Electronic Arts (ERTS) December 2009 Q3 Warning
Press Release
-Q3 29-33c (56c est), revenue $1.33-1.35B (1.42B est)
-FY2010 40-55c (79c est), revenue $4.125-4.2B (4.26B est)
Conference call
-Europe especially weak. -15% y/y vs. flat expectation
-forecasting flat to negative high single digits for overall industry packaged goods this year
Q&A
-fabulous title plan this year including Medal of Honor, Need for Speed, Sims for console, Fifa in a World Cup year, Dead Space 2, new Crysis game, MMA game
-distribution business will be sharply down this year
-major MMO launch (obviously Bioware Star Wars) for Spring 2011. Won’t include it in FY2011 guidance to be conservative
-CY2009 digital business had 25-30% growth. In Christmas quarter 25%
-very confident in Mass Effect 2 and Battlefield Bad Company 2 titles
-Pogo has 75% gross margin
-seeing strength in mobile, console DLC (Dragon Age)
-pricing didn’t play a role in December quarter. Retail competition for market-share drove volumes
-Europe had $90 million short-fall vs. their expectations
Net-net
-Bad December quarter was expected by any half-decent fundamental videogame analyst. Look at my prescient tweet (Link)
-March quarter title pipeline is strong. Pulling previous year sports game support for online multiplayer should drive demand for current year Madden
Bioware is best developer of RPG i think I have played dragon age and its very very cool, so if bioware will make star wars it will be best RPG game ever made by bioware
I agree. Star Wars MMO has a good shot of being successful with Bioware behind it.