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Janco: EA To Announce Major Cost Reductions, IP Acquisitions

Ahead of Electronic Arts' fiscal 2008 Q1 results expected on August 1st, Mike Hickey of analyst group Janco Partners has predicted that Q2 will see the publisher execute a "quantifiable cost reduction plan," as well as look more strongly at acquiring IP rather than producing it internally, with Take Two noted as a recommended target.

Q1 Performance

Hickey expects the publisher will report Q1 results in line with its guidance and continue to maintain its fiscal 08 goals, with strong performance of Harry Potter, Command and Conquer 3, and titles from its Sims franchise.

"While we believe their operating prospects look exceptional deeper into the current console cycle, they have suffered in the near term from poor product quality, escalating operating costs, and a misaligned resource allocation focus," said Hickey, adding that fiscal '09 might change that with a lineup of potential big earners including Spore, Sims 3, Rock Band 2, Warhammer Online and a slate of casual content for Wii, DS and online. The titles are in addition to perennial hits like Madden.

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gamasutra.com
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the_round_peg3560d ago

Whatever EA touches either turns into crap or get destroyed.

Apocalypse Shadow3560d ago (Edited 3560d ago )

if EA buys take-two,then it's downhill from there.look what happened to criterion.EA bought criterion to get black(damage technology),burnout(started to surpass N4S series) and renderware(almost every dev house used it).

and now they are starting that downhill spiral.now black is nowhere to be found,burnout looks weak and no one uses renderware anymore.now devs have to use the buggy but great looking unreal engine 3.

i don't fully hate EA.but their size is ruining the industry.they either buy you,out advertise you with bucket loads of cash,out license you or put you out of the market or business.

sounds like walmart.

Lacarious3560d ago

i wonder what their thoughts are on the NFL license $$$$.... here's to APF cutting deep into madden's pockets this year.

FCOLitsjustagame3560d ago

If EA buys Take 2 then it doesnt matter. The more APF cuts into EA's profit the more likely they are to buy Take 2 I would think. Since it seems their way of dealing with competition is to make it "go away". Maybe they can put Tim Donaghy on thier next NBA cover.

SuperSaiyan43560d ago

And none of that seems to be have spent on making quality games, people just buy the games because of the name of the game but it might look pretty on the surface but until you get into it then you see how rubbish it can be.

Also people buy EA games out of desperation because there arent enough games out, people like me and the NFS series - Most Wanted was poor and Carbon was even WORSE!

So if EA cut costs then I guess its Xbox 1 and PS2 quality games on the 360 and PS3 then.

anh_duong3560d ago

nothing new but ubisoft anyone? a studio with lots of ips and current history with ea ubisoft seems like a good candididate.