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Analysis: Do big investments in innovation hurt publishers?

Leigh Alexander from Gamasutra writes:

"Is the path to profitability truly "more of the same?" Alongside the economic downturn, it's become more and more common for publishers to report big losses -- even when revenues are up.

Electronic Arts is one such company, and after its holiday portfolio fell short of expectations, CEO John Riccitiello is now admitting that the company needs to get its operating costs way, way down.

THQ's story is strikingly similar to EA's -- the company invested heavily in diversifying its product line and in making meaningful improvements to its quality scores, and like EA, it achieved both goals. CEO Brian Farrell sounded similar to Riccitiello when, on the company's results call to investors, he cited the improvements in THQ's Metacritic scores."

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