Electronic Arts feeling the pressure of long console cycles – Video Games Update
Electronic Arts (EA) has been suffering lately in the stock market as its share price has fallen from $22 to $11.59 in the last six months. If the trend continues EA might face a hostile takeover or worse as they might not be listed on the stock exchange
anymore.
Recently Square Enix complained about Microsoft’s and Sony’s decision to push back the next generation consoles and called it the “biggest mistake” they have ever made. The reason behind this is that publishers like Square Enix and Electronic Arts probably
had their line of next generation Intellectual Properties (IPs) ready but the delay in next generation consoles means that they will have to wait longer before they can announce and release them.
The delay of next generation consoles has lead to liquidity issues for many publishers as they have spent a lot of cash in developing games. However, they are currently unable to get returns on their investment since there is no platform to release the games
on. Going PC exclusive would not be a wise choice financially due to the rampart p****y on that platform.
Square Enix, Crytek, Epic Games and Dice all have their next generation game development engines ready but can’t fully utilise them because of the current generation consoles hardware limitations.
Longer console cycles may mean additional revenue for console manufacturers but it spells doom for publishers. This is likely to result in the publishers shifting to other cheaper platforms. This is one of the reasons behind the sudden increase in Mobile
gaming. Developers find making indie games for cell phones and tablets much easier than dealing with the absurd requirements and the insane amount of development costs required to create a console game.
Famous video game analyst, Michael Pachter, stated that he had a chat with EA’s CEO John Riccitiello and claims that he is concerned about his job security. It seems that he should be as the second largest publishing giant has taken a large hit in the stock
market in the last six months.
After EA’s Electronic Entertainment Expo (E3) conference, where they showed around 10 games, the publisher revealed in an interview that they had four to five next generation IPs ready to be revealed but couldn’t as Sony and Microsoft chose not to announce
the new consoles this year.
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