Analyst: EA may jeopardize core franchises if spread too thin

EA’s plan in the last few years has been to bring out fewer but higher quality titles and invest in new intellectual properties. A strategy that appears to be working but one that Deutsche Bank analyst Jeetil Patel feels may fail if the publisher stretches its properties across too many platforms.

Patel raises the question, “..could $10-$20 in immediate operating profits on a per-console software unit basis to hardcore/mass market gamers be compromised by $1-$5 in operating profits over one year from a casual gamer looking to play Need for Speed?”

“We believe that EA is clearly risking its franchises to potentially lower monetization ahead by taking its core franchises to too many media/platforms/devices (which carry lower economics) as opposed to only exploiting its newer/weaker IP for such an environment.”

A few examples of this would be its FIFA, Tiger Woods and Battlefield franchises, all of which now have browser-based versions.

EA itself expects its digital businesses to grow “approximately 30%,” as noted by CFO Eric Brown in yesterday’s earnings announcement.

YOU MIGHT ALSO LIKE: