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EA to monopolize sports? Analyst says it might |
Listed in: PS3, Xbox 360, PC Gaming Tags: Baseball, EA Sports, Michael Pachter, Monopoly, playstation 3 updates, Ryan Brant
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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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Comments
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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)
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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.
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