Madden 09 Dominates US Sales in August

[GTheorenHobbes]

Quote: Originally Posted by rudyjuly2

But that report doesn't say why they lost money. You can't assume Madden lost them money. It could have been for a bunch of other projects while Madden kept them from losing more. Who knows?

Think about it, Rudy. Madden used to sell 5 million copies before they had the exclusive. According to the numbers you posted (I haven't verified), they paid $300 million for the exclusive. Their development costs haven't decreased...if anything, they've increased on next gen. And they're not really making any more sales...they've pretty much stayed flat since they've gotten the exclusive. So, they're paying a bunch more money now (development costs PLUS the exclusive license fees) than they used to, and they're not really bringing that much more in. Maybe I'm missing something, but I don't see how Madden could NOT be a big cause of their falling profits these last couple of years. To me it seems like a matter of simple math. Again, maybe I'm missing something.

[NYyankz225]

There are a lot of reasons for EAs net loss. I can list a few off the top of my head.

Merger of Activision/Blizzard

Lower than expected sales of HD consoles (Primarily the flop of the PS3)

Underestimated success of the Wii



They've been scrambling to reallocate their development studios and it's taken a toll on them. Madden has been the least of their worries. I like when people assume things without any knowledge on the subject.

[GTheorenHobbes]

Quote: Originally Posted by NYyankz225

There are a lot of reasons for EAs net loss. I can list a few off the top of my head. Merger of Activision/Blizzard Lower than expected sales of HD consoles (Primarily the flop of the PS3) Underestimated success of the Wii They've been scrambling to reallocate their development studios and it's taken a toll on them. Madden has been the least of their worries. I like when people assume things without any knowledge on the subject.

My post relied upon simple math (additional costs due to exorbitant exclusive license fee paid plus stagnant sales of Madden). How would lower than expected sales of next gen consoles or the underestimated success of the Wii result in reduced profits for EA?

I like when people refuse to admit the obvious.

[GamingJones]

A 2% growth when consumer spending is way down is a plus for EA.

Their losses this year have been tied to quite a few acquisitions, not the hardcore fans displeasure with Madden.

[GTheorenHobbes]

Quote: Originally Posted by MaxAbbitt

A 2% growth when consumer spending is way down is a plus for EA. Their losses this year have been tied to quite a few acquisitions, not the hardcore fans displeasure with Madden.

I'd bet a bag of donuts that NHL, FIFA and probably even Live will have greater than 2% increases in sales numbers this year. Make a great game, even in a poor economy, and the numbers will be there.

[NYyankz225]

Quote: Originally Posted by GTheorenHobbes

How would lower than expected sales of next gen consoles or the underestimated success of the Wii result in reduced profits for EA?

It does when you put all your eggs in the "next gen basket" and totally disregard the Wii. You've got a finite amount of resources ($, labor, time, etc). Every dollar you spend on next gen console development is a dollar you could have spent on Wii development (aka opportunity costs). Companies like Ubisoft played their cards right and had moderate hits on the Wii when it released. EA had to scramble AFTER the fact to get up to speed on Wii development and reorganize their development studios (including the creation of an entirely new Wii only studio). These things cost money, especially when you need it done expeditiously. But these decisions obviously aren't able be changed at the drop of a hat. Game budgets and timelines are made over months and often years, so it takes AT LEAST a year to turn the ship around (or at least add another ship that's going the Wii's way ). EA got caught napping and now they've paid the price in lost profits.

Madden with the NFL is the only sure shot they've got YOY. They'd be idiotic to let it go.

[GTheorenHobbes]

Quote: Originally Posted by NYyankz225

It does when you put all your eggs in the "next gen basket" and totally disregard the Wii. You've got a finite amount of resources ($, labor, time, etc). Every dollar you spend on next gen console development is money you could have spent on Wii development. Companies like Ubisoft played their cards right and had moderate hits on the Wii when it released. EA had to scramble AFTER the fact to get up to speed on Wii development and reorganize their development studios (including the creation of an entirely new Wii only studio). These things cost money, especially when you need it done expeditiously. But these decisions obviously aren't able be changed at the drop of a hat. Game budgets and timelines are made over months and often years, so it takes AT LEAST a year to turn the ship around (or at least add another ship that's going the Wii's way ). EA got caught napping and now they've paid the price in lost profits. Madden with the NFL is the only sure shot they've got YOY. They'd be idiotic to let it go.

I don't disagree with anything you're saying here. But you're talking about profits (from the Wii) that EA never had. You can't lose profits from Wii sales that weren't there to begin with. I'm just saying that, if EA is paying $60 million a year more now to make Madden (using Rudy's numbers), and sales are relatively flat from where they were 4 years ago, it would seem that some part of that $95 million loss is due to the exclusive. Again, maybe I'm wrong.

[MikeRo72]

EA hasn't gotten $1 from me in 3 years and counting. Not until they completely rebuild the Madden engine. It's trash, they simply get their sales off of brand name alone and that will only last so long.