EA Downgraded By Citigroup

SAN FRANCISCO (MarketWatch) -- Electronic Arts Inc. was downgraded to a neutral rating by Citigroup, with its price target reduced from $19 to $14. In a note to clients, analyst Neil Doshi cited "limited catalysts" for the videogame publisher, despite noting that the stock is "near a trough multiple." EA shares have fallen more than 40% since the first of the year. Doshi wrote that the company's social gaming efforts "have had limited success thus far," and added the concern that active subscribers to its "Star Wars: The Old Republic" online multi-player game have fallen from 1.7 million to 1.3 million. "We think EA has a lot of potential, as it's the only publisher with meaningful participation across all platforms," Doshi wrote. "But for now, we're moving to the sidelines until EA can execute on these initiatives." Separately, EA announced that DreamWorks Studios has acquired the feature-film rights for its popular "Need for Speed" racing franchise. The studio is targeting a 2014 release for the film. EA shares were flat in early trades on Friday.

Doshi wrote that the company's social gaming efforts "have had limited success thus far," and added the concern that active subscribers to its "Star Wars: The Old Republic" online multi-player game have fallen from 1.7 million to 1.3 million.

He returned to EA as CEO in April of 2007.

Doing some research for GDC Taipei next week. Did you know that EA's total business activity since '03 has resulted in a $47m loss?

i.e. the last 4 years of losses more than cancels out the previous 5 years of profits?

Over the same time period, Activision has made approx (due to reporting changes) profit of $898k

On a personal note...aside from the constant hack-fests, spawn camping blah blah that are inherant to the game...I still think COD 4 (even just from a graphics point of view) was far superior to either BC2 or BF3...and almost 6 years old now and I would switch back to it right now...if it wasn't for all the other baggage that came with it.

Rumor – Peter Moore to replace John Riccitiello as EA CEO

Here’s a massive rumor for you: GameFront has been told by a source close to the matter EA CEO John Riccitiello will be replaced by EA Sports boss Peter Moore. The news is set to be announced after a July 30 earnings call.

Again, take this with a grain of salt for now, but if true, this is huge news.
The source stated that while Moore replacing Riccitiello was not set in stone, as the board has yet to vote on the matter, there’s a “general feeling of tension throughout EA’s studios,” due to the company’s falling stock prices. As of yesterday, stock in the company has hit a 52-week low yesterday.

Today, stock in the company is trading at $11.64 per share compared to $26.13 per share 52-weeks ago.
Riccitiello has been CEO of EA since 2007, after a a hiatus when he originally left his COO position at the firm in April 2004.
Since returning, Riccitiello has overseen the Origin platform and EA’s decision to focus on a digital direction, the later of which brought in over $1 billion in digital revenue during the firm’s 2011 calendar year.

Yesterday, there was a quote from analyst Michael Pachter floating around, in which he said during a lunch with Riccitiello, he expressed concerns over being “fired,” and was curious as to why the firm’s “stock had hit such a low point.”
Pachter clarified later that while this statement was true and he was “quoted accurately,” he was just “kiddng.”

Oskar Burman has resigned from EA a year after Ben Cousins left the same position

Easy Studios general manager Oskar Burman has decided to leave EA for a "new exciting shiny thing". This comes over a year after previous Easy Studios general manager Ben Cousins left the studio to establish a new Ngmoco studio in Stockholm, Sweden.

http://www.stumbleupon.com/su/2iSJOC/www.gamesindustry.biz/articles/2012-07-17-easy-studios-general-manager-departs-again

Electronic Arts stock is trading around a 52-week low, but Electronic Arts CEO John Riccitiello tells me that the fundamental problem is not with the company, but with investors understanding its business.

I sat down with Riccitiello for an exclusive interview at Fortune's Brainstorm Tech conference, where he said he's in the process of shifting EA from being about packaged goods to digital revenues.

The industry's focus on NPD's packaged game sales numbers is misguided, and overlooks the massive growth the company's seeing in digital revenue, Riccitiello said.

With a number of social and mobile gaming acquisitions in its arsenal, EA said it has found success on the Facebook social games platform, as well as Apple's games store. One key weapon in EA's arsenal is its scale — a quarter of a billion consumers move through its networks. It mines all that data of which games all those people play to drive them to other EA titles.

What about EA's exposure to Europe? Riccitiello said they're not seeing any softness translate to game sales: People may skip a vacation but they'll stay home and play video games.

One place we will see economic weakness have an impact is on M+A in the space. EA has made a slew of acquisitions over the past few years, but Riccitiello pointed out that while gaming stocks have come way down, the valuations of gaming startups are still sky high. But he said they don't need to make acquisitions to compete with Zynga, which is increasingly what he's focused on.

Pachter is referring to the reason EA's stock isn't lifting off. The elongated console cycle has created a rift where Pachter believes big publishers are stuck in a rut and suffering from sequalitis. I call that bull crap.

According to Pachter, Riccitiello honestly doesn't know why EA's stock price is dipping and his response to Pachter was that..."Yeah, but, in 2008, when we said it’ll be a three-year turnaround, I thought new consoles were coming out in 2010-2011". Pachter believes that sequelitis is what hurt games like Tony Hawk and Guitar Hero and that it's affecting EA's bottom line.

All right, enough talking about this like Pachter or Riccitiello have a clue about the gaming industry. Let's cover some facts first.

Fact: You don't need new consoles to make good games. The elongated console cycle wouldn't be so bad if big publishers made good games instead of trying to rely on rehashes, sequels and blockbuster wannabes. A good game is not determined by the amount of polygons a character model has or the amount of ambient light that shines through a virtual glass pane window.

Fact: Indie studios are churning out games that are making a killing while utilizing today's generation of hardware. Games like Fez, Braid, Limbo, MineCraft, Terraria, Team Fortress, DayZ, Portal, Q.U.B.E. and Amnesia: Dark Descent have all done well with little or no marketing. You don't need new consoles to make new, fun or innovative games. It all depends on how you use what you have.

Fact: A lot of the sequels that are bombing or underperforming on the market are retreads of games we've already played, including but not limited to Halo, Call of Duty, Gears of War, Need for Speed and Uncharted. "Me-too" rip-offs are exactly that, and the longer top publishers keep trying to milk the same ideas over and over again the more gamers will become less interested in the product. Unfortunately we've seen studios such as Black Rock, Codemaster's Red River studio, Radical Entertainment and other studios fold under similar circumstances.

This is not to mention things like Online Passes, the over-abundance of DLC and other shaky shenanigans of the sort, contribute to a lack of consumer confidence.

EA could easily redeem themselves by focusing on smaller but more innovative games; projects like the original Dead Space and Mirror's Edge marked a positive path for the company. Their partnership program for pushing out indie titles like Shank and Warp could prove to move the company into a better light with both consumers and investors.

However, running their reputation into the ground with over-bloated and obtuse marketing schemes while also trying to talk up their upcoming games as if they're the greatest thing ever (even though many are just retreads) it does nothing to boost consumer confidence, especially in the core community.