EA's fumbling misjudgement of Wii

May 27th, 2007, 22:39 Posted By: Triv1um

Electronic Arts has been caught off-guard by the success of Nintendo's Wii, and analysts and investors share their thoughts on the company's future.

Via Aussie Nintendo

Two years ago, Nintendo was being written-off left, right and centre, while stocks in the world's leading game-maker, Electronic Arts, soared to record highs, as sales neared the US$3 billion mark for the first time.

Nowadays, both analysts and investors are pondering the future of the company as it enters the next generation, and according to Todd Greenwald, a financial analyst with Nollenberger Capital Partners, "This transition does seem to be a bit more painful for EA." However he added, "EA is the 800-pound gorilla. They're always going to be dominant."

Much of the publisher's success in the past has come due to its support of Sony and its PlayStation 2, however, and given the fact that the PlayStation 3 isn't living up to expectations paints a grim picture for EA. "It has huge implications," said one unnamed analyst. "Nintendo will return to its historical position as the No. 1 hardware and software vendor and will leave everyone else fighting for second place."

EA spokesman Jeff Brown said EA is ramping up its support of both Wii and DS, though, with 10 to 13 games being prepared for Nintendo's new console this financial year. He also highlighted that last month, EA had the second-best-selling games on Wii, having been topped only by Nintendo itself.

Brown added that EA's management team is currently "discussing organizational changes," details of which could come as early as this week. "No other company in the industry has as many sails up as EA," he said. "When the wind starts filling those sails, you're going to see us move."

Billy Pidgeon, an analyst at IDC, said of the new rising of Nintendo: "This does even the playing field a little bit. Other (game makers) are geared toward the Nintendo platforms. We didn't anticipate the popularity of the Wii, but we moved very quickly to get into position on that."

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