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EA to monopolize sports? Analyst says it might

Posted Feb 16, 2007 at 10:02PM EST by QJ Staff

Listed in: PS3, Xbox 360, PC Gaming Tags: Baseball, EA Sports, Michael Pachter, Monopoly, playstation 3 updates, Ryan Brant

Can EA Sports gain sole dominion of the video game sports arena in the next generation of consoles? With the right money, it just might, says Wedbush Morgan Securities analyst Michael Pachter, remarking that the stock status of Take-Two interactive has gone from "hold" to "sell."

He says, "We think that Take-TwoÂ’s flagship franchise, Grand Theft Auto, will continue to generate significant profits but are less optimistic about the profit potential from its sports business and from 'everything else."

And though GTA IV's October breakout is a sure-fire splash, Pachter says that the sports division creates less-than-significant profit. He cites the reason - the fact that the division is lacking and spending is astronomical.

The woes are compounded by the company's corporate drama which involved the resignation of such stalwarts like Rockstar Games co-founder Terry Donovan, Take-Two founder Ryan Brant, and board member Barbara Kazcynski, who left some scathing remarks to the management team in her resignation letter. Michael Pachter further mentioned that:

We think that Take-Two's greatest asset is also its greatest liability...The company has an environment conducive to creativity and reaps tremendous benefits from allowing its creative staff to work on what it thinks will work...It has also resulted in the inclusion of sexual content (hot coffee) in the companyÂ’s flagship brand, the decision to enter the sports business and compete with an 800-pound gorilla named EA, the decision to green light a slew of movie properties with consistently poor results, and several other decisions with poor outcomes.

Pachter said that the equation boils down to the fact that "It is clear to us that Take-TwoÂ’s sports business would have tremendous value to EA, as it would give EA a monopoly on football, basketball, baseball, and hockey...It is arguable that EA would benefit by as much as billion if it were to obtain an exclusive; this does not mean that it is willing to pay billion."

It's not hard to figure out that very few competitors, if any at all, would be willing to wage a war of attrition against EA Sports in this age, and Pachter says 2K Sports can go to EA for roughly a quarter of a billion dollars and sleep sound at night knowing that its biggest rival is dead and buried. Neither EA or Take-Two has given statements on the matter so far.

Via GameSpot

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I though EA already had the monopoly. Their only serious competition is 2K sports, and they only release hockey and basketball titles, sometimes football (not NFL) and baseball titles.

Everything else is covered by EA, and sometimes in multiples (how many soccer and football variations can one have??)

Anyways, it is sad really, but hey, I only care about hockey and at least EA did something different with that, although they messed a whole lot up as well (horrible AI)

# Sony and EA — Guest 2007-02-17 07:47

EA will never rule all of sports videogames that will never happen why? too much typing to answer, anyway the only franchise they have a hold on is football and 2k football is going to own madden on release, EA had 2 years to convince gamers they can make a superior football game and madden 2007 still is not better than NFL 2K5, real pathetic if you ask me, and michael pachter don't know anything about videogames or the industry because he is not a game publisher or a gamer, he is just a ANALyst, Sony and EA are too companies that I believe should not exist in the videogame industry because they do nothing for gamers they just look out for their wallets, EA games are the perfect example to backup my statements, I know you got to put food on the table but come on you can put food on the table and make quality games at the same time, many companies have done that, and sony is a hardware company all they care about is selling playstations they could care less about quality games, Sony never did anything for the industry or gamers, it is the game publishers and gamers that are making money for sony, the gaming industry would have done just fine on sega, nintendo and PC platforms if playstation did not exist, microsoft don't care about gamers either but at least they are contributing to gaming and making gaming better how? xbox live nuff said, notice how sony still does not have a good online service, "hint", do you think it is because they don't have the money, please, it is because they just don't care about gamers and the only reason they are now doing something about online is because they see the potential for more money, SEGA and Nintendo are the only videogame companies that ever cared about gamers.

# I hope not — Guest 2007-02-17 16:12

And if they do I hope people will see this company for what it is, and realize it doesn't care at all about its customers.

I wish people would just stop buying EA games and let the damn company implode, the game industry would be much better off. But taking into account the intelligence of the average football/basketball fan, that obviously won't happen.

# wow — Guest 2007-02-17 17:17

that is the longest run-on sentence in the history of the world

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