Tuesday, July 31, 2012

Lower Earnings, And Worse

Some vid-game companies aren't exactly in high clover:

Electronic Arts, publisher of the "Battlefield" and "Star Wars" games, reported lower net income than a year ago while its rival Take-Two Interactive Software posted a net loss due to weak sales of a key new video game. ...

For the three months ended June 30, EA posted overall revenue of $491 million, compared with $524 million a year ago. Net income dropped to $201 million, or 63 cents per share, compared with $221 million, or 66 cents per share a year ago. ...

Publishers are struggling to sustain revenue growth as gamers migrate steadily to casual and social games online or on mobile devices. On Tuesday, EA announced it would offer a free-to-play option of its "Star Wars: The Old Republic" game, hoping to staunch gamer losses. ...

[Take Two] reported a net loss of $110.8 million, or $1.30 a share

Like every other entertainment/media company, gaming businesses aren't selling as many of the little silver disks as before. Players are clambering onto internet platforms where many things are free! Free!! FREE!!

The new business model: Get the teenaged eyeballs to look at your product; find a way to monetize your product, even if that means ads and links and other lower revenue things.

What's the mantra? Adapt or perish.

Add On: But maybe EA is catching on to the "adapt" thing.

... Electronic Arts on Tuesday announced that it will offer up substantial portions of its "Star Wars: The Old Republic" multi-player online game to players for free starting this fall. A premium version with unlimited access to all levels, plus any new content, will still be available for $14.99 a month.

The move by the Redwood City, Calif., game publisher is an acknowledgment that the current economic climate makes it virtually impossible for a subscription business model to thrive on the Web, where thousands of free games now compete aggressively for attention. ...


Mike said...

Yeah, I've got a comment.
Is it REALLY all that bad to be making ONLY $491 MILLION dollars????

I'd settle for that.

Steve Hulett said...

Welll ... not bad, exactly. But EA is changing its business model, so it appears that they are not thrilled with the amount.

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