EA Comments on Future Console Price Cuts
This is a just bunch of stuff we already know. But, if you do want to read it, be my guest.
EA sees price cuts this year, new consoles coming
LOS ANGELES, March 4 (Reuters) - Video game publisher Electronic Arts Inc. expects a new generation of video game consoles to come in 2005 or 2006 and is already talking to console makers about their plans, the company’s chief financial officer said on Tuesday.
In a presentation at a Bear Stearns investment conference in Florida, monitored via Webcast, Warren Jenson also said that EA, like many other game publishers, expects Sony Corp., Microsoft Corp. and Nintendo Co. Ltd. to cut $50 each off the price of their consoles this year.
Such cuts, which many expect to come in May around the industry’s Electronic Entertainment Expo in Los Angeles, would take Sony’s PlayStation 2 and Microsoft’s Xbox to $149 and Nintendo’s GameCube to $99.
Today we’re already in discussion with Sony, with Microsoft, with Nintendo on the next generation of consoles," Jenson said. “When do we think the transition would occur? Sometime around 2005, 2006 – that’s really Sony’s call to make.
Sony, which dominates the field, was ahead of Microsoft and Nintendo by a year in the current cycle, releasing the PS2 in late 2000.
Jenson also addressed the poor performance to date of what had been expected to be the company’s flagship online game, “The Sims Online.” The game came out in early December, building on the “Sims” franchise that has dominated PC gaming of late, but EA has conceded the title has underperformed.
“Our focus is not right now on marketing and selling units, our focus is on – shame on us for not doing this in the first place – getting the content right in the game,” Jenson said. The game’s performance affected the profitability targets of EA.com, which the company said Tuesday it will consolidate into its core operations.
EA, which has more than $1 billion in cash and a shelf registration allowing it to offer $2 billion in debt and securities, has been rumored as a potential buyer of both Japan’s Sega Corp. and the video games business of French conglomerate Vivendi Universal. V.N .
But EA has denied any interest in acquiring either and Jenson reiterated the company’s strategy of being interested only in developers with wholly owned intellectual property.
“We hope never to use the shelf,” he said of the company’s debt and securities registration.
Source: http://www.reuters.com
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