Analyst: EA Betting Big On Online For Long-Term Growth

Electronic Arts views traditional retail business models as "somewhat outmoded," especially with the current console cycle's high prices, and is looking to online models as the industry's "single largest long-term growth driver."

That assessment of the company's position comes from Lazard Capital Markets analyst Colin Sebastian, who recently visited EA to get a bead on the publisher's current strategy and the state of its business.

"Interactive entertainment has absorbed consumer market share from passive forms of media over the past decade - notably television, cinema, and music - and EA now sees the traditional video game model under pressure from users increasingly engaged with online applications," Sebastian says. "In particular, EA views the social networking platforms (e.g., Facebook) as a large growth opportunity, with relatively low barriers to entry, high margins, and attractive viral marketing characteristics."

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