EA crumbles under its own sheer weight (MS related)

EA owns dozens of studios, makes games every year, and they all sell millions upon millions.

Yet every year they post a loss.

I think that despite their success in sales, the overall costs of paying their studios employees salaries, maintaining the studio property, the massive advertising money needed to promote almost every game, and other expenses that come with owning multiple studios, the financial burden is greater then their titles retail success.

That is why MS is downsizing (now down to Lionhead, Rare, Turn 10, and Mistwalker). Less property and salries to pay. Instead they cut a checque and buy out 360/PC exclusivity, timed exclusivity or DLC exclusivity......for a fraction of the cost fo doing it in-house.

I for one think its a great long-term stragety. They are financially stable and buy out deals for a fraction of developing it with a 1st party studio.

It is a good strategy in the short run, but say if devs decide they do not want to go X360 exclusive in terms of consoles in the future then MS will be in crap.Espada12

If MS keeps launching at least one year ahead of Sony, then their stragety is sound.

Microsoft has nothing to do with EA's problems

Yeah, I remember reading that EA is gonna do some cost cutting too. But since they aren't a console manufacturer the same strategy wouldn't really work for them.

It's incredible that with cash cows like Madden they're still loosing money. But maybe that's just cause they've made some heavy investments, once profits from heavy hitters like Sims3 are in the books and investments like Bioware start putting out games like ME2 and Kotor MMO I'd expect them to turn profit. If not, then they're screwed.

Microsoft has nothing to do with EA's problems

ExtremeOne316

Your right.. The smaller companies have more drive, more reward to get the job done more effeciently. The thing is MS is still giving serious support to them while maintaing high standards.

EA owns dozens of studios, makes games every year, and they all sell millions upon millions.

Yet every year they post a loss.

I think that despite their success in sales, the overall costs of paying their studios employees salaries, maintaining the studio property, the massive advertising money needed to promote almost every game, and other expenses that come with owning multiple studios, the financial burden is greater then their titles retail success.

That is why MS is downsizing (now down to Lionhead, Rare, Turn 10, and Mistwalker). Less property and salries to pay. Instead they cut a checque and buy out 360/PC exclusivity, timed exclusivity or DLC exclusivity......for a fraction of the cost fo doing it in-house.

I for one think its a great long-term stragety. They are financially stable and buy out deals for a fraction of developing it with a 1st party studio.

-General_Ram-

EA continues to follow a failed market share strategy.... this is a the problem. Your the biggest studio, and you produce alot of games.. you have some big hitters like madden and other sports games that produce huge profits, on the other hand, your pour tons of money into hit or miss projects that result in low sales volumes. If you would have canned 6 of these games, put half the money into producing 1 really good game, you would have production costs, cut marketing and have the chance of a much bigger hit. EA is just fighting themselves at this point.

Yeah, I remember reading that EA is gonna do some cost cutting too. But since they aren't a console manufacturer the same strategy wouldn't really work for them.

It's incredible that with cash cows like Madden they're still loosing money. But maybe that's just cause they've made some heavy investments, once profits from heavy hitters like Sims3 are in the books and investments like Bioware start putting out games like ME2 and Kotor MMO I'd expect them to turn profit. If not, then they're screwed.

mr_mozilla

Microsoft has nothing to do with EA's problems

ExtremeOne316

Did you even read the post? He explains quite clearly what he means. :?

That is why MS is downsizing (now down to Lionhead, Rare, Turn 10, and Mistwalker).

-General_Ram-

You're slightly confused on this part

Microsoft owns Lionhead (fable) , Rare (banjo), Turn 10 (forza), two smaller XBLA studios, and Wingnut (hasn't made a game yet, working on halo chronicles w/ peter jackson and ryan payton)

They are 2nd party with Feel Plus (programmed Lost Odyssey, working on N3:2), Mistwalker (LO, Blue Dragon, working on Cry On), and Bungie (halo). This is essentially what Sony is to Insomiac and Naughty Dog, not direct ownership but partial and moreso contracts and $ binding the two.