resource. I don't think that EA is buying up all these software companies in order to make a quick profit, but to gain more control on the number things that drives consoles sales. EA doesn't need to make a profit on those software companies anytime soon, but controlling so much of it will help them enter the console business and make their console more attractive than any console out. By putting a console out this is how EA can see an immediate return on their software investments.

How does EA releasing a console make no sense, but Sony putting one out in 94 when Nintendo and Sega had one or Microsoft putting one out when Sony dominated the console market and Nintendo had been in the game since 85? EA has made games for 25 years and is the largest most profitable third party company in the world so if they released a console don't you think that it would probably be the most attractive console of them all? Sony and especially Microsoft rely on so much third party support and their biggest third party developer is EA.

Two of the 360's biggest games last year were Mass Effect and Bioshock. Mass Effect's properties are now owned by EA and if the T2 aquistion happens so would Bioshock's. I didn't even mention all the EA sports titles which could be exclusive or games Crysis, GTA franchise. How do you not see what I'm seeing. Games like these if they were to be made exclusive to an EA console it would severly decrease Sony's and Microsoft's console userbase.

With the games that EA publishes it definitely could carve a little niche into the console market. If EA were to come out with a console it would be a gradual process far as software goes. Some EA sports titles may become exclusive besides games like madden, but burnout could. Big titles like Mass Effect 4. Bioshock 4 , or Crysis 4 could be either exclusive or time exclusive. EA would still probably back the other three for awhile until its own console's user base increased and then cut them off completely.

Its all possible will it happen I don't know, but it is very possible.

Grive

No, an investment does not need to break even, because it's original cost does not depreciate or vanish. That's the difference. Just trust me on this one. It doesn't work the way you think it does.

What does the initial cost not depreciating have anything to do with what I'm talking about? If you spend 2 billion dollars on something your not making any profit until you recoupe 2 billion dollars. You can't start making a profit until that investment gains you 2 billion dollars. It really isn't that hard to understand. Why do you keep on insisting that the number one reason in investing in something is not to make profit? My fiance and I have invested over 75 thousand dollars in mutual funds and the whole point in us doing so was to increase on our initial investment.

There is another reason in investing in something. You don't always need to have the initial investment make a profit, but that investment to increase profits in other areas. For EA what would that be? How could spending billions of dollars on aquiring so many software companies increase profits else where by a considerable amount. A console is the only one that makes sense by controlling so many publishing rights EA could put out a console to be the console of all consoles. EA has been in the gaming business for along time neither you or I can imagine how much gaming knowledge they have accumulated over that time. So many console makers have tried and failed, but many were just barely in a position to crack the surface but EA could cause a typhoon if the wanted to.

It seems to me most of your post stems from fear than rationality. I'm not saying your not rational, but I can tell that you have some fear about this subject which every gamer should.

No competition means a loss for all of us as gamers. Its the exact same scenario as people wanting the PS3 or the 360 or the Wii to die. It would hurt all of us for something of this nature to take place. If one company takes over as the sole source of our gaming entertainment, then we are flat out screwed. They can force whatever garbage they want down our throats, and there wouldnt be much we could do about it. Competition is healthy, and this trend with EA is really starting to alarm me.JediRiff

You're right it could be disastrous for us gamers if EA was to force out Sony and Microsoft, but who can stop them? They own so many publishing rights already, the aquiring of T2 would be immensive and I doubt that EA will stop there, maybe Capcom or Konami, Square, Ubisoft even Activision. EA could go about trying to own them all.

Its funny EA has been doing this for years. Once in awhile I would hear EA bought up this and EA bought up that, but when I heard about T2 thats when it hit me what I think their trying to do, and it seems scary.